Anyone got any tips or experience for negotiating on offering on a new build house i.e. what percentage off the asking price is it acceptable to offer the developer that will be taken seriously and not be deemed as taking the piss?
Anyone got any tips or experience for negotiating on offering on a new build house i.e. what percentage off the asking price is it acceptable to offer the developer that will be taken seriously and not be deemed as taking the piss?
Many thanks
Have the property values. Work out the cost to you of the changes you might want to make to the property to suit you. Take the second figure from the first figure and offer that.
If the developer tells you they want more money than you're offering, ask them what you will get for the additional amount.
Also, don't worry what the developer thinks of your offer. If they think you're taking the piss, who cares? They're trying to take your money, not be your mate.
If they've all gone then probably not too much margin for obvious demand reasons. If they're going in dribs and drabs and lagging then there might be scope.
Is it a big development? Are the other other properties selling ok? Is it just been released - if lots of interest doubt they will reduce by much hit of don’t ask don’t get.
Can always ask if they can pay stamp duty for you.
Thanks all. They've sold half. Reasonably small estate not in a high demand area as in the sticks. Developer's financial year end is end of March and said to us not huget demand.
Read last night that they're always over pricefor at start and lose value like cars once you move in.
New to this so quite green and am happy and confident at negotiating but need to know what is reasonable and won't make me look like a time wasting clown whilst not being mugged off by the selling property company who does this for a living.
It also depends on how far the developer is away from completing the property.
My current house is a one off new build, built to a high standards, by a NI developer trying to break out in the South East of England.
I first saw the property when it was 90% completed and contacted the developer to find out where he intended to market it and how much for. He gave me a figure which I thought was slightly below the current market price.
I contact him directly the next day, told him that we were in a good position to move quickly and we'd offer 10% less as if he accepted he'd make substantial savings on his funding costs as well as his marketing budget. We settled on 7% - still a significant saving.
In the long run, it was incidental as we would have paid the asking price. It was to be our home for the next ten years and the actual affordability of the property - although important - was probably only third or on our list of requirements.
None of my business but new builds are being heavily criticised at the moment with huge dissatisfaction with build quality in almost every case.
Having been a labourer in my younger years on some barrats and other such new build estates I'd agree!
Currently renting a new build now and nicely finished etc but not as sturdy as older houses.
This won't be our home for life just aiming to get on the ladder and will potentially live there for a long time but equally happy to sell in a couple of years...being another factor that it needs to have reasonable resale value even if it's not huge.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
Offer £300k. If its new build it probably cost £25k max to put up.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
I obviously don’t know where the property is. If it were me I would go and see the agent on a slow midweek day. Face to face, not on phone. I would ask what deals are going and let them tell you. If they say “none” as I expect, I would not accept that. Say you are not paying full price. If they don’t give in say you can only pay £320k based on what your finances allow. I would start lower than 340. Good luck.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
I obviously don’t know where the property is. If it were me I would go and see the agent on a slow midweek day. Face to face, not on phone. I would ask what deals are going and let them tell you. If they say “none” as I expect, I would not accept that. Say you are not paying full price. If they don’t give in say you can only pay £320k based on what your finances allow. I would start lower than 340. Good luck.
Agree with this. Start low and work towards the middle ground. I would also have a maximum price that are you prepared to pay, so you are not dragged into any bidding wars
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
Offer £300k. If its new build it probably cost £25k max to put up.
What have you got to loose?
£25,000 to put up!!! That’s absolutely impossible.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
Offer £300k. If its new build it probably cost £25k max to put up.
What have you got to loose?
£25,000 to put up!!! That’s absolutely impossible.
Yes would tend to agree. The rule of thumb is 1/3 land, 1/3 build, 1/3 margin. Those are approximations of course and the margin could be more.
So on that basis the margin on a £375k house would be £125k. A £340k final agreed price would still give the developer a £90k profit.
Developers always keen to get an exchange before their year end. If they sell via an estate agent, have a chat via them rather than the developer direct. Always bid low to start.
On at 375...is 340 taking the piss?
