New build homes & haggling.

[BennyC]

Hi guys,

I'm considering the possibility of a new build house as part of my house hunt. I'm in quite a good position with an 85% deposit, first time buyer with no immediate need or rush to move. The particular development is a little further away than the area I had been looking with another 15-20 minutes on the commute (40-50) total though my work may well move. My traveling times will be before the morning and evening rush hour so the time may actually be less.

Anyway, I'm aware of the reputation new builds have for build quality, sound proofing etc. My father had a new build in early 2001/2002 and the walls were a little thin but I'm aware new regulations for insulation have come in since then. The particular plot I'm interested in would be detatched so it would only be internal sound insulation that would be an issue. I've got a viewing of the show home on Sunday where I'll decide if it's worth some more thought.

I'm curious as to what others here managed to negotiate off the price of the new build home? Obviously several factors will affect the developers willingness to co-operate such as development popularity, how far along the phase is, their sales for that month/quarter etc. The developer in question is Taylor Wimpey.

Regardless of this being a new build due to my favourable position I would probably offer (assuming everything was in order) around 15% under asking with a view to settle on nearer 10% (which would leave me without the need for a mortgage and also bring it under the stamp duty band, which they'd probably offer to pay anyway) and then also try to ring as many free extra's out of them as possible, carpets, curtains, fictures & fitting upgrades etc etc.

Has anybody had an experience haggling with any property developers? If so I'd be interested to hear your thoughts & experiences.

Please try to keep the new build home bashing to a minimum

Thanks,

BennyC

 

[dbov22]

85% deposit, wow, wish I was in that position, you can defnitely haggle, it's been done before, buy off plan for the best discounts, tell them you'll buy in cash if they throw in the extras you want.... the person selling will be on commission anyway, they'll be keen to sell in today's climate...new builds are very very badly finished these days

 

[Paul11]

you can offer whatever you want

they will say yes or no

start lower, you can always go up

if your 85% deposit and not in a hurry you should be able to grab yourself a bargain if you haggle hard and shop around

 

[Ben Cole]

I bought a flat new build three years ago just before the big crunch hit. Up for £165,000 and I got nearly 20k off. The negotiating was tedious though and I was in a strong position. Which you also are so push hard.

The best way to do it is to have numerous properties you like and go for the one you can negotiate the best price for.

 

[Bes]

I really cannot understand why people are looking to buy with the way the odds are stacked against house prices at the moment.... Falling prices, unemployment rising, interest rates about to start rising, uncertain job market, lack of FTBs and mortgage cash for FTBs to get 'on the ladder'... I think it's an ill -advised decision to wade into the housing market with all this uncertainty.

However, if you MUST buy, and I think it's insane to do so at the moment, you should negotiate extremely hard. Everyone needs capital, and you are in a very good position.

 

[Rotty]

I really cannot understand why people are looking to buy with the way the odds are stacked against house prices at the moment.... Falling prices, unemployment rising, interest rates about to start rising, uncertain job market, lack of FTBs and mortgage cash for FTBs to get 'on the ladder'... I think it's an ill -advised decision to wade into the housing market with all this uncertainty.

.

when there is certaunty it will be too late

house prices are more likely to remain stagnant, ok they will fall in real terms but not cash terms

interest rfates, projections are that the worst case scenario is base artes at 2% in 2 years, still very low

job market, well I think it will always be uncertain to some extent and should improve from here in private sector

re mrtgages, well if you can't get one you can't buy if you can then great

we are at the bottom of the curve at the moment and this is exactly the time to buy

 

[GinG]

I really cannot understand why people are looking to buy with the way the odds are stacked against house prices at the moment.... Falling prices, unemployment rising, interest rates about to start rising, uncertain job market, lack of FTBs and mortgage cash for FTBs to get 'on the ladder'... I think it's an ill -advised decision to wade into the housing market with all this uncertainty.

However, if you MUST buy, and I think it's insane to do so at the moment, you should negotiate extremely hard. Everyone needs capital, and you are in a very good position.

Maybe he is buying a home and not just looking to make a quick buck? Long term houses will always be a safe investment, it is the short term that is a problem.

The development we have bought on was very very strict with pricing and everything, 90% of the houses were bought off plan and very little discounts given! They have only just introduced incentives for the last few houses.

I must say I am very envious of you having 85% deposit, that is some serious wonga! (assuming houses you are looking to buy are £200k ish?!) - well done!

Sorry forgot to add my 2p regarding new houses:

I love our house, no issue with sound etc. Great blank canvas, do not think you are going into a house with nothing to do! Ours is a 3 story, 3 bedroom. The space is very good, 2 double bedrooms on 2nd floor with the 3rd being on top floor, it is the whole size of the top floor with an en-suite.

