How much to offer on a new build that never sold

lessonlearned

Cheeky_Monkey wrote: »

Seriously!!!

If, as you say in your other thread, the absolute top of your budget is £220k, I doubt very much that they will accept being as its £50k below asking price which is already a £15k reduction on the original price.

I used to be a negotiator on new build houses. A £50k reduction on a £270k house is not unknown.

It all depends on the builders circumstances which is why I advised the Op to do some homework.

I.e......is it the end of the financial year, are they mothballing projects, are they letting their workforce go, are they waiting for the market to turn, are they "resting" over the winter or are they ticking over, are they paying crippling commercial interest rates on their borrowing. Is it a limited company - if so the shareholders might be pushing for their dividends so the builder might be forced to sell at a loss rather than wait for the market.

Buying from a developer is a whole different ball game than buying from an individual. They might not be bothered about selling right now, but then again they might need their capital to stay afloat. It all depends on their debts and their cash flow.

I was once drafted into a failing development. It was over schedule and way over budget. It was a case of get in and do whatever it takes to get the last ones sold and get out.

The project ended up running at a £4m loss, so taking a £50k hit on the last plot was a drop in the ocean. Sometines for a builder it's a case of get out whilst you can and move onto the next one to recoup your losses as quickly as possible.

During the last crash I knew of several resales on houses just a few months old (the developments weren't even complete) that went for 50 per cent of their original purchase price.

It all depends on how badly the vendor needs to sell.

Pennyb90

Thanks ever so much! I'll get on that just now, hopefully I'll be lucky with it all, and if not knowing this I will be much more confident looking into other new builds! Thanks again all!

Crashy_Time

ReadingTim wrote: »

The only way to frame it. If they dropped the price to £1 they'd be shot of it by the end of the day.

Nah, not really sensible is it, dropping a HOUSE, a whole house? to £1? On the other hand they could accept that the market is a bursting bubble and knock 20% off, that might do the trick?

Crashy_Time

lessonlearned wrote: »

I used to be a negotiator on new build houses. A £50k reduction on a £270k house is not unknown.

It all depends on the builders circumstances which is why I advised the Op to do some homework.

I.e......is it the end of the financial year, are they mothballing projects, are they letting their workforce go, are they waiting for the market to turn, are they "resting" over the winter or are they ticking over, are they paying crippling commercial interest rates on their borrowing. Is it a limited company - if so the shareholders might be pushing for their dividends so the builder might be forced to sell at a loss rather than wait for the market.

Buying from a developer is a whole different ball game than buying from an individual. They might not be bothered about selling right now, but then again they might need their capital to stay afloat. It all depends on their debts and their cash flow.

I was once drafted into a failing development. It was over schedule and way over budget. It was a case of get in and do whatever it takes to get the last ones sold and get out.

The project ended up running at a £4m loss, so taking a £50k hit on the last plot was a drop in the ocean. Sometines for a builder it's a case of get out whilst you can and move onto the next one to recoup your losses as quickly as possible.

During the last crash I knew of several resales on houses just a few months old (the developments weren't even complete) that went for 50 per cent of their original purchase price.

It all depends on how badly the vendor needs to sell.

Nice. Many people will be happy to hear that

getmore4less

What have you to lose if your max is well below what you think they will accept, put it on table.

Make sure you are happy with the rest of the site completion.