Negotiate before exchange

[metallica121]

Hi,

I am a FTB and have recently reserved a new build property in London.
The property is ready to move in and was offered a discount on the asking price. The asking price was very exorbitant in the first place.

I am close to exchange and have now found that

• they are offering lower price on similar property in the next phase to be completed in 18 months

• Some of the properties in my phase were sold cheaper based on sold prices data

• Other issues found

I have paid a reservation fee but planning to ask them to reduce the price further given above arguments.

Can any experts suggest what is the best way to go about it? Any tactics? Any tips on how best to approach this? As a clueless first time buyer I think I should have negotiated better :(

Should I speak directly to the developer or ask my solicitor to speak to theirs?

Is email, phone or in person meeting best way? I felt an email would be appropriate as that would allow me to list my arguments.

Also, given it is almost coming to end of the year - is that an advantage?

Or will a big developer (corporate) not drop price given that they have the means to wait out over a normal person ?

Thanks and looking forward to pointers as I am close to exchange.

Bump :)

I don't have experience of this, however your solicitor won't negotiate for you - they do the legal work not act as price negotiators. Any price reductions or "extras" need to be negotiated direct with the developer/agent. Whatever tactic you decide to take, do not exchange until you have got them to agree to meet your demands (preferably in writing). Once you exchange contracts, they do not have to agree to anything.

I think you will risk your reservation fee but might be worth it if your reservation fee is still less than the money you’d save

Just do it and be prepared to walk. New builds bleed money and in London it will be worse.

They can only say no. They won't take it away from you out of petulance like a normal vendor might, even if they do stick with the price agreed.

Thank you all for your responses so far :)

Yes I risk losing the reservation deposit - though not full, just some admin fee.

This is the same situation where you buy something and you see it reduced the next day.

I am not after any extras. I am after price reduction which is in line with other units they are selling in the next phase. That is roughly £25K less !

When I reserved they had given me a discount off the list price, but tbh that list price was unimaginable and inflated and had said no more discounts.

What would be the best way I do this - should I walk into their sales office and speak to them OR send an email with my arguments on why the reduction is justified OR call them up and speak first?

Should I set a deadline for them to accept or else I walk away ?

Any pointers will be useful.

Thanks

You could always lose your reservation fee and then reserve one of the next phase properties at £25k less!

Yes you need to ask for a £25K discount - even this is likely to be inflated......so you could be left with significant negative equity.

Ask for that or more - and be prepared to walk. They will try to hold off but might give at the very last minute. Do not expect a quick decision.

Thanks everyone.

tiglet - good idea but I will have to wait another 18 months ;)

Just one last thing -

What would be the best way I do this - should I walk into their sales office and speak to them OR send an email with my arguments on why the reduction is justified OR call them up and speak first?

Should I set a deadline for them to accept or else I walk away ?

Want to hear opinions from others :)

I would email, less chance of you being bullied into accepting too little reduction. Email, and then follow up with a call to say you've emailed to discuss negotiations on price and could they respond promptly. Be actually prepared to walk away rather than pay more than the house is worth, new builds typically deprecate a bit after the sale, make sure you know the figure you want. The end of the year probably isn't the end of their financial year though, so they won't be under pressure to make sales that way. How are you financing it, you could always say the bank are reluctant to agree the to the valuation, or that with interest increases its not worth your money to pay over the odds.