Should we negotiate on new build house’s price?

[Rose429]

We found a new development that we love. We’re looking at a 3 bedrooms at £400k.

The development was just launched 2 months ago and it’s literally just a construction site at the moment. They’re offering a 5% deposit match to attract more buyers and there’re some plots have been sold already.

They expect to complete their first batch of houses in autumn. This means we risk having to apply for a new mortgage application in the summer because whatever mortgage offer we have to apply for now will expire in 6 months.

We’re first time buyers, chain-free. Should we haggle on the price and how much?

In my (admittedly not wide ranging experience) if houses are selling well and it's early in the development they're reluctant to reduce the price of the house itself because it sets a precedent and can devalue other houses on the development.

We ended up negotiating hard for things like flooring/turf/wardrobes/other extras and got these things thrown in for free/very reduced, but they wouldn't budge on the price of the house itself. This was 5 and a half years ago, though (and we've moved since) so was not against the backdrop of interest rate rises/house price instability etc.

You can always ask.
I think under the circumstances they’re unlikely to give you a reduction, most developers maintain the price but will throw in extras - see what they say.

Absolutely ask, it can happen especially if the estate is near completion, but you're more likely going to get them to negotiate on extras as opposed to house price which can impact future sales.

What we did, we had a set amount we wanted off, we just went in very ballsy and said we can only buy if it is X cheaper (entirely true, we had a limit of up front cash) they gave us stamp duty, money for wardrobes and a mortgage "contribution" the labels were moot, essentially what happens is when you complete your solicitor gets a sum to send to you.

It'll depend how the development is selling as to how much you will be able to negotiate, we went at a point house sales were dwindling so got a fair bit, when we tried a couple years earlier we didn't get so much as a light switch thrown in.

Oh and we got flooring and upgraded kitchen.

It's worth asking.

We didn't get any incentives as we only put down a 5% deposit.

We did have to have a mortgage offer that was valid until the long stop date (so valid for 11 months). You should look into using a broker

Very unlikely to get a discount on the purchase price as that can affect later phases of the build's pricing. But they will throw in upgrades to kitchens/flooring/bathrooms etc to entice you.

I'd see what's included for the price, for example, laminate worktops. Then haggle to see if you can upgrade to quartz.

If they suggest laminate flooring, see if you can upgrade to LVT/wooden floors etc.

See if kitchen appliances can be included, so dishwasher, fridge freezer, washing machine if integrated etc. You can add several thousand pounds worth of 'extras' to the negotiating without a price reduction

@Goldpanther we only had a 5% deposit too, we did have to check with the mortgage company that they were happy with the incentive offers as there are rules as to how much you can have in terms of LTV.

Absolutely negotiate, they will have a ‘dealing margin’. New builds do depreciate particularly if early in the development phase. This is not an issue in a rising market buying 12 months before completion as you’d make this back, but in a potentially falling market buying 12 months out that is a possible double whammy. I suppose realistically this is only a problem if you had to sell within a few years of buying which hopefully is unlikely. Also check carefully about your mortgage company and whether they would want to do another valuation on completion of the build and what the developer will agree to if it’s down valued - risk likely to sit with you to find the additional funds as you will have exchanged on a previously agreed property value and paid the deposit. We are interested in a couple of new build developments but I can’t see past the risks of a falling market and buying off plan many months in advance. I think we will wait until the ones we like are finished and risk that they might be all sold by that point.