Already been reduced since October.
Offer £300k. If its new build it probably cost £25k max to put up.
What have you got to loose?
Lol. Agree with earlier statement about older houses. But my next door neighbours house was valued at £145,000, but put up for quick sale at £135,000. Been on for 18 months and '1' viewing!!
Just asked a house purchase company for an offer and they offered £75,000. Location location location. Live near Meadowhall. House is a 3-bed detached circa 1900 brick built! Incidentally I paid £90,000 for mine in 2006. Inflation, what inflation!!
@RodneyCharltonTrotta Bought a new Redrow house when we moved to Wales. High demand area so no negotiating on price, but got loads of upgrades added in. Some people in other less in demand Redrow sites have got their stamp duty paid. They typically don't like discounting too much as it depreciates all the other houses and people always want the best deal.
Re prices - if you buy off plan and you're confident of the area, and it's a decent developer/development you can make a fortune. Ours has appreciated by about 20% in 2 years in Wales!
Remember to budget £10-20k for stuff you'll probably need to do right at the start - flooring, carpets, curtains etc.
New to this so quite green and am happy and confident at negotiating but need to know what is reasonable and won't make me look like a time wasting clown whilst not being mugged off by the selling property company who does this for a living.
Cheers
Thanks for all of the excellent tips and insight everyone...can always rely on this place.
Anyhow for anyone interested it Rodder's hardball went as follows this afternoon...
Rodney "happy and confident at negotiating"Trotta: "Is there any negotiation on the price?"
Seller *stern look*: "No. That's the asking price."
Rodney "happy and confident at negotiating"Trotta: "OK".
This time of year the developer is in no rush to sell so that's probably why they brushed you off. As you move towards June (and December) they will get more and more desperate and that's when the deals can be had. The best thing to do is to aim to find a property and make an offer around mid-late April. Tell them you'd like to be in by June. They will have a minimum price they can sell for, your job is to push them to that limit and find the sweet spot.
As with any negotiation it helps to have some kind of rapport with the sales person. We visited the site regularly and looked at everything they had and everything that was coming in the future phases. We even looked at stuff we were never likely to buy. You get to know them, they get a feel of where you are with your own sale/chain or whatever. I personally managed to get 45k off the asking price on our current property (5 years ago) plus they fitted my kitchen with all appliances and upgraded my cupboards and carpeted every room. I did pay for some extras on top too.
If the site is brand new, getting a deal will also be more difficult as they push for top dollar initially. They need houses to sell however because it's these funds that they use to build the later phases of the development so as more of the phase is built and not sold, the prices are dropped or deals can be done. If the price was reduced around October that would have been to try to force a sale before the end of the year. They'll just sit on that price for a bit now and you'll either see a reduction or more of a will to negotiate within the next couple of months.
Who is the developer of the site you've been looking at by the way?
That stamp duty paid for is a good discount to ask for. The house sells for the higher amount so looks good on the ledger and not like they are discounting and other people who have already paid dont feel put out. Check when the companies financial year end is.
Show homes are literally thrown together - avoid if possible.
The reason new builds aren’t as good as they used to be is because the majority of developers screw over their contractors and short pay at every opportunity and screw down the tenders. Consequently the company doing the work effectively buys the work to keep people employed, the developer changes the scope endlessly and fucks you over at the end too. There are companies going to the wall every fucking day because of developers (QS’s primarily) stitching up the little guys trying to pay their bills and staff.
My experience is you’d do well to get a 5% discount (gifted deposit) if you’re looking at a popular development.
Both times we’ve bought new that’s what we got - but ultimately I now regard my house as a home for the first time. Previous properties were just moving up the ladder
Comments
If the developer tells you they want more money than you're offering, ask them what you will get for the additional amount.
Also, don't worry what the developer thinks of your offer. If they think you're taking the piss, who cares? They're trying to take your money, not be your mate.
None of my business but new builds are being heavily criticised at the moment with huge dissatisfaction with build quality in almost every case.
If they've all gone then probably not too much margin for obvious demand reasons. If they're going in dribs and drabs and lagging then there might be scope.
