I've been conned - need advice

csgohan4

Sounds like sour grapes. You bought the property at the price you were happy to pay for. Things always go down in price later down the line when you buy items.


People complain when you buy that 20k car depreciates as soon as they drive it out of the forecourt. But they buy it anyways because it's new.


Your paying a premium for buying a new house, you knew what you were going in for. If you didn't like the risks, then don't complain and pull out.

alchemist.1

You just got done by a Sales tactic. Not anything you can do about it.

getmore4less

Welcome to the world of new build.

The game is the builder tries to get reservation to exchange ASAP.

The buyers monitor the nos getting reserved/exchanged to asess pricing.

The more you want a particular plot the earlier you have to be in reservation/exchange in case someone else snaps it up.

If they still don't sell expect further drops or a building site if they start delaying the build.


It has not been unknown for builders to sell blocks off at a big discount on a sale or return basis to get the sell through numbers looking good.
then as the remaining plots sell they get the discounted ones back.

silvercar

Actually your most likely chance of getting a reduction post contract is if your valuation comes in low and your lender reduces the amount they are prepared to lend. If that leaves you with no way of reaching the agreed price, the builder may be willing to negotiate. After all, if the other properties are being sold for less, the next buyer isn't going to pay what you agreed to pay.

That will cause you great stress however.

csgohan4

Bare in mind the build quality of new builds now a days is not good, google permission as a prime example.

Landofwood

silvercar wrote: »

Actually your most likely chance of getting a reduction post contract is if your valuation comes in low and your lender reduces the amount they are prepared to lend. If that leaves you with no way of reaching the agreed price, the builder may be willing to negotiate. After all, if the other properties are being sold for less, the next buyer isn't going to pay what you agreed to pay.

That will cause you great stress however.

Or perhaps the builder would prefer to retain the buyer's 10% deposit and then relist.

BobQ

Scorpzor wrote: »

A couple of months ago I put down a deposit for a new house. I got my mortgage offer and the solicitor sent me the contracts but I didn't immediately sign them as I wanted to have a good think about whether I was making the right decision.

2 days ago I received a phone call from my solicitor saying that he had received word from the builder that I need to exchange contracts by Friday (today) otherwise they would be 'reviewing the reservation on my plot'.

This worried me, and that night I signed the contracts and mailed them as soon as I could the next day so that they would be there by today. I then transferred the deposit.

I just got home from work a couple of hours ago and I have discovered that they have reduced the price of identical houses on the estate including the one that is attached to my house (its a semi) by £10000. I feel absolutely sick. What can I do?! I signed the contracts and paid the deposit just hours ago and now I discover this. I feel like I have been completely conned.

BobQ wrote: »

I can see why you are disappointed by telling people that they conned you is unfounded and will be counter-productive. You need to accept that the mistake was yours. You took 2 months to make a decision.

Had the builder taken 2 months to exchange I dare say you would have suspected he was delaying to get a better price!

Scorpzor wrote: »

I don't see why you are concerned about me saying I've been conned. I haven't said any names, neither have I accused anyone in person

.

I never said I was concerned. I simply made the observation that if you approach the professionals involved with the attitude that they conned you it will be counter productive. They have done nothing wrong and the word "conned" suggests you think they have.

Let me rephrase it then to I 'feel' like I've been conned, which I think is understandable.

OK you feel that. I am not sure it is understandable though. As DunstonH has observed it is one of the risks of buying off plans that the price will fall for other properties in the development. But equally it could have gone up for the later houses.

I put the deposit down 2 months ago. After that I had to get my mortgage offer which took about 5 weeks as they kept coming back to me with questions. Then when I received that I got the contracts, so I've had the contracts for less than a month. But I don't really see what the time has got to do with it

.

OK but that was not clear from your original post. So you have had them for a few weeks, Until exchange they cannot be certain you will buy. I think most people who had made an offer subject to contract, gone to the trouble of seeing through a mortgage application, and received a contract that their solicitor ws content with would want the deal tied up as soon as possible.

Its not like there was someone at head office spending all day sat worrying and losing sleep over customer number 4,192,654 not immediately returned his contracts.

That is not the way things work builders make profit by managing their cashflow for each development.

Also why would I care about the builder delaying the contracts?

Well clearly you would not, but most people who have shelled out on solicitor fees, valuations, and mortgage applications would probably want the deal done.

No-one is going to walk on to a new development and say hey, I see that one of the houses has sold already, so instead of buying one of the other 8 which are essentially exactly the same I want to offer more on the house that's already sold. I would have liked to sign on the last day if it was possible. The house isn't even watertight yet, so its not like I've left it for a ridiculous amount of time.

Without an exchange of contracts the only thing stopping them doing this is how it would look. All they were doing was asking you commit to the deal. They may well have another interested buyer who preferred the house that you have chosen (maybe they wanted one with an earlier completion date, who knows)

This is my first house and I have only just managed to get together the deposit by a miracle.

It shows.

Another year or two and I don't think they would have given me a mortgage. Obviously I have had the same worries as everyone else would go through about negative equity and buying at the right time and everything else that people worry about when buying their first home. This morning I was excited that I have finally done it. But then to find out hours later that they reduced the prices of all the neighbouring houses by £10k and therefore the value of my house has also dropped by £10k before its even had the windows put in it has soured what should be one of the most momentous and exciting occasions in to my life.

Can I suggest that you find another development in your area that was completed say 2 years ago and look up the sale prices on the Land Registry. You will be surprised how the prices of identical types of house vary across the development, depending on when they were bought, how much discount was negotiated etc.

In five years time none of this will matter.

You just need to understand is that buying off plan is a good way of fixing the price and guaranteeing that you get the house you want. If you have a big bank balance it is a good way of getting free interest however long it takes to complete. But it is not necessarily a good way of securing the best deals when the houses are complete.

I'm in negative equity 9 hours after the contracts have exchanged. In fact they wont even have received the contracts yet because they will still be in the post.

Unless you have a 100% mortgage this is not negative equity.

If all this worries you that much maybe you are over stretching yourself.

libf

I held off reserving a plot in the initial release on the site I'm buying off and the prices went up on the next release. That's life. I still prefer the location of my plot even if it cost more than the same house across the road.

getmore4less

Prime plots on a site can command quite a premium especialy houses that have the best garden(size&aspect) and better parking, less traffic, or potential to develop.

racing_blue

It is just bad luck that the pendulum has swung this way. It could quite easily have gone the other way, with the developers increasing the price of other houses on the development - some you win, some you lose.

Don't make this bigger than it needs to be, it will all sort itself out in the long term.

Let me share an experience. We bought a house on a small development a few years ago. The house was just what we wanted and we willingly paid top dollar. But shortly after exchanging contracts, the world economy went to custard. The last IDENTICAL house remained unsold for yonks. Then two years later it sold for well over £100,000 less than we paid for ours. Yep, that's not a typo. £100,000+. Imagine how that felt. We had been complete mugs.

But... the house was great. We lived in it. Our kids grew up with space around them. The garden started maturing, as did the whole development. We got on OK with our neighbours, even the ones who had stolen a £100K+ march on us... they never rubbed it in our face.

After about 6 years we moved on. The world had sorted itself out a bit, buyers had reappeared. We managed to sell for about the same as we had paid originally. Now it is history and I don't lose a moments sleep over what could have been.

So my suggestion is to just get on with your life, and enjoy living in your new house.