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w0051977

House Prices - Apartments

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I am thinking about buying a new apartment, which is not yet built. I have read that new owners usually pay a premium, so the value of their home usually falls after they move in (please see this article: http://www.bbc.co.uk/news/business-17338787). My question is: how do you come up with a fair offer for a new apartment?

There is no information yet on Zoopla (even though some apartments in the block were sold one-two months ago).

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I am thinking about buying a new apartment, which is not yet built. I have read that new owners usually pay a premium, so the value of their home usually falls after they move in (please see this article: http://www.bbc.co.uk/news/business-17338787). My question is: how do you come up with a fair offer for a new apartment?

There is no information yet on Zoopla (even though some apartments in the block were sold one-two months ago).

You have to speculate on the percentage increase or decrease in property values between now and when the building is completed. Then you have to factor in the risk of an unexpectedly large fall in values that would otherwise wipe you out. Also you have to factor in the risk that the situation will change a lot e.g. the developer goes bust or simply does not complete the building, or the developer sells all the other apartments to slumlords. Then you factor in the risk that your mortgage lender will have tightened up their lending conditions a lot by the time the balance is due. Then you walk away thinking "what kind of idiot falls for these scams?"

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Are you saying that you would not buy a new apartment that is not finished?

I have no intention of buying any kind of building for some time. (anyway I think the concept of "owning" a flat is kind of amusing, seeing as it is just part of a building and not in any sens a standalone object).

However, don't mind me, you do whatever you think is best and in your own best interests. Just make sure you understand the risks and the systems and mechanisms that organise and deliver those risks.

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I would research "ghost estates" and problems with new developments not being completed or built to a satisfactory standard before setting your heart and economic earning power on a new build.

http://www.irishexaminer.com/ireland/irelands-ghost-estate-nightmare-227088.html

http://www.northamptonchron.co.uk/news/politics/resident-asks-prince-charles-for-eco-homes-help-1-5014989

If your still keen then research when the developers year end is - you might find their keener to deal at certain times of the year.

Remember you could also negotiate on fixtures and fitting as well as price.

Offer low - unless your totally embarrassed at the price you've offered then its not low enough.

NB: Prices will fall. Buyer Beware

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buying an off plan apartment....where should we send the men with the white coats round to?

You mean the plasters to complete the work - two years after you moved in!

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I would research "ghost estates" and problems with new developments not being completed or built to a satisfactory standard before setting your heart and economic earning power on a new build.

http://www.irishexaminer.com/ireland/irelands-ghost-estate-nightmare-227088.html

http://www.northamptonchron.co.uk/news/politics/resident-asks-prince-charles-for-eco-homes-help-1-5014989

If your still keen then research when the developers year end is - you might find their keener to deal at certain times of the year.

Remember you could also negotiate on fixtures and fitting as well as price.

Offer low - unless your totally embarrassed at the price you've offered then its not low enough.

NB: Prices will fall. Buyer Beware

I am interested in your last comment: "Prices will fall. Buyer Beware". This statement seems to be supported by this website: http://www.channel4.com/4homes/buy-sell/buying-property/buying-advice/new-builds-should-you-buy-a-new-build-09-11-11 i.e. "there is obviously a premium because you are the first to own the property". Could you explain why this is the case? I realize that cars depreciate more in their early years but I didn't think this applied to houses.

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I am interested in your last comment: "Prices will fall. Buyer Beware". This statement seems to be supported by this website: http://www.channel4.com/4homes/buy-sell/buying-property/buying-advice/new-builds-should-you-buy-a-new-build-09-11-11 i.e. "there is obviously a premium because you are the first to own the property". Could you explain why this is the case? I realize that cars depreciate more in their early years but I didn't think this applied to houses.

I'm not sure "depreciation" is the main factor here.

Here's a mental excercise for you. Ignore everything you know about that actual prices of houses flats and other property. Just think about income and expenditure of ordinary people. Now how much do you think is a reasonable price for a small flat in a tower block?

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I'm not sure "depreciation" is the main factor here.

Here's a mental excercise for you. Ignore everything you know about that actual prices of houses flats and other property. Just think about income and expenditure of ordinary people. Now how much do you think is a reasonable price for a small flat in a tower block?

Thanks. I am thinking about buying one of these apartments but they seem pricey: http://www.lindenhomes.co.uk/developments/lincolnshire/oasis-lincoln. I have no idea how to arrive at an offer as there is no information on Zoopla about previous sold prices.

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