New Build Negotiating

LaNuevaAndaluza

Hey all, 

I've read a lot on this website about negotiating incentives for new build properties but I've never seen anything that specifically answers the questions I have, so hoping to get a little help here. 

1. How do you go about negotiating? What phrasing do you use? I imaging something a little more subtle than, "Can you throw in xyz to the total price?" or "How low of a discount are you willing to give me?"

2. I'm looking at an extremely popular development in my area. Out of the 150 flats they have going, only 5 are at the top of my list due to where they are in the development and the overall size. How likely is it that they'll even offer incentives or discount knowing how in-demand the development will be, also considering I will be using HTB to get it (all of the properties for sale are HTB).

3. I haven't saved up a lot for my deposit yet. Plans state they will be handing over keys next summer (roughly) and reservation won't be open until later this year/early next year. What was your experience from reserving the plot to finally paying the deposit and securing the mortgage to moving in?

4. Bearing in mind this is also in a highly sought after area so it'll also be a first come first served, is there anything I can do between now and reserving to ensure I can get at least one of the plots I want, if any at all?

Thank you! 

Racky_Roo

1. Tbh that's exactly what you say. I'm interested in plots X, Y Z;. Are there any deals or incentives with them. I would also ensure they know you are looking at other new builds in the area (lie if necessary) as you can sometimes play them off against each other
2. Then you're unlikely to get any money off the asking price or any incentives if it's very popular and there's a queue of people to buy. You'll know pretty quickly how confident they are in selling when you go to see the showhome as they won't discuss any discounts or incentives if they know they'll sell quickly
3. I paid a £500 non refundable deposit when I had my offer accepted. I wasn't asked to exchange in 28 days which was lucky as I had a property I was selling 
4. Be really nice to the sales person, have an agreement in principle in place and agree to see their mortgage advisor regardless of whether you want to or not, you don't need to commit to a mortgage with them 

LaNuevaAndaluza

3. I paid a £500 non refundable deposit when I had my offer accepted. I wasn't asked to exchange in 28 days which was lucky as I had a property I was selling 

What was the process and time period between paying the £500 to paying the full deposit and getting the keys?

Are you generally expected to pay the deposit and exchange contracts within 28 days?

Thrugelmir

LaNuevaAndaluza said:

3. I paid a £500 non refundable deposit when I had my offer accepted. I wasn't asked to exchange in 28 days which was lucky as I had a property I was selling 

Are you generally expected to pay the deposit and exchange contracts within 28 days?

If you want incentives then you need to commit to the purchase. 

AdrianC

LaNuevaAndaluza said:

I've read a lot on this website about negotiating incentives for new build properties but I've never seen anything that specifically answers the questions I have, so hoping to get a little help here. 

1. How do you go about negotiating? What phrasing do you use? I imaging something a little more subtle than, "Can you throw in xyz to the total price?" or "How low of a discount are you willing to give me?"

Why not?

There is no official list of magic words that equate to X%...

2. I'm looking at an extremely popular development in my area. Out of the 150 flats they have going, only 5 are at the top of my list due to where they are in the development and the overall size. How likely is it that they'll even offer incentives or discount knowing how in-demand the development will be, also considering I will be using HTB to get it (all of the properties for sale are HTB).

They will give discounts where they don't think they can sell at full price.

If you're being picky about plot, and there's a queue behind you waving money, forget it.

3. I haven't saved up a lot for my deposit yet. Plans state they will be handing over keys next summer (roughly) and reservation won't be open until later this year/early next year. What was your experience from reserving the plot to finally paying the deposit and securing the mortgage to moving in?

Get saving as hard as you can, as soon as you can.

4. Bearing in mind this is also in a highly sought after area so it'll also be a first come first served, is there anything I can do between now and reserving to ensure I can get at least one of the plots I want, if any at all?

Until you reserve, it's quite simply anybody's... First to reserve gets it.

Once you've reserved, it's yours so long as you don't miss the exchange deadline.
Once you've exchanged, it's legally yours so long as you don't fail to complete.

LaNuevaAndaluza

Thrugelmir said:

LaNuevaAndaluza said:

3. I paid a £500 non refundable deposit when I had my offer accepted. I wasn't asked to exchange in 28 days which was lucky as I had a property I was selling 

Are you generally expected to pay the deposit and exchange contracts within 28 days?

If you want incentives then you need to commit to the purchase. 

