£250 reservation fee to secure plot but no negotiations - is this right?

ironlady2022

More houses were released on the new site today in the area I'm interested in. She said at this stage I could only put down £250 to secure plot and no negotiations on price of £175k. 6mths before build completion they would ring me and ask for the next £250 making this the 'full reservation fee'. At that stage she said I can negotiate on price and extras. If ok, start mortgage application

Does this sound about right? The £250 is 100% refundable if we can't come to an agreement.

I guess there's not much to lose except my friend bought same house in Nov (moving next month) at £165k negotiated down from £170k. Think this was before it got popular. So ideally I'd like at least 5k off.

ethank

You can try to negotiate (I would), but be mindful that Help to Buy has stimulated a lot of demand on some sites, and the builder will simply think there are others.

The same house I bought is now up for £38k more than I offered in August last year, and they are still selling!

ironlady2022

Tried this morning and she wasn't having any of it. They were only released this morning and they have been very busy.

I'm holding on to the fact that new mortgage rules will mean it's harder for ppl to get a mortgage.

I've decided to reserve it tomorrow.

dgtazzman

On the whole, I doubt MMR will have that much of an impact. Many lenders have already been phasing in the rules for some time. When we applied for our mortgage back in November, we were asked about all our outgoings in detail, the only big difference now I think is that this procedure now lays with the lender, rather than the broker.

People might be able to borrow a bit less than before, but the people that were going to get a mortgage before MMR, are still likely to get a mortgage now.

The demand on the housing market also seems to be outstripping what is on offer in many places now, doubt that's going to change in the next 6 months. Also, it seems interest rates have started inching up, which might encourage a lot of FTB's to get their foot on the ladder now, while they can still profit from historically low interest rates. I know I'm already regretting only fixing for 2 years...

I have been in a lot of contact with the sales staff on the development we are buying on these last weeks as there have been a few creases that need ironing out before completion and I can tell you, every time I go in there, there tend to be 2 other interested buyers coming in and a few phone calls from interested parties, that while they have upped the asking price on the properties around 10% since we reserved ours in November.

Doubt builders are going to see a slowdown in sales now till the interest rates start pricing people out and/or Help To Buy is scrapped.

ironlady2022

Good point! Guess I was secretly hoping!

bclark

It sounds like an earlybird reservation and as such it's right that there is no negotiation on price at this stage, at least this is how the ones I saw worked.

I was nervous about getting involved when I was looking as you have shown your hand a fair bit in negotiations terms.

Having watched people on our development literally queuing up to reserve plots when they are released though it seems that this is the best way to get hold of the one you want but that when it's released I doubt there will be much negotiation anyway.

kingstreet

We've just taken on another development by one of our builders. On the day the site office opened, there was a queue of 120 people outside.

We qualified about five buyers for each property and the initial release was all sold that day.

Our current experience is that it is "take it or leave it" with a small cash incentive available with the builder covering our fees and offering £1,000 towards solicitors' costs.

ironlady2022

I have nothing to lose in putting down early bird for £250 as it's 100% refundable if we cannot come to am agreement at the next stage.

This is phase 1, stage 2, overall it's 279 houses and they intend to build across the road totalling 1000 houses. So that's a lot of selling they intend to do.

comeandgo

1000 houses planned but they may take 3 years to build them. If you have your eye on a specific plot I would go and place my £250 now. If show house open today other people may reserve it. As you say, the money is refundable.

ironlady2022

Yeh they have only released the first 60 houses you see-itsvery early stages still. And by securing now the price is set - it won't go advice. Doesn't mean you can't negotiate down - but I understand it doesn't mean I can get anything off.

I'll be the first person through doors this morning!

ethank

kingstreet wrote: »

Our current experience is that it is "take it or leave it" with a small cash incentive available with the builder covering our fees and offering £1,000 towards solicitors' costs.

What a difference six months makes!