New build negotiation - 2014

Blackfish_2

Hi,

I am going to negotiate to purchase a new build on Sunday. Can anyone supply some tips?

For example, I intended to haggle for carpets and kitchen upgrade. Reading some posts here, it seems I should be asking for money off the listing price - up to 10%. However, the posts I refer to were from a few years ago (2008 and 2012).

I understand the market is picking up this year. How strong is my position? Should I be looking for the upgrades only, or a price reduction? I do know that the same property type was sold last year for around 200k whereas they are now valued at 230k. The owner had upstairs carpet and a kitchen upgrade included. How do I ask for these things? Should I hold out? I am nervous that there are others interested - it seems to be a popular development.

Thanks for any help!

BF

bclark

It's interesting that you titled it wih the year because it's certainly relevant as things have changed.

It always depends on the area and development but from what I have seen in my local market recently and from experience of my brother and a friend buying then get ready to pay the asking price and get no incentives at all.

At the development that I live on (thankfully I got in earlier) they are literally having queues outside the sales office on the day they release the houses. This is for large 4 bed houses too not shared ownership.

That's not to say this is what will happen for you, and you should always try and get the best deal possible but if you need a big discount in order to afford it then don't count on it.

kingstreet

Our developers have four or five buyers for each property at release, so discounting is not particularly deep.

Flooring, turf and perhaps money towards legal & broker fees are still pretty standard, but watch your cash incentives as certain lenders will not accept them.

dgtazzman

The site we're buying at in Northampton (luckily we also got in just before all hell broke loose) has sold out till March of next year. As soon as a property is released, they are being snapped up and many people are being sent away, disappointed. It is a crazy, crazy market at the moment, not only in London. People are reserving these houses before the final sale prices are even set, as they are only confirmed around 5 months before completion, when the early bird reservations are turned into actual full fledged reservations.

Unless you are buying in Scotland or Wales, I'd say you can forget about negotiating on price. Carpets and turf are usually easy to get, as they cost the builders near enough nothing. Direct financial incentives (legal fees, stamp duty) are more difficult, especially if you intend on using Help To Buy. Many will say Help To Buy is already an incentive and they can't offer anything else. This is total toss, Help To Buy doesn't cost the developer a penny, it's just a handy excuse for unknowing buyers.

As Kingstreet said, if you do manage to get legal fees or stamp duty paid, check your lender and if using HTB, your local HTB agent is happy with this, many have restrictions.

I'd also be prepared for the property to be down valued by the lender's surveyor if the last batch sold for 30k less, have contingency plans in place if this happens.

Good luck.

Oh, and for reference, just 6 months ago we got:

Flooring (including tiles where requested)
Turfing
A few extra sockets
Various socket moves
Extra TV socket
Integrated white goods, including dish washer
Outside water tap for the garden
Towel radiators in the bathrooms

As we have 4 months delay on the build, we are also getting some compensation:

1 month's rent paid
Any extra conveyancing charges we have to pay due to having our mortgage offer extended
A few rooms painted in colors we have requested (did have to provide the paint ourselves)
Extra wall tiling in the bathrooms
Hopefully £500 towards getting trade in to put our flat pack furniture together when we do finally move, though this compensation has not yet been approved by the higher-ups
Upgraded cooker hood

The people buying the same house type now are lucky to get carpets and turfing. If we hadn't exchanged contracts back at the start of February, I'd imagine it would be more rewarding for them to dump us and find a new buyer ^^

ethank

We were able to get a whole heap of discounts, although this was 9 months ago!

18% discount.
Kitchen Upgrade
Bathroom Full height tiling
Outside tap
Carpets and flooring
Garden turfed

However our property fell through for somebody else - hence the discount!

On our development - the standard sale price for a 3 bed has gone up by 10% - no discounts at all - and there are no free incentives = they are charging for everything!