Are the other other properties selling ok?
Is it just been released - if lots of interest doubt they will reduce by much hit of don’t ask don’t get.
Can always ask if they can pay stamp duty for you.
Read last night that they're always over pricefor at start and lose value like cars once you move in.
New to this so quite green and am happy and confident at negotiating but need to know what is reasonable and won't make me look like a time wasting clown whilst not being mugged off by the selling property company who does this for a living.
Cheers
My current house is a one off new build, built to a high standards, by a NI developer trying to break out in the South East of England.
I first saw the property when it was 90% completed and contacted the developer to find out where he intended to market it and how much for. He gave me a figure which I thought was slightly below the current market price.
I contact him directly the next day, told him that we were in a good position to move quickly and we'd offer 10% less as if he accepted he'd make substantial savings on his funding costs as well as his marketing budget. We settled on 7% - still a significant saving.
In the long run, it was incidental as we would have paid the asking price. It was to be our home for the next ten years and the actual affordability of the property - although important - was probably only third or on our list of requirements.
Currently renting a new build now and nicely finished etc but not as sturdy as older houses.
This won't be our home for life just aiming to get on the ladder and will potentially live there for a long time but equally happy to sell in a couple of years...being another factor that it needs to have reasonable resale value even if it's not huge.
All completed in past few months @Addickted
That will get you about £3k off for a starter - and still get to keep the white goods.
Look on here to get a feel for the 'real' as opposed to 'inflated new' value of properties in the area and surrounds.
Already been reduced since October.
What have you got to loose?
That’s absolutely impossible.
So on that basis the margin on a £375k house would be £125k. A £340k final agreed price would still give the developer a £90k profit.
But as others have said, don’t start at £340k.
Just asked a house purchase company for an offer and they offered £75,000. Location location location. Live near Meadowhall. House is a 3-bed detached circa 1900 brick built! Incidentally I paid £90,000 for mine in 2006. Inflation, what inflation!!
Re prices - if you buy off plan and you're confident of the area, and it's a decent developer/development you can make a fortune. Ours has appreciated by about 20% in 2 years in Wales!
Remember to budget £10-20k for stuff you'll probably need to do right at the start - flooring, carpets, curtains etc.
Anyhow for anyone interested it Rodder's hardball went as follows this afternoon...
Rodney "happy and confident at negotiating"Trotta: "Is there any negotiation on the price?"
Seller *stern look*: "No. That's the asking price."
Rodney "happy and confident at negotiating"Trotta: "OK".
***End of conversation***
As with any negotiation it helps to have some kind of rapport with the sales person. We visited the site regularly and looked at everything they had and everything that was coming in the future phases. We even looked at stuff we were never likely to buy. You get to know them, they get a feel of where you are with your own sale/chain or whatever. I personally managed to get 45k off the asking price on our current property (5 years ago) plus they fitted my kitchen with all appliances and upgraded my cupboards and carpeted every room. I did pay for some extras on top too.
If the site is brand new, getting a deal will also be more difficult as they push for top dollar initially. They need houses to sell however because it's these funds that they use to build the later phases of the development so as more of the phase is built and not sold, the prices are dropped or deals can be done. If the price was reduced around October that would have been to try to force a sale before the end of the year. They'll just sit on that price for a bit now and you'll either see a reduction or more of a will to negotiate within the next couple of months.
Who is the developer of the site you've been looking at by the way?
The reason new builds aren’t as good as they used to be is because the majority of developers screw over their contractors and short pay at every opportunity and screw down the tenders. Consequently the company doing the work effectively buys the work to keep people employed, the developer changes the scope endlessly and fucks you over at the end too.
There are companies going to the wall every fucking day because of developers (QS’s primarily) stitching up the little guys trying to pay their bills and staff.
My experience is you’d do well to get a 5% discount (gifted deposit) if you’re looking at a popular development.
Both times we’ve bought new that’s what we got - but ultimately I now regard my house as a home for the first time. Previous properties were just moving up the ladder
Depends how much you want it really.