Purchasing new build - Renegotiate

Torrel

I am currently in the process of purchasing a new build in the North West for £226,500 (the asking price) with Bloor Homes. I am a first time buyer with a large deposit and using help-to-buy. The property was due for completion in June, however they have now pushed this back until July (however i suspect this will be pushed back again). They are now pushing to exchange contracts which I have refused to do until there is more certainty. Due to the delay I will have to renew my rental agreement and incur costs, chipping into my deposit.
I have I e-mailed them expressing my concerns and when they have called my back, have dodged the question, and then a few days later tried to slip the exchange of contracts into my hands (perhaps thinking I wouldn't understand the implications due to my age and it being my first property).

I would think the current circumstances would give substantial negotiating power, especially being a first time buyer with no chain. I would like to renegotiate price, and am willing to loose the property if it comes to it. How much do you think I should offer? And how likely do you think they would be to accept? Is anyone else in the same situation currently with a new build property?

I am hoping for 10% but I'm not sure how realistic this is.

Thanks in advance!

Comms69

What costs? Why do you need to renew? - neither of those make sense.

Send a link to the property? At the minute i could say offer 150k and that could be outragious or reasonable.

Semple

Despite what other posters on here will say. Noone knows what the housing market will do until things start moving again. 

Unfortunately time is not on your side, as the house builder will put pressure on moving towards exchange, which means you'll need to make your decision pretty quickly. Likely before the market decides what it's doing. 

You do have some advantages on your side being a FTB etc, and the house builder may prefer to have a secured sale rather than have it relisted and wait for other buyers. 

I think the issue you'll face is going in with a 10% drop without any evidence to back it up. 

Comms69

Semple said:

Despite what other posters on here will say. Noone knows what the housing market will do until things start moving again. 

Unfortunately time is not on your side, as the house builder will put pressure on moving towards exchange, which means you'll need to make your decision pretty quickly. Likely before the market decides what it's doing. 

You do have some advantages on your side being a FTB etc, and the house builder may prefer to have a secured sale rather than have it relisted and wait for other buyers. 

I think the issue you'll face is going in with a 10% drop without any evidence to back it up. 

The biggest issue is using help to buy, as that limits the market. 

blue_max_3

A house builder will have considerable experience of selling their homes. You imagine they'll just accept any figure you pluck out of thin air? Ask yourself, if you offer 10% less and they refuse are you actually going to walk away? If so, how about 5%? Decide in your own mind what you are prepared to pay for it and stick to it. I doubt they would be into lengthy negotiations.
Did you have to pay a deposit? - typically they specify a time to exchange.

Torrel

Comms69 said:

What costs? Why do you need to renew? - neither of those make sense.

Our rental contract is due for renewal in June. We will have to pay a penalty for accepting and then cancelling early. Also the rent we are paying now is substantially more than the mortgage we would be paying.

blue_max_3 said:

A house builder will have considerable experience of selling their homes. You imagine they'll just accept any figure you pluck out of thin air? Ask yourself, if you offer 10% less and they refuse are you actually going to walk away? If so, how about 5%? Decide in your own mind what you are prepared to pay for it and stick to it. I doubt they would be into lengthy negotiations.
Did you have to pay a deposit? - typically they specify a time to exchange.

There will always be another house, so if it comes to walking away I will be willing to do so if it means not getting shafted. I don't think I can happy accept paying full asking price for the house giving current conditions, and the builders would be stupid to not offer anything.
The deposit was only £100. The time for exchange period has been extended due to Covid.

Comms69

Torrel said:

Comms69 said:

What costs? Why do you need to renew? - neither of those make sense.

Our rental contract is due for renewal in June. We will have to pay a penalty for accepting and then cancelling early. Also the rent we are paying now is substantially more than the mortgage we would be paying.

blue_max_3 said:

A house builder will have considerable experience of selling their homes. You imagine they'll just accept any figure you pluck out of thin air? Ask yourself, if you offer 10% less and they refuse are you actually going to walk away? If so, how about 5%? Decide in your own mind what you are prepared to pay for it and stick to it. I doubt they would be into lengthy negotiations.
Did you have to pay a deposit? - typically they specify a time to exchange.

There will always be another house, so if it comes to walking away I will be willing to do so if it means not getting shafted. I don't think I can happy accept paying full asking price for the house giving current conditions, and the builders would be stupid to not offer anything.
The deposit was only £100. The time for exchange period has been extended due to Covid.

Just let it go rolling monthly? There's no cost.
Rent vs mortgage is irrelevant. 

Have you got a link to the property?

numbercruncher8

Several threads on here about these sort of things.
Obviously the pressure to exchange is wanting to lock in a previously agreed price, and a fear of large-scale renegotiations.
It seems absurd to listen to generalisations here, it really depends on the situation. If your house is the last one going and there is plenty of interest, they aren't going to be patient (although this seems unlikely, they could make an ultimatum otherwise).
If there are lots of houses not exchanged and many others are thinking the same as you, then your chances are a lot better.

Personally I would look at how the property scales up against the competition, particularly houses that are were new builds a few years ago. If you have a large deposit, you may not need help to buy. For instance on one of their websites, a 4-bed semi-detached brand new is £285k, but then there is this for £100k less in the same postcode :https://www.rightmove.co.uk/property-for-sale/property-68562258.html. Don't know the area, but that seems like a big price discrepancy.

sst1234

OP you have been asked for the link more than once, but not provided it. You are asking for advice but holding back information which makes this a piece of string question. On the face of it, it makes sense to renegotiate, the market has ceased and will take many months to get up and running again. Developers are losing money everyday. But like I say, piece of string. 

homeless9

On a new build I would offer less. You possibly could have offered less to begin with, before all this coronavirus stuff happened. I think with new builds developers chance their arm to see if they can get as much money as possible. If the development/house has been around a while then that gives you a better chance of getting a lower price.

I was interested in a new build and it happened to be the last one available (though I did not know this). I offered 8% less than asking price and it was accepted because the developer 'got good prices on the other 3 homes'.

I could have decided to renegotiate more off as this coronavirus came along, but as I already have a good deal in place I didn't bother.

I do wonder though if the other one that's still reserved and yet to be moved into is being renegotiated as I expected them to be moved in by now. I am moving in at the end of the week. I expected them to be in before me.

70Jenny2184

OP I am in exactly the same position as you. Only paid £100 to reserve, should have exchanged March for June completion but both stages now delayed. 

I am in no rush and not contacting the developers to discuss anything at this stage. If they contact me I'll tell them I want to hold out to wait and see what happens. Don't mind if they cancel my reservation and I stay renting where I am a little longer until climate feels less risky to buy.  I'll say no hard feelings and feel free to contact me when the house is built if it hasn't been sold.

I am hoping for a 10% discount eventually but this isn't a negotiating tactic.  I genuinely will not take any financial risk right now and willing to lose this house and see how the post coronavirus property market plays out.