We are just starting to make it feel like a home, kitchen tiles etc been laid, waiting for blinds to be fitted etc.

It hasn't come without some snagging, the boiler breaking over the weekend being one, but they come out and sort it straight away.

Would I buy another new build off plan? - Yes

As for falling house prices, our house was up for £190k. 5 months later the same house specs, smaller plots, no garage are up for £210k off plan for the next stage of development. Not too bad I guess

 

[Bes]

when there is certaunty it will be too late
house prices are more likely to remain stagnant, ok they will fall in real terms but not cash terms

Based on what? I gave my reasons for falling prices. What are your reasons for a stagnant market?

interest rfates, projections are that the worst case scenario is base artes at 2% in 2 years, still very low

Come on, these 'predictions' are about as reliable as a two- year weather forecast. Even if interest rates are only at 2% by 2013, that adds 2% to any non- fixed mortgage plus whatever premium the bank slaps on top, and you can be sure they will, as they are desperate to re-capitalise. This could put an extra 50% or so on a typical base +3% mortgage.

job market, well I think it will always be uncertain to some extent and should improve from here in private sector

Again, based on what? Public sector will certainly see reductions, and with the economy swinging between low and negative growth, and soft consumer demand, I can't see that there will be any increase in jobs in the public sector any time soon. The whole sector was given a boost last year by companies looking to shore up inventories, but it looks increasingly like that was just a blip.

re mrtgages, well if you can't get one you can't buy if you can then great

Yes but if 99% of people can't afford a mortgage, then there is a problem: Property is too expensive.

we are at the bottom of the curve at the moment and this is exactly the time to buy

So do you think there has been a paradigm shift since the 1990's and house prices at 7x earnings is the new 'norm'? How is that sustainable long term?

 

[BennyC]

when there is certaunty it will be too late

house prices are more likely to remain stagnant, ok they will fall in real terms but not cash terms

interest rfates, projections are that the worst case scenario is base artes at 2% in 2 years, still very low

job market, well I think it will always be uncertain to some extent and should improve from here in private sector

re mrtgages, well if you can't get one you can't buy if you can then great

we are at the bottom of the curve at the moment and this is exactly the time to buy

This is similar to my own thoughts. The base rate can only really go up it's just a case of when and by how much. Waiting for house prices to fall further may well result in a higher interest rate on a mortgage so it would effectively level itself out but leave you with less to live on each month.

Maybe he is buying a home and not just looking to make a quick buck? Long term houses will always be a safe investment, it is the short term that is a problem.

Aye, I'm looking for a home rather than a quick turn around on cash. That's not to say I'm not after a bargain and that I do want the property to appreciate (if the market rises again) and I don't want to pay over the odds for it purely because I like it/location/timing is right.

The development we have bought on was very very strict with pricing and everything, 90% of the houses were bought off plan and very little discounts given!

Ooo err, the project appears to be in phase 1 and the particular plots I had in mind are off to the west and at the front (from a birdseye view) phase 2 looks to be built to the north and north east. I'll have to enquire about off plan plots as the current plots I'm interested in for the size of the garden face west (assuming their projection is showing in keeping with N/S/E/West.

I must say I am very envious of you having 85% deposit, that is some serious wonga! (assuming houses you are looking to buy are £200k ish?!) - well done!

It's inheritance from my fathers death a year and a half ago so it wasn't the best way to come into that sort of money. However I'm sure he would be pleased that he's allowed me to be in this position and made things a lot easier for me. The houses in principle are being advertised for £270,000 so I want to be hammering that right down providing the timing is right. I have £15,000 worth of 'goods' planned to buy to fully furnish and install a log cabin for a home gym in the garden. Securing the property for £235,000/245,000 would allow this to happen without the need for a mortgage.

Sorry forgot to add my 2p regarding new houses:

I love our house, no issue with sound etc. Great blank canvas, do not think you are going into a house with nothing to do! Ours is a 3 story, 3 bedroom. The space is very good, 2 double bedrooms on 2nd floor with the 3rd being on top floor, it is the whole size of the top floor with an en-suite.

We are just starting to make it feel like a home, kitchen tiles etc been laid, waiting for blinds to be fitted etc.

It hasn't come without some snagging, the boiler breaking over the weekend being one, but they come out and sort it straight away.

Would I buy another new build off plan? - Yes

Thanks for that. Good reviews of new build homes aren't very common as people only come on the internet to moan and complain, rarely to explain how happy & pleased they are. Glad you're enjoying your house!

 

[Rotty]

Based on what? I gave my reasons for falling prices. What are your reasons for a stagnant market?

Come on, these 'predictions' are about as reliable as a two- year weather forecast. Even if interest rates are only at 2% by 2013, that adds 2% to any non- fixed mortgage plus whatever premium the bank slaps on top, and you can be sure they will, as they are desperate to re-capitalise.

