David Wilson Reductions (anecdotal)

[simon813]

A couple I know are in the process of buying a new David Wilson home (5 bed, 3 story, on established development in Hull). The original advertised price was £375k. With haggling and a few deals thrown in they got it down to around £320k and signed on the dotted line.

They had two houses to sell due to previous seperation. One sold immediately for asking price but the other has stuck around. They knocked £10k off (£160k) but still no interest.

Yesterday they get a call from the estate agent saying that nothing is moving and if they want to sell they should seriously reduce the asking price.

Off they went to David Wilson who said that they would approach the area manager to knock a further £40k off the price of the new house! Just like that!

So that brings the house originally advertised at £375k down to £280k!

If it gets approved they will knock £20k off the one they are selling (even though they think it is "worth" more!) and probably sell it straight away.

So the big home builders are obviously very worried about losing buyers and estate agents are trying to get sellers to come to terms with the new world we live in!

Si

[Tiger Woods?]

A couple I know are in the process of buying a new David Wilson home (5 bed, 3 story, on established development in Hull). The original advertised price was £375k. With haggling and a few deals thrown in they got it down to around £320k and signed on the dotted line.

They had two houses to sell due to previous seperation. One sold immediately for asking price but the other has stuck around. They knocked £10k off (£160k) but still no interest.

Yesterday they get a call from the estate agent saying that nothing is moving and if they want to sell they should seriously reduce the asking price.

Off they went to David Wilson who said that they would approach the area manager to knock a further £40k off the price of the new house! Just like that!

So that brings the house originally advertised at £375k down to £280k!

If it gets approved they will knock £20k off the one they are selling (even though they think it is "worth" more!) and probably sell it straight away.

So the big home builders are obviously very worried about losing buyers and estate agents are trying to get sellers to come to terms with the new world we live in!

Si

Very interesting anecdote...that is a significant reduction.

[stevebrowne]

same type of houses by them in Telford. Started at £499k , some are now at £399k. That's £100k off peak asking price!

[Paddles]

Great anecdote, this.

Just as we predicted; the big drops in price will be led by the developers and they are the real "distressed sellers".

[Quoth]

And there I was thinking my friends got a good discount of £50,000 off a £370,000 Barratt's house!

I wouldn't mind going to my local Barratt's development and making a really cheeky offer and seeing what they say. Their year-end is approaching and I'm sure they would be keen to get as much cash through the door as possible.

Regards,

Q

[The Conveyancer]

And there I was thinking my friends got a good discount of £50,000 off a £370,000 Barratt's house!

I wouldn't mind going to my local Barratt's development and making a really cheeky offer and seeing what they say. Their year-end is approaching and I'm sure they would be keen to get as much cash through the door as possible.

Regards,

Q

If you find out when the year end is for each developer and approach them in the first week of that month, they will give you just about anything if you promise to complete by the end of the month.

[Guest KingCharles1st]

Whats the legal position to someonr buying a house on a new estate- and then having the developers go tits up after say three or four are sold?

Who would be resposible for finishing/snagging/tidying/servicing those first three or four shiny newbuilds on an otherwise desolate buildscape?

[stevebrowne]

NHBC might cover some things I suppose. Most new houses come with it - a 10 year guarantee on certain aspects.

[The Conveyancer]

Whats the legal position to someonr buying a house on a new estate- and then having the developers go tits up after say three or four are sold?

Who would be resposible for finishing/snagging/tidying/servicing those first three or four shiny newbuilds on an otherwise desolate buildscape?

NHBC you would have thought.

[George Abdgwengo]

NHBC might cover some things I suppose. Most new houses come with it - a 10 year guarantee on certain aspects.

After watching New Homes from Hell on ITV a few weeks back NHBC seem about as effective as the FSA

[Mikhail Liebenstein]

Great anecdote, this.

Just as we predicted; the big drops in price will be led by the developers and they are the real "distressed sellers".

The really shocking bit is how big some of the mark ups on news builds are.

If a developer can afford to knock that much off so quickly with just the authority of an area manager, that is probably just the start of what is possible. Most companies will operate a structured discount signing off process requiring different levels of management sign off based on the discount If an area manager can offer a further £20k off, then I am sure a regional manager or sales director and then finance director can offer evenmore reduction. Ultimately they won't sell below cost, unless forced to liquidate, but if they need the cash they might well go to cost.

[bobthe~]

The really shocking bit is how big some of the mark ups on news builds are.

If a developer can afford to knock that much off so quickly with just the authority of an area manager, that is probably just the start of what is possible. Most companies will operate a structured discount signing off process requiring different levels of management sign off based on the discount If an area manager can offer a further £20k off, then I am sure a regional manager or sales director and then finance director can offer evenmore reduction. Ultimately they won't sell below cost, unless forced to liquidate, but if they need the cash they might well go to cost.

Hi Mike,

If you need to sell something though to avoid your company going under, they might go below cost if they know that prices could soon go below that point.

cost will include what they paid for the land, and they have been paying ever increasing amounts for land: those prices will be going down quite a bit if land companies and the big builders are forced sellers.

I agree that they will be unlikely to do it, because we are probably not quite at that point yet.

Edited May 3, 2008 by bobthe~

[simon813]

I found out a little bit more about this over the weekend.

They initially went to visit the agent who is marketing their property who said that they usually complete 15 sales pcm. Last month they did 3 and 1 of those has since fallen through!

As for the new house, it was the lady in the sales office who suggested they drop their offer by £40k!!

Si