Negotiating the price on a new build?

[Alexatancu]

We are really interested in a new build house that’s already built, and ready to move in to, and it’s the end of the final phase of building. It’s been on the market since end of November.

The position we are in is that we have a house to sell which should be on the market in about a week. We assume that the buyer would be a first time buyer as the property is a flat so the process to complete I assume should be no more than 3 months since there would be no chain? I have already called the estate agents prior to seeing it to ask if the developer would expect to exchange in a month as we wouldn’t be able to move that fast since we have a property to sell and they said that although that is their goal they understand that it’s not very realistic and are flexible.

The house is around 5% more than what we can afford- realistically could we negotiate? The houses are not in a very convenient location, and are quite expensive for outside of London and far from transport links. The house is also completely finished so can’t negotiate fixtures/fittings etc.

My plan is to view it, offer 15% less, then 10% and 5% being the last offer and hope they’re willing to negotiate? Either that or a 5% gifted deposit I’m thinking.

Part-exchange?
I don’t know how it works but when I purchased a new build, I was asked if I wanted to do this (irrelevant as I didn’t have a property to part exchange)

if it’s not sold, perhaps they might be willing to cover stamp duty? Would that affect your affordability enough?

I would be careful about over extending myself in this climate. (Significant case of buyers remorse in terms of affordability)

If you have the gross floor area you can calculate the £/m2
Then compare that you local houses in good order.
If they compare favourably then price is on par, if not then it’s not

just because a house is new doesn't mean you can’t negotiate just like any property

Remember just because a house in new doesn’t mean there won’t be lots of snagging issues ( make sure it’s written into your contract that they will be sorted by the developer at no cost to you ) also ensure developer is insured.

I'd be surprised if they weren't wiling to negotiate. We have three new developments in my town. Until the summer, none of them were negotiating or offering incentives (popular area). Since September, they have sold very few and the offers and incentives are increasing all the time. I am bombarded by calls, texts and emails. Yesterday, a text from one of them was offering a discount that represented 5% off, upgrades and things like free flooring. And I assume it would be possible to negotiate more than that. All major housebuilders have posted significantly reduced sales and profits, shares dropping. But to be taken seriously I think you'd need to be sstc.

Why don't you market your own house first and see what you can make from that so you have a better idea of your budget.
Yes, you can definitely negotiate on a new build. As @donttellmehesalive says they've all been doing badly and interest/ reservations have dropped very significantly. I would do it by email though so they don't talk you up on the phone.

It was actually on the market around 7/8 months ago as we wanted to see how it would do as we planned to sell since then but weren't quite ready and we had quite a few offers very close to our asking price in the first week of it being on the market so I'm hoping we'd get similar offers now

7/8 months ago is a lifetime in the current climate. A lot has changed on the housing market since then. I would get your flat on ASAP and see what happens, you may be lucky and get a quick sale or it may stick around.

Yes that's very true we have estate agents coming this Saturday so hopefully it will be on the market next week. We tried to have the appointments sooner but most estate agents were booked up. Fingers crossed it gets sold quickly. I'm just wondering if the developers would be happy to wait 3 months for exchange?

You may find that they won't reduce the actual list price of the house but will offer a contribution towards the deposit or something similar. New build developers want to keep the 'sold' price of houses in a development pretty similar so often will find other ways to incentivise buyers. Definitely worth asking, especially if you can work out their end of quarter as there'll be extra impetus for them to get deals closed!

Probably easier to get extra internal fittings than negotiate the price down.

The thing with part exchange is that they definitely will price it below market value which would reduce our equity significantly so its not really an option.
The best option would be for them to accept a 5% off the asking price or 5% deposit contribution and be flexible enough to delay exchange until we've sold our house

An awful lot has changed on the last six months and it is now a lot harder for first time buyers to get credit. There are also a lot less people buying investment property right now as people are worried about a crash.

In my local area, may be different for you, there's lots of these sorts of flats come onto the market and they seem to be hanging around a lot longer than previously. I'd suggest having a bit of a look on Rightmove to see what your competition is and how long it's been on the market for.

As others have pointed out and you have pointed out in your OP, the market has changed considerably. It's interesting that you are hoping to get the same offers for your flat still despite being aware that the market has changed. You may be very lucky but it's much more likely that you will get less.
I agree with @SnackyOnassis that the developers will want their top line figures to look good even if they are really discounting prices. You can still negotiate or tell them what you are willing to pay.
I linked to this elsewhere. It might be useful or other videos or his.

I do understand that however I'm trying to be positive about it as the flat is in a considerably better condition to all the other flats on the market in our area- in fact we have redone all rooms to the point where it feels brand new. I also looked on Rightmove and there's flats selling for the same price as what we intend to sell at but that don't even compare to ours in terms of fixtures/fittings etc. A flat that is actually in our building sold 3 months ago for similar to what we are asking as well..

We just went to see the house Saturday. The estate agent called me this morning asking for feedback/discussion does that mean that they want a quick sale and I'm in a position to negotiate?

Go for it - what have you got to lose for trying? I've never managed to negotiate a price down on a new build but times are changing.

It is usual to call you for feedback and doesn't say anything about whether they are chasing a quick sale.

But I would definitely negotiate in the current market, as long as you are in a proceedable position.