Again, based on what? Public sector will certainly see reductions, and with the economy swinging between low and negative growth, and soft consumer demand, I can't see that there will be any increase in jobs in the public sector any time soon. The whole sector was given a boost last year by companies looking to shore up inventories, but it looks increasingly like that was just a blip.

Yes but if 99% of people can't afford a mortgage, then there is a problem: Property is too expensive.

So do you think there has been a paradigm shift since the 1990's and house prices at 7x earnings is the new 'norm'? How is that sustainable long term?

2010 Q4 £163,244 £163,244 £167,898
2010 Q3 £167,354 £169,126 £166,710
2010 Q2 £168,719 £171,269 £165,531
2010 Q1 £162,887 £168,515 £164,359

2009 Q4 £162,116 £169,573 £163,197
2009 Q3 £160,159 £169,479 £162,042
2009 Q2 £154,066 £164,413 £160,896
2009 Q1 £149,709 £161,051 £159,757

soory the columns are , price , "real price" and inflation adjusted

looks stagnant to me

re interest rate predictions I am basing them on fols that know more than me and you, they are actually saying 1.25% by end 2012, not the end of world, predictions can be wrong but they can also be wrong in both directions

with minor growth forecast then jobs market will be stable at worst in private sector, the worst has alreasy happened

property is not too expensive in a lot of the country, it is perfectly affordable here

the house price to wage ration is nowhere near as important as wage price to mortgage payment ratio which is lower than the 1990s I believe

the doom forecasters will have you ebleive that the world will always end soon, as bad as a lot of things are at the moment the majority of folks are still doing fine but there is no news in reporting that

 

[LordSplodge]

I really cannot understand why people are looking to buy with the way the odds are stacked against house prices at the moment.... Falling prices, unemployment rising, interest rates about to start rising, uncertain job market, lack of FTBs and mortgage cash for FTBs to get 'on the ladder'... I think it's an ill -advised decision to wade into the housing market with all this uncertainty.

By that mentality nobody would ever buy a house. The market could fluctuate either way at any time. Nobody can accurately predict a large fall.

Interest rates? Well the predictions aren't bad (as per Freefallers post) and plenty of people kept buying properties when they where 5%.

Jobs? Anybody could lose their job at any time. Whilst the public sector jobs market is on a little shaky ground at the moment the provate sector in a lot of areas is doing well enough to be creating jobs.

The major problems with the housing markets are the lack of first time buyers. That needs to be addressed but not like the old lend to anybody approach that got us here. The other issue is the way lots of people try to use the housing market as a way to make a quick buck.

Ok moving on the the OP. With an 85% deposit I'd be haggling like I was at a Moroccan market. Seriously. It is a buyers market.

Of course I'd never buy a new build personally. I like my brick (or stone) interiors walls but it is all swings and roundabouts. The character of old homes usual means a higher upkeep!

 

[Bes]

2010 Q4 £163,244 £163,244 £167,898
2010 Q3 £167,354 £169,126 £166,710
2010 Q2 £168,719 £171,269 £165,531
2010 Q1 £162,887 £168,515 £164,359

2009 Q4 £162,116 £169,573 £163,197
2009 Q3 £160,159 £169,479 £162,042
2009 Q2 £154,066 £164,413 £160,896
2009 Q1 £149,709 £161,051 £159,757

soory the columns are , price , "real price" and inflation adjusted

looks stagnant to me

re interest rate predictions I am basing them on fols that know more than me and you, they are actually saying 1.25% by end 2012, not the end of world, predictions can be wrong but they can also be wrong in both directions

with minor growth forecast then jobs market will be stable at worst in private sector, the worst has alreasy happened

property is not too expensive in a lot of the country, it is perfectly affordable here

the house price to wage ration is nowhere near as important as wage price to mortgage payment ratio which is lower than the 1990s I believe

the doom forecasters will have you ebleive that the world will always end soon, as bad as a lot of things are at the moment the majority of folks are still doing fine but there is no news in reporting that

Yes but you haven't answered my question:

do you think there has been a paradigm shift since the 1990's and house prices at 7x earnings is the new 'norm'? How is that sustainable long term? This is what you are suggesting.

OBR seem to be the only people who think that there will be a net increase in jobs between now and 2015. http://www.telegraph.co.uk/finance/jobs/7978313/Public-sector-jobs-outlook-darkens.html

the house price to wage ration is nowhere near as important as wage price to mortgage payment ratio which is lower than the 1990s I believe

Yes, but this is exactly what will deteriorate thanks to two forces and sink the housing market:

1) Stubbornly high inflation on goods and utilities but not reflected in wages (which can be offset by: )
2) Interest rate rises which negatively affect the ratio you talk about.

