New build flat - offer/negotiation points

Soldato
Joined
2 Jul 2010
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3,098
What levers are there? How best to approach negotiations without offending the developer? New builds in the area I am looking at seem to have a 15-20% premium attached to them per square foot and so I don't want to pay full price for the place we have found.

Somebody put an offer in for 9% less than asking and was told to do one apparently. It's been on the market since September and is the show-home at the moment.

We are thinking to offer around 4% under asking a week or so into lockdown 2.0. The hope is that they might be a bit more flexible during this. The estate agent hinted that 4% under would be a good starting point, which makes me think similar units might have gone for a similar price.

Angles/thoughts I have to enter the negotiations with are:
  • We love the property but it is a bit of a stretch for us at the current price but we would like to make it work
  • We love the property but we think it is somewhat overpriced. We see the amount we have offered as fair, given comparable properties on the market
  • Whilst we are ready to transact we are in no rush
  • We're worried about the risk of immediate negative equity given once we buy it we'll have a much smaller market to resell it to due to no HTB being available on the secondary market. This, coupled with the uncertainty of Brexit and now covid (given we're in a 2nd lockdown) has made us quite nervous. We do however really like the property and we hope we can make it work with the offer made
  • We think it needs some work doing (we actually do) in terms of the kitchen and lighting, would you accept 3.5% under asking if you are able to carry out this work for us? Or accept 4% under asking and we would pay the cost of materials to have the work done?
  • (Incentives - are these still a thing)? We could pay 3.5% under asking if you could cover the remaining stamp duty.
  • We'd be prepared to pay 3% under asking if you could give us an additional parking space
This would be our first time buying and so neither of us have any experience of negotiating these things. We do genuinely like the property and do want to buy it, however, I do think it is a bit overpriced and I think even at 4% off it would still be a bit overpriced.

Ultimately, I am prepared to walk away if they don't budge at all. We could go ahead with the property at full price but I don't want to. I think we'd just be leaving money on the table.

There are two other incomplete units in the building which are just like this and so I am not too worried about them all being snapped up overnight by other buyers, however, this is our favourite.

Any advice? Is what I have said above complete crap? How would you go about it? Should I say things like 'we love the property', 'we want to make it work' etc or will this work in their favour (I thought this might sweeten them up a bit and show we are not just bargain hunting)?
 
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Caporegime
Joined
21 Jun 2006
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38,372
If you really want the property then you offer asking or whatever the seller wants or marginally higher than you think anyone else will offer.

If you are prepared to lose the property then make any offer you deem suitable.
 
Soldato
Joined
14 Oct 2009
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UK
I would go in and say it needs X amount of work, we want that knocking off plus add a little bit for yourselves. Simple.

Don't need to tell them how much you like it etc

The property is worth what you want to pay, if its been for sale for a while and they turned down an office then good luck to them waiting it out.
 
Soldato
Joined
28 Jan 2008
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Location
Manchester
I'd avoid buying a flat but if you do go ahead make sure to properly read the lease, especially in regards to ground rent increase and length of the lease. Considering it's a new built then any cladding should be to code and not an issue.
 
Soldato
OP
Joined
2 Jul 2010
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3,098
Thanks for the responses thus far. Seems to indicate to keep it short and simple, offer what we think is fair and go from there.

Its a new build so probably doesn't need much work doing to it.

Did you even read the OP? It's a new build! Why would it require work?

I did briefly mention work in the OP, it's not 'major' work. Just a few extra lights, plug sockets and maybe a small area for a breakfast bar. Small things.
 
Soldato
Joined
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Location
UK
Did you even read the OP? It's a new build! Why would it require work?
ZOMG!?!?

Yes I did.

  • We think it needs some work doing (we actually do) in terms of the kitchen and lighting, would you accept 3.5% under asking if you are able to carry out this work for us? Or accept 4% under asking and we would pay the cost of materials to have the work done?
Thanks.
 
Caporegime
Joined
21 Jun 2006
Posts
38,372
Thanks for the responses thus far. Seems to indicate to keep it short and simple, offer what we think is fair and go from there.





I did briefly mention work in the OP, it's not 'major' work. Just a few extra lights, plug sockets and maybe a small area for a breakfast bar. Small things.

Lights and plug sockets lol.

No discount for that I'm afraid. They cost what at best £50 each to fix.

4% is nothing over the period of ownership.

I overpaid by 2.7% according to the home report.

I would happily do so again. The home has since increased in value by 21% in 4 years.

The owner actually wanted an extra 5.4% I said I couldn't do that but was happy to meet halfway.

I did however have a very good knowledge of the local market and seen several homes in the area and also kept a record of what condition similar homes were in what changes had been made and what they went for.

Personally I think the property was priced fairly at the price I paid for it and the home report had undervalued it.

If you really like it and would hate to lose it then 4% buys you that peace of mind. Nobody else can make the decision it's personal to you.

However if you lose it and end up paying 4% more for a similar property but without some of the pros then you will have wish you didn't cheap out.

I have lost out on properties by going low and I'm glad I did. Because when I found the right one paying a bit extra didn't matter to me for the perfect one.
 
Caporegime
Joined
20 May 2007
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39,655
Location
Surrey
As a new build, and with the property market actually doing quite well, you likely wont get much, if anything off it. Possibly a few %.

Developers normally prefer to sell their properties at asking, and then give incentives to attract buyers, such as stamp duty contributions, appliances, carpet, turf, a patio etc. Stuff that is valuable to the buyer, but cheaper for the developer to absorb.With it being a show home i imagine it is already very well kitted out with everything, and with the stamp duty holiday as well it doesn't sound like there is much they could do in the way of incentives.

It is unlikely they will get workers back in to improve/change it now it is built. Normally the incentives would be to add extras during the building process. Could be worth an ask though if it is just a few lights and sockets though. You might find you are better off in this regard, to go for one of the incomplete ones depending on what stage of the build it is at.

P.S. There is no way you are getting an additional parking space so forget that
 
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Soldato
Joined
17 Oct 2002
Posts
13,345
Location
London
I think house prices will fall. Use the help to buy to insulate your self from 40% off the loss.

I got 14% off on a london new build 18 months ago.
 
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