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New Built Price Negotiation

Hi All

I was hoping you could help me

I have recently reserved (on a fully refundable basis) a new build property with a list price of £227k. I have managed to obtain a number of free extras such as kitchen upgrade floor tiling, carpets, shower in main bathroom and additional wall tiling.

I am awaiting my mortgage company to perform a valuation on the property at present. I have been warned that the mortgage company tend to value new builds at lower than asking prices

My question is, as I have spent many an hour reading other posts on this forum - it appears a 'requirement' that a negotiation takes place on the purchase price of the house and that a norm discount of 5-10% can be expected.

Am I took late to start such negotiations? Also should I not hold fire until my mortgage valuation is performed? If this comes back as the list price then does this blow my chances of a reduced price out of the water?

It appears I have committed a few house buying sins by using the FA and solicitors recommended by the builder - will this affect my chances?

Many thanks for your help

JD

Comments

  • Anyone?

    Your help is appreciated
  • Ulfar
    Ulfar Posts: 1,309 Forumite
    Have you exchanged contracts yet, if not then it isn't too late.

    I would also be looking to at least change solicitors as there is a huge conflict of interest. See previous threads on this board for tales of woe.
  • vickyj
    vickyj Posts: 489 Forumite
    I have not paid list on either of the new bilds i have bought. I didnt think anyone did tbh. Here is my experience.
    New build number one. Purchased 2006 and is home at the mo. Ask price £199000 paid 184000. this was including some extras like turf loft ladders ect but not carpets. It was in a sought after development and was last one left.
    New build 2, due to move in to in November. list price 298900 paid 278000 including all carpets. I have part exed my home with them also. This is including carpets throughout and a couple of little bith thrown in. This is a massively sought after development and all of this house type sold out quickly. there are 3 homes left on development in total after 7 weeks of it being open.

    I hope that this can arm you somewhat in your negatioations. BTW this was a major national housebuilder. This information should arm you a little. Have you paid your reservation fee?
    HTH Vicky
    :D The glass is always half full, no exceptions !!:D
  • I just made an offer on a Redrow new build, the list price was 175k. I offered 150k & the best they could do was 8k gifted deposit & carpets & turf. I have walked away. Rubbish deal imho.
  • jdhughes57 wrote: »
    I have been warned that the mortgage company tend to value new builds at lower than asking prices
    Yes they do and with good reason: These new builds are not worth what the builders are asking for them.

    There's a premium (like new cars) on a new build which the mortgage company will never get back should they be forced to repo the house and sell it. Therefore they will correctly assess the house is worth only what they can sell it for "second hand", often this is less than what the builders insist it's "worth"

    The situation is worse on unfinished estates as you never know who is going to end up in the remaining houses. If they can't sell them privately, they get off-loaded as social housing and WHAM, the entire estate becomes a sinkhole of dole dossers and chavs. Your house ends up worthless.

    Right now, buyers are a rare commodity. You should be able to negotiate a very substantial discount on the asking price. As a buyer in this market, you are very much in the driving seat and you should use it fully to your advantage. The "extras", while nice, are often done cheaply and cost the builder next to nothing so don't be too swayed by their generosity.
  • vickyj
    vickyj Posts: 489 Forumite
    ooh carefull itmightbeusefull you will end up incurring the wrath af the equality crew with frank honesty like that :-)

    I do tend to agree to a distance. Some mega estates are very often used to ump up the social housing quota and this does without a doubt push down prices. There will me the whole crew who deny it buit it is so very true. But there are some estates still that dont have social housing on them due to being small estates these are defo the ones to aim for.

    Never pay list price on a new build !
    :D The glass is always half full, no exceptions !!:D
  • In practice the sales negotiators are not empowered to lower the price to the point where the purchase would be good value - they can only knock say £10k off and offer free stuff like cheap carpets and chipboard kitchens. The developers would rather not make the sale and have the place unsold, possibly because new builds are often bought by FTBs who don't know any better and there's a chance some mug will pay the asking price. If you are looking for a property at a good price, buy an older property. It will be better built too.
  • vickyj
    vickyj Posts: 489 Forumite
    Bristol Pilot this is simply untrue. the sales office are ale to do massive amounts on price if they go below a certain line they just make a phone call. These guys have often been doing the job for years and know thier onions well allthough there is a whole lot of bs to cut through first.
    :D The glass is always half full, no exceptions !!:D
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