new built incentives (gentoo)

finder

Hello

Wondered if someone has gone through the process of buying a new property from Gentoo, a North-East based builder. I have just reserved a plot from them but I am annoyed at the fact they would not negotiate on the price whatsoever. My annoyance comes more from the fact that the property is priced slightly (4K) over the 125K tax threshold. I really wanted the property and was more persuaded by fear (the agent saying that the property is closed to be ready and that they had other buyers in the waiting list) than anything else.

Anyway, I am having second thoughts and have not exchanged yet and just wondered whether this developer in particular is prone to negotiate prices or just simply go by the list prices (as their agent keeps repeating me). I have also seen other developments from Taylor Wimpey and Persimmon and they were not that hard to persuade to either offer a 5% discount on the list price or to a considerable amount of extra add-ons on the new property.

Cheers

dgtazzman

If other builders are happy to give you discounts/incentives, just dangle that in front of this Gentoo and tell them they either drop down to 124,999 to avoid stamp duty, or they can keep the house and you'll go talk to the friendly sales staff in the other builder's site offices...

Nothing like playing competitors out against each other.

finder

Yes, I did mention the discounts offered by other builders but they wouldn't lower their price (or just offer to pay the stamp duty). Their take not to do that is that they have always had plenty of demand for the site. I can't help but wonder whether that is the case going forward as they seem to have had several plots on sale for a few weeks and they haven't been reserved (and will be ready towards the middle of 2015).

Anyway, I still have a few days before exchange and keep pondering whether I should try to renegotiate the price (lender's valuation agreed in price with builder's listed price) and simply pull out altogether if they don't bring the price down to the tax threshold (which would be a "discount in the price" of around 2.5%). Am I being unreasonable?

martin.cat

The stamp duty threshold should cap prices. I guess they have plots for 125 with smaller gardens etc so it's reasonable to charge more for some plots. They could have charge 132 and paid your duty would that have made you happier? Other builds are probably over pricing to begin with.

I've just sold my house for 130. Houses on my estate go for 120 no problem better ones for 125. Ours has an extension so I expected more. In 3 days I had 4 viewers 3 made offers. One stuck to 125 because of stamp duty and are now buying property across road with no extension plus smaller garden for 124500. I think they will kick themselves as extra £5k mortgage equates to £30 a month so not a deal breaker but £1300 duty must have been

dgtazzman

Might try if they agree to sell you the house for 124,999 and then agree to 5000 worth of (probably highly overpriced) upgrades (floors, kitchen upgrades, turfing, you'll soon get to 5k). You happy, they stand to lose less.

It's a bit cheecky, but a possibility you could consider.

Little_Miss_Shopaholic

I have put a reservation on a new build with a different developer to you but who is also a smaller developer and they also refused to negotiate. My house is due to be finished in January.

I tried to negotiate a reduction or incentives thrown in but they just weren't having it, their argument was the house is still under construction so they are not loosing money at the moment, they have another six months before they need to worry by which time the house prices will most likely have gone up.

In the end I had to try and look at the bigger picture and although the house is costing me more than I would like it is a lovely house and an excellent plot so in six months time when I'm sitting in my living room of my beautiful house and I am happy none of this will matter.

I guess the question you need to ask yourself is how much do you want the house and the plot? Have you spent any money which you will loose by not exchanging contracts? If so are you prepared to loose it when you walk away. In my case I decided I wasn't prepared or loose the house but only you can decide what's right for you.

Good luck with whatever you decide to do.

finder

martin.cat wrote: »

The stamp duty threshold should cap prices. I guess they have plots for 125 with smaller gardens etc so it's reasonable to charge more for some plots

I agree with that. The stamp duty threshold caps prices or at least it does for a lot of us. I know that thresholds play in peoples minds as it is playing in mine at the moment.

