Builders Discount (or Deposit)

j.a.mcguire

Hi there,

I'm a first time buyer and am looking at purchasing a new property with Story homes. A colleague at work advised me that Barrats offered him a Builders Discount (not deposit) off the price of the home of 10%.

I've been making enquiries with Story for a few years now and am finally in a position to buy. In the past they've told me that it's not possible to discount the price, but when I've asked them about a builders deposit they advised they can do a 5% deposit, or a 5% discount. They can't do a higher deposit because lenders don't like it, as it suggests the builder is over inflating the price, they provide the 5% to the lender and I provide the rest to apply for the mortgage. However this shouldn't really stop them from discounting whatever they want off the price of the property as the lender will never find out about it.

When I asked am I entitled to the 5% discount, Story advised advised yes I was. (??!) They then go hush-hush and will not discuss the matter further in front of other clients who enter the office.

Are builders obliged to provide a deposit or a discount over the advertised price? Is there some sort of government incentive here?

Does anyone have any experience with this developer, and any success in getting a higher discount than 5%? The prices in my opinion are over-inflated anyway.

davidmcn

j.a.mcguire wrote: »

However this shouldn't really stop them from discounting whatever they want off the price of the property as the lender will never find out about it.

I hope the builders didn't tell you this. You can't hide discounts / cashback or other incentives from lenders.

kingstreet

They can reduce the price by whatever they want. That is not an incentive.

Builder cash incentives are limited to 5%. Sometimes less on HTB Equity loan and in the case of several lenders, £0.

harz99

I have previously owned a Story house in Lockerbie.


They are as new homes go, well built, traditional construction, solid houses. The few minor snagging issues we had were dealt with promptly and fully, as were a few minor issues during the first two years of ownership.


I found the company easy to deal with, and honest in their dealings, unless things have changed their sales advisors are salaried, and not reliant on commission from sales.


As far as discounts are concerned this will very much depend on whether or not the house is finished, better chance if the plot has been completed for some time, and/or if the development is complete or nearly complete.


I would buy a Story home above Barrat or other major nationals every time.


Make them a sensible offer on the plot and see what happens, they can only say no - they said yes to me.


What is it you really want though, the lower deposit or a lower overall price - you won't get both.

j.a.mcguire

Lower overall price. The house style which I can afford doesn't have the view, and the house which does is a bigger property and I can't quite afford, although it would be a much better investment long-term. My colleague told me Barrats gave him a 10% discount, so I asked for the same 10% with Story but was swiftly knocked back. I'm FTB and have saved for a long time so I'm ready to go if they would just knock a few % off.

Not sure why the lender would ever find out that the property was discounted (not deposit) or how that would affect a mortgage with them?

Today they came out with, "if it's a new home the MD will not discount it, but would still potentially offer the 5% deposit". "If you were interested in X property which was due to sell but the buyer pulled out, we could probably offer you Y discount". It later transpired that the whole buyer pulled out story was most likely a lie. So I was left thinking, why all the games? I can only assume it was because they're finding it difficult to shift this particular plot.

Kingstreet I would be interested in any information you have on the 5% limit is this specific to builder deposits only? I could understand that, but how is it that lenders would know if the property was discounted?

P.S. They've asked me to get an affordability check with their preferred company before I can continue with them. From your experience should I do this? At the end of the day if I have a mortgage in principal with another lender a copy of the email should be proof enough?

I feel like if I do the check, it will give my hand away as they are likely in cohoots with the company, and they might not necessarily offer me the best deal.

harz99

j.a.mcguire wrote: »

Lower overall price. The house style which I can afford doesn't have the view, and the house which does is a bigger property and I can't quite afford, although it would be a much better investment long-term. My colleague told me Barrats gave him a 10% discount, so I asked for the same 10% with Story but was swiftly knocked back. I'm FTB and have saved for a long time so I'm ready to go if they would just knock a few % off.

Not sure why the lender would ever find out that the property was discounted (not deposit) or how that would affect a mortgage with them?

Today they came out with, "if it's a new home the MD will not discount it, but would still potentially offer the 5% deposit". "If you were interested in X property which was due to sell but the buyer pulled out, we could probably offer you Y discount". It later transpired that the whole buyer pulled out story was most likely a lie. So I was left thinking, why all the games? I can only assume it was because they're finding it difficult to shift this particular plot.

Kingstreet I would be interested in any information you have on the 5% limit is this specific to builder deposits only? I could understand that, but how is it that lenders would know if the property was discounted?

P.S. They've asked me to get an affordability check with their preferred company before I can continue with them. From your experience should I do this? At the end of the day if I have a mortgage in principal with another lender a copy of the email should be proof enough?

I feel like if I do the check, it will give my hand away as they are likely in cohoots with the company, and they might not necessarily offer me the best deal.

If as you have indicated above, Story won't accept you as a buyer until you do the affordability check, you have no choice but to do it - they don't have to sell to you do they.