New Builds: When do you complete & negotiate?

Sparx

Just curious, partner and myself are looking to purchase/mortgage a new build home from Redrow near the end of next summer 2014. We are going to reserve a plot possibly start of 2014.

When should we:

A.) Negotiate purchase price and extras? It is currently up for £165k but earlier last year it was £160k. We have also seen on Zoopla house prices they have sold a few for £155-160k. They have already told us if we put up a 10% deposit they will gift us 5% and pay stamp duty (1%) but we are still looking to try get things like carpets, flooring & turf in as well + anything else we can get out of them!

B.) Complete the mortgage? We will presumably need an AiP from our preferred mortgage company before we go in and reserve as otherwise they won't want to know or take us seriously. I know typically on a normal home purchase you complete a few weeks odd before moving in. But I've heard with new builds it's expected to complete the mortgage a few months before the house is ready to be moved into?

I'm sure I had a few other questions but I'll pop back when I remember! Any current advice on the above questions would really help.

Thank you

bclark

You don't have to complete early but they do expect you to exchange contracts within 4 weeks.

As for negotiation you can only try to get as much can, it really depends on how well they are selling.

Mobeer

Negotiate - before you pay out any money, otherwise you are in a difficult position if you want to play hard. A lower price would be better than negotiating extras, because you can then choose extras you actually want.

Complete mortgage - the builders will probably want you to talk to their own broker. You do not have to take that broker's help or advice, but the builders will want to hear from their own broker that they think you are in a position to get the mortgage needed.

In terms of arranging a mortgage, this can be done before you exchange contracts, which will (probably) be before the property is ready.

kingstreet

You're better off not using words like "complete" out of context as you're likely to get confused.

This is the process you'll go through;-

- agreement in principle (Feb/Mar 2014)
- reserve property (March 2014)
- full mortgage application (March 2014)
- mortgage offer and legal work done (April 2014)
- exchange contracts with completion "on notice" of build ending (April/May 2014)
- complete and move in. (Sep/Oct 2014)

Now, you need to be careful with the timing. This is why experienced newbuild advisers are sometimes more tuned-in to the process. If you apply for the mortgage too early, or you use a lender whose mortgage offers don't last long enough, you could leave yourself with an expired mortgage offer before completion occurs.

If you intend to complete the purchase and move in around September 2014, you need a product which allows completion upto the end of October 2014 or one where the offer is valid for six months, which means you'd want to delay the mortgage offer until April 2014.

A realistic timetable has been placed against the structure I've laid out above, in red, to guide you.

If you intend to use the Help To Buy Equity Loan scheme, you also have only six months to complete the purchase from the point you exchange contracts. You would apply for HTB at the time you make your reservation, but before you apply for the mortgage.

Sparx

Fantastic advice everyone, really appreciate the useful timeline kingstreet as a realistic guideline!

We don't plan to use the Help To Buy scheme so that should not be an issue. We are looking at going with Nationwide as our preferred mortgage lender.

Although when it comes to it, I will do another sweep of the mortgage products online, contact a few local mortgage brokers and see Redrow's own preferred advisor also to see what deal we can get.

Sparx

Does anyone have a rough idea if it's worth getting Redrow to do full height wall tiling or ceramic floor tiling in the bathroom + en suite? There prices are below. They sound extortionate to me and it looks like they probably make an easy 50% mark up on these..

Bathroom (2.51 x 2.13m)
£1350 - Full Height Wall Tiling
£560 - Ceramic Floor Tiling

En Suite (2.53 x 1.19m)
£1150 - Full Height Wall Tiling
£465 - Ceramic Floor Tiling

Baring in mind the bath in the bathroom and shower in the en suite is already full height tiled included, so it would just be the remaining wall/floor area.

Or whether I should just stick with vinyl?

geoffky

Sparx wrote: »

Does anyone have a rough idea if it's worth getting Redrow to do full height wall tiling or ceramic floor tiling in the bathroom + en suite? There prices are below. They sound extortionate to me and it looks like they probably make an easy 50% mark up on these..

Bathroom (2.51 x 2.13m)
£1350 - Full Height Wall Tiling
£560 - Ceramic Floor Tiling

En Suite (2.53 x 1.19m)
£1150 - Full Height Wall Tiling
£465 - Ceramic Floor Tiling

Baring in mind the bath in the bathroom and shower in the en suite is already full height tiled included, so it would just be the remaining wall/floor area.

Or whether I should just stick with vinyl?

Get them to pay...You need tiles in a bathroom.....Be hard in negotiations or be a wimp. your choice.

bclark

Sparx wrote: »

Does anyone have a rough idea if it's worth getting Redrow to do full height wall tiling or ceramic floor tiling in the bathroom + en suite? There prices are below. They sound extortionate to me and it looks like they probably make an easy 50% mark up on these..

Bathroom (2.51 x 2.13m)
£1350 - Full Height Wall Tiling
£560 - Ceramic Floor Tiling

En Suite (2.53 x 1.19m)
£1150 - Full Height Wall Tiling
£465 - Ceramic Floor Tiling

Baring in mind the bath in the bathroom and shower in the en suite is already full height tiled included, so it would just be the remaining wall/floor area.

Or whether I should just stick with vinyl?

Are those prices the ones you have been quoted in the sales office or are they taken from the myredrow section of the website? I ask because the prices that we have got extras at have been far cheaper than quoted on the website.

Sparx

Thanks bclark, yes those prices I took from the My Redrow page on the 'Explore Finishing Touches' section.. I'm glad you told me they are much cheaper in the sales office! As I have a list that nearly totals £8k of preferred extras. How much cheaper are we talking?

And well if they don't budge on the £164,950 asking price, I could probably ask for a few £k in extras do you reckon? They have already told me they would provide a 5% gifted deposit, stamp duty paid (1%) and throw in carpets & turf without me even asking so that must be standard.

Below was my 'wishlist' I made, although the prices will not be accurate if bclark is right and in the sales office the prices are much cheaper.

I was thinking of asking them to also throw in ceramic flooring+wall tiling for both the bathroom and en suite. And ask for the integrated dishwasher, built in wardrobes in bedroom 1+2.. Or is this too cheeky?

Location	Cost		Item
Kitchen	£545.00	Integrated Dishwasher
Kitchen	£265.00	Ceramic Hob
Kitchen	£1,105.00	Tiling to Kitchen Area
Kitchen	£565.00	Vinyl to Dining Area
		
Living		£90.00	Additional Double Socket
		
Bedroom 1	£90.00	Additional Double Socket
Bedroom 1	£835.00	Built-in Sliding Wardrobes
Bedroom 2	£575.00	Built-in Door Wardrobes
		
Bathroom	£1,350.00	Full Height Wall Tiling
Bathroom	£560.00	Ceramic Floor Tiling
		
En Suite	£1,150.00	Full Height Wall Tiling
En Suite	£180.00	Vinyl Floor Tiling
		
Outside	£170.00	External Power Point
Outside	£160.00	Outside Tap
Outside	£190.00	Side Gate
		
Total	£8,395.00

bclark

Well we got carpet, full tiling to kitchen, bathrooms etc for free. Free turf and Dishwasher too.

In terms of payment I forget the exact prices but we got things like the outside light for £75, external socket £45, outside tap £75. These were cheaper than the website but I forget the exact prices.

Sparx

Thanks, very useful to note when we negotiate.