Negotiation on New Build possible?

nick1231

Hoping for some advice please?

my gf and I are looking to buy a new build. We are presently living in a flat which has sold (awaiting completion) and are looking to buy a new build 4 bed detached house found last year and love it.

That's where i believe the problem starts... we went straight into it and offered the asking price (£198995) that was advertised but were initially told we could get a lot of extras etc.

So a month later and the house is presently now got a roof on and they are plastering the walls etc and we were invited to look at options. We were excited but that soon changed when the sales agent denied any knowledge of agreeing to any extras and said we get nothing towards it from the developers. well my gf was really excited but inside i was fuming!!!

So not being happy with the response, I decided to do some research and to my shock i've found out through zoopla that the exact same house type build (different plot with a bigger garden than ours) went for 20K less in July 2014 and that its present value is only £189k. (The site itself has been there since 2012 and is very early into building stages)

Well like any normal person i wasnt prepared to buy straight into negative equity and asked the sales agent if they would be prepared to negotiate on this basis. She refused. i said i'd be prepared to look at any extras, she refused outright and said there was nothing available whatsoever (no carpets, stamp duty costs, legal fee support, optional extras, anything at all...) became very dismissive and aggressive to me and basically told me the price is what we reserved it as and theres no going back, they arent prepared to provide any extras and i should take 24 hours to think on it and come back to her with a decision.

The build is due to be completed end of March, we've only placed a £500 reservation deposit on the house so far so would only lose £100 if we withdrew. No contracts have been exchanged, nor conveyancer has been initiated.

Where do I stand on this?? Our main issues is we need to vacate our present property in the next few months so we are very keen to get this sorted otherwise face being without a property at all. Am i being unreasonable with what I'm asking or do you have any advice on how I could proceed?

binky21

I think you probably already know the answer to this.

You reserved the property at a set price, without any specific details of extras being included. For example, when I reserved my new build, I was told specifically that they would pay my stamp duty costs of £X amount. House prices are all dependent on demand. Whilst a similar property may have an estimated value of £189K, you were clearly willing to pay £199K and that is all that matters.

Whilst I think you still have an opportunity to negotiate, this all depends on the local demand. If it's anything like down here (South East), they can pretty much laugh you out the door as they know there will be another buyer in a matter of days.

Do you remember their exact wording when they mentioned the extras? There are certainly a huge number of extras (different door handles, garage doors, outside taps, etc.) that can be included, but they will all come at a cost.

matchboxfull

This also comes down to how you both feel about the 'deal' that you're now being presented with. Do you feel like you can pay what's asked, move in, and feel happy? Or do you feel like you will be seething about it for a long time and it will mar your enjoyment of your new home?

Have you thought about what might happen if the property is valued lower than expected by the mortgage company? Will you be able to make up the shortfall yourselves?

Don't worry about the few hundred quid reservation fee. If you have to walk away it's a small price to pay for avoiding an expensive mistake.

Is it just you and your GF at the moment? It's annoying but not impossible to get temporary accommodation for the two of you...maybe with a family member?

House-buying is so tricky because it's mixing a huge business transaction with big emotions. Try to step back and realise that you don't have to buy this house. Only buy it if you can a) afford to and b) feel that you could live in it without being resentful about its cost. My tuppence anyway.

Good luck.

nick1231

I thought that might be the case.

Can I not just ask them to un-reserve at this price and reserve at a lower reasonable price? i'd happily pay the £100 admin cost that i would lose by doing this?

My main concern is we will be in negative equity before it even goes through as an exact same build is valued at 10k less (£189k) than what we are potentially paying (£198k)?

The exact wording was "we can't move on the price but i will certainly look at giving you some additional extras". Although in hindsight we shouldn't have signed the reservation forms without clarification on this first....

Is that is then i cant move on this?

TonyMMM

You can ask whatever you like - they don't have to agree though.

All new builds are priced with a premium, so a little negative equity is almost inevitable when you move in ( depending on house price movements since you agreed the deal).

A lot depends on demand on the site - if there are plenty of buyers they will be happy to let you walk away....

nick1231

Well the gf is very adamant she doesn't want to lose the site.

I've spoken to the Sales manager and told me there was no way she could give us the difference of £10k in extras and that theres a lot of demand on the site but that she would look into it and let me know what she could do.

guess its playing the waiting game now.

Jon_B_2

You're looking at it the wrong way.

How long are you planning to live there? If it's a forever(ish) home then negative equity isn't the reason not to move.

What you have possibly done wrong was not read through the reservation form thoroughly as they list all extras on there. A verbal agreement can easily be "forgotten".

gregsayer

when I reserved my new build in October, the extras were recorded on the reservation form under "incentives" which included flooring, extra bathroom tiling and extra patio slabs"


if its not recorded on the form, then its not contractual


don't judge by a 18month old sale price, nor worry about a zoopla valuation, (zoopla makes its valuations by comparing sales data for the property, there is none on a new build)
look to see if any new build has come back to market in the area, I can tell you from my new estate (Norwich NR4) that 1-2 year old properties are actually being marketed higher then the remaining new build plots)

nidO

Your problem here is basically that the people you're dealing with are professional sales people, and you're not a professional buyer.

Their job is to sell the property for the most money they think they can possibly get for it, whether that's to you or someone else, not to get you a good deal.
This also means you have to be very careful about what's said in front of them, as well as to them.

Your ideal time to negotiate a discount or extras was prior to reserving, but it is still possible between reservation and exchange.

Your two problems though are:

If the properties are currently selling like hot cakes they have no reason to offer you a discount or extras regardless of their vague suggestions, because if you don't buy the property at the price they want, the next buyer will.

Secondly, is you and your girlfriend do not seem to completely agree. You want to negotiate for extras, your girlfriend is adamant that she doesn't want to lose the plot.
If your girlfriend said this in front of the salesperson then you're basically stuffed because they know they have you by the balls, especially once you've reserved they're only going to be offering you incentives if 1) they don't think they can readily sell it to someone else without AND 2) if they believe you're willing to walk away from the deal without them.
If your girlfriend has essentially told them you won't be walking away from the deal, they have nothing to gain by offering you a discount or extras.

csgohan4

An additional few suggestions is to do some research on new builds both for short term and long term use.


Coach your GF when you do viewings and don't be overly enthusiastic so they don't have anything to grab you by.


Not written down, not done. Verbal agreements mean nothing.


Leave your Gf

nick1231

It definitely didn't help with my gf being so keen... will remind her of this next time!

The regional sales manager said they would happily refund the reservation fee if it meant we werent happy with the way the house has been sold to us. She also said they have a waiting list although a very similar plot has been advertised on their website that still hasnt sold so id be very surprised if thats true. (Sales lingo i'm assuming)

The main thing i'm annoyed about is her argument that 'as a rule' they don't sell under the asking price to anybody to ensure continuity between customers; but having looked at land registry documents it just isn't true...!

I'm stuck between a rock and hard place because i dont want to be paying £10k extra for a smaller plot that 18 months ago went for £20k less and is still undervalued at £10k from our asking price. Equally, my gf is really keen on the house!

What would you do in my situation?!Is there anything in particular i should ask or any specific extras (at the moment we have been given absolutely nothing) or are there any tactics into getting them to throw in extras?