So you'd need to exchange contracts within 28 days?

LaNuevaAndaluza

4. Bearing in mind this is also in a highly sought after area so it'll also be a first come first served, is there anything I can do between now and reserving to ensure I can get at least one of the plots I want, if any at all?

Until you reserve, it's quite simply anybody's... First to reserve gets it.

"Is there anything I can do between now and reserving to ensure I can get at least one of the plots I want...?"

LaNuevaAndaluza

LaNuevaAndaluza said:

4. Bearing in mind this is also in a highly sought after area so it'll also be a first come first served, is there anything I can do between now and reserving to ensure I can get at least one of the plots I want, if any at all?

Until you reserve, it's quite simply anybody's... First to reserve gets it.

"Is there anything I can do between now and reserving to ensure I can get at least one of the plots I want...?"

As in, can I increase my chances of getting a plot, and if so, how would I go about that?

AllPaws4

Friends of mine actually went and sat outside the Sales office for at least a day before the reservations opened to ensure they were first in line. I suggest you make sure you know when the reservations open and be prepared to camp out. 

Before that, go back & look at the show homes a few times, armed with measurements for your bed, likely sofa etc so that you really are sure you want the property. 

LaNuevaAndaluza

AllPaws4 said:

Friends of mine actually went and sat outside the Sales office for at least a day before the reservations opened to ensure they were first in line. I suggest you make sure you know when the reservations open and be prepared to camp out. 

Before that, go back & look at the show homes a few times, armed with measurements for your bed, likely sofa etc so that you really are sure you want the property. 

Yeah I did expect to measure out all our furniture against the rooms. I might not camp out because I have a baby :P but I am definitely keeping an eye out for when reservations open.

From the looks of things they're still in early-ish stages of building (framing, cladding, insulation) so I'm hoping we'll have a good 6 months at least before then.

stressedout45

The incentives that you will be able to negotiate depend on how popular the development is and what stage the build is at.  

We exchanged contracts on the purchase of a new build a few weeks ago, and complete next month.  The build of our plot was underway at the point we reserved.  We had to choose our kitchen, tiling and flooring options shortly after reserving because they were at that stage of the build of needing to know what we wanted.

  We managed to negotiate an included kitchen upgrade (integrated appliances and the choice of various work tops and cupboard doors), flooring throughout, and some chrome spotlights in one of the bathrooms.   

Turf in the back garden is already something our developer includes as standard. I believe this is unusual though.  I mention this because I often hear of people buying with other developers negotiating for this to be included.

I would say there is usually room for negotiation of the price -  The show home for our house type was available to purchase at the time we reserved… but we were not keen on its location on the development… that plot is still for sale now, and would actually be out of our price range if we were to come along can reserve it right now.. but it was well within our range at the time!  So the prices are definitely overinflated.  

In terms of the deposit - we are using the proceeds from the sale of this place, as with the usual property chain situation.  I believe if we had been first time buyers, we would have paid the upfront deposit on exchange.  

Our lender requires a higher deposit of 15%, rather than the 10% that would be required if we were buying a non-new home.. I have no idea if that is usual or not if I’m being honest! 

We paid a £500 reservation fee.  

The developer will probably ask that you speak to their financial advisor to get ‘financially qualified’… you don’t HAVE to do this, but this is not a big deal and will show them that you are serious and in a proceedable position. 

Regarding exchange deadlines.. Oh God - this caused me so much worry.. because of many ups and downs in our chain, we exchanged contracts over two months after the initial 28 day deadline!  Our solicitor repeatedly told us not to worry, because we were motivated buyers and got all our completed paperwork etc sent back very fast, so the developer could see that we were serious and held onto us as buyers.   There solicitor told us that he had reiterated to the developer that the problems were nothing to do with us, it was issues with the bottom of our chain.. he told us that the week before exchange, the developer admittedly did start to get a little bit twitchy and make noises about the amount of time it was taking. Fortunately,  we exchanged soon after that conversation!  

(I will say that I have read many horror stories about the developers being a lot less patient than ours have been with us - at the end of your initial 28 day reservation period, they are well within their rights to put the property back on the market if you are nowhere near exchange). 

One other thing to mention is that I very strongly advise that you use a solicitor who is specialised in newbuild conveyancing because it is a whole different ball game.  

good luck and I hope any of this rambling has been useful in some way to you.