Yes a lot of people are doing fine, but the numbers in arrears or repossession is still high as a long- term average.

 

[GinG]

Sorry to hear about te los of your father, but like you say I would think he is very pleased that you are able to be given a great help in life.

If you have any other queries about new houses please do not hesitate to ask. As said you hear so many horror stories about them.

End of the day I get the following:

2 Year guarantee on everything, emergency call out within 24/48hr
10 year guarantee on the building, windows etc.
Watching the house being built, amazing to think when we purchased the house it was just a field!
The thought that we were the 1st owners of the house is really nice
Being able to make it our home, brilliant blank canvas with very little work to do structural.

Go to the site sales office and see what they have to say, you are in a very very good position with very little risk of the sale to fall through. You may get a suprise, they may be desperate to sell the house and you get a bargain!

 

[Rotty]

Yes, but this is exactly what will deteriorate thanks to two forces and sink the housing market:

1) Stubbornly high inflation on goods and utilities but not reflected in wages (which can be offset by: )
2) Interest rate rises which negatively affect the ratio you talk about.

.

inflation is only temporarily high due to short terms forces, fuel price, commodities and VAT

with the above being true there is no pressure for large interest rate increases

 

[Edrof]

...new builds are very very badly finished these days

Agree! They look great but are just thrown up.

 

[Rotty]

Yes but you haven't answered my question:

do you think there has been a paradigm shift since the 1990's and house prices at 7x earnings is the new 'norm'? How is that sustainable long term? This is what you are suggesting.

.

yes due to the fact that we are unlikely to ever see the interest rates of the 90s

 

[daver]

Hmm looking to buy a flat myself in a few months. Will be a first time buyer with a decent deposit not quite your level (30-35K looking at flats 125K maybe a bit more). I'm looking at either new build or nearly new but the prices on new builds seem to be a bit higher than the resale market, wouldn't mind finding out what prices the ones the developers say have sold have actually gone for...is there anyway of finding this out given they are still being built so the actual 'sale' won't have gone through?

 

[BennyC]

Sorry to hear about te los of your father, but like you say I would think he is very pleased that you are able to be given a great help in life.

If you have any other queries about new houses please do not hesitate to ask. As said you hear so many horror stories about them.

End of the day I get the following:

2 Year guarantee on everything, emergency call out within 24/48hr
10 year guarantee on the building, windows etc.
Watching the house being built, amazing to think when we purchased the house it was just a field!
The thought that we were the 1st owners of the house is really nice
Being able to make it our home, brilliant blank canvas with very little work to do structural.

All of the above appeal to me. Although on the flip side gardens of existing builds in my price range tend to be a little bigger in some cases. However from the arial view of the phase some of them look to be of a reasonable size in proportion to the house so it's not all bad. I could also make my mark on garden too.

Having a say over the design of the kitchen, worktops, bathroom tiles, taps, door handles, coving etc is all a plus too.

Go to the site sales office and see what they have to say, you are in a very very good position with very little risk of the sale to fall through. You may get a suprise, they may be desperate to sell the house and you get a bargain!

The build I'm looking at happens to be the second most expensive on the phase at current so it'll be interesting to see how I'm treated. I've had some pritty shocking experiences with estate agents and I'm dreading ever having to deal with them again in the future!

The particular plot must only be about half a mile from a train line that runs direct in to London so it would be perfect if I were to ever work in London but also as I plan to rent the extra rooms out to friends or lodgers.

I won't mention what 'I can afford' but what 'they can afford' to guarentee probably the easiest completion ever. I'll keep my poker face on and see what they have to say

 

[BennyC]

Hmm looking to buy a flat myself in a few months. Will be a first time buyer with a decent deposit not quite your level (30-35K looking at flats 125K maybe a bit more). I'm looking at either new build or nearly new but the prices on new builds seem to be a bit higher than the resale market, wouldn't mind finding out what prices the ones the developers say have sold have actually gone for...is there anyway of finding this out given they are still being built so the actual 'sale' won't have gone through?

You'll have to wait for the used prices to show up on zoopla etc to check. Unless any owners you happen to see wouldn't mind disclosing how much they have paid. I would probably completely ignore what ever the developer tells you they're selling for. I also read to negotiate as much as you can with the sales office but to then ring head office and haggle the deal further with them too as they have more authority to drop prices & throw in extra's.

 

[dave1983]

Me and my Fiance are looking at a 2 bedroom flat for 50% of the shared equity, total mortgage is £172,000 we need a mortgage for £86,000, we have been lucky enough for her family to help out with the depost, which is 10% = £8600, Im looking to haggle down to 70,000 as it's been on the market since November.