You might be surprised by this, but this builder doesn't seem to price plots differently. As long as you are buying the same "house type" from them, the price is the same regardless of whether you are buying a terrace house or a corner plot. The same goes for the garden; prices do not chance if the garden is a bit smaller but you got to the development late and couldn't choose a plot. I was quite surprised by this because it looks like the people who got the not-so-nice plots are subsidising the ones who got the nicest ones when in reality they should have been priced differently. The "bad thing for me" is that I got to the development late, so I am sort of picking up the pieces. House should be ready in the next 4-6 weeks as the person who had originally reserved the plot dropped out at the last moment and the agent knew we could proceed quickly. I thought that would play in our favour giving us bargaining power but it didn't make any difference.

dgtazzman wrote: »

Might try if they agree to sell you the house for 124,999 and then agree to 5000 worth of (probably highly overpriced) upgrades (floors, kitchen upgrades, turfing, you'll soon get to 5k). You happy, they stand to lose less.

It's a bit cheecky, but a possibility you could consider.

Yes, I actually tried that. I thought that the reservation stage would be my last chance to negotiate on the price but they wouldn't take it. I understand that they be reluctant to change their list prices (how would that make feel the people who bought the same house type for the same price?) but it would be very easy for them to agree on 4-5K of extra add-ons as you are saying.

The feeling I got when I was signing is that they would have let me walk out of the door without a deal while trying to find somebody else who could proceed quickly (the agent says they had people in a waiting list but seeing how they have similar unreserved plots to be completed towards the middle of next year makes me ever more doubtful of that). Somehow I think, that if I had stood my ground at that moment and not signed (at the risk of losing the property) I would have had the agent on the phone a few days later with some sort of incentive (or maybe not!)

Little_Miss_Shopaholic wrote: »

I guess the question you need to ask yourself is how much do you want the house and the plot? Have you spent any money which you will loose by not exchanging contracts? If so are you prepared to loose it when you walk away. In my case I decided I wasn't prepared or loose the house but only you can decide what's right for you.

I stand to lose around 1K if I dropped out without any further incentives. Have to balance that against the 4-5K that I think I am losing straight-away in the short term by taking it. I do like the house but it doesn't tick for all the things I was looking for. My wife loves it and that's where I have the biggest problem in trying to explain this!

The other thing that keeps coming to my mind is how much the builder would stand "not to gain" should we dropped out in the end, bearing in mind the closeness of the completion date. Gosh, never thought buying a property would be a such game of wills!

finder

finder wrote: »

Hello

My annoyance comes more from the fact that the property is priced slightly (4K) over the 125K tax threshold. I really wanted the property and was more persuaded by fear (the agent saying that the property is closed to be ready and that they had other buyers in the waiting list) than anything else.

Cheers

Hi all

We are not far from exchanging but have finally decided we can't proceed if the builder doesn't drop the price to the tax threshold (125K) or add incentives covering the excess from the tax threshold. Given the location/type of buyers in the area, we believe we would struggle to reasonably sell the property at a price higher than 125K if we had to move in the medium term (3-5 years). Does anyone have any views who would be the best person to redirect our new offer to: the builder's home advisor or my solicitor (who was recommended by them)? Any other advice regarding this pre-exchange change of heart would also be welcome!

Many thanks

Bowes100

I too have just purchased a property from said builder and yes all the houses were the same price. Be very careful though.

When I went to reserve my plot, I was basically asked what I wanted in the house. We asked for approx 10k in upgrades and were granted them, we were also asked to pick an Easter egg out with prizes in and won £250 worth of vouchers to be given on completion. My mortgage adviser then advised us to change our 10% deposit to 5% and we lost the incentives and paid for our up grades separatly, which was fine. However we were still expecting to get the vouchers on completion. No they are stating they have withdrawn them too as apparently it wasn't a competition prize but an incentive. Disgusting behaviour thats really left a sour taste in our mouths!

I will say we were harrassed when it came to exchanging contracts within 28 days even though on reservation I advised my property was STC and would take approx 6/8 weeks, which they agreed. Even moving onto completion I was getting terrible emails from the sales team saying my solicitor wasnt getting in contact with them and one member of staff telling me my solicitor was crap!