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Buy Advice For New Dwelling (Builders Still Working At Site)?

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Hello everyone,

I am interested in a property that is still under construction in a site north of Watford.

Walls, roof and windows are in place; I cannot see what is the state of completion inside.

The site is owned by a developer; a local estate agent has been appointed to market the property.

I contacted the estate agent and they said that plans are not yet available; they will start viewing in few weeks.

The agent said they are thinking the property "will be around £ 650K".

Is anyone familiar with this type of buy?

Few questions I have in mind:

1. How should I figure out the right price? There are new build in the area so no comparable at all I can work on. I have calculated the floor area by counting the number of bricks.. so I have quite a good idea of the dimensions

2. Is there a premium I should price in for the new dwelling?

3. Is there a discount I should ask for the disruption / risk of working site not finished / of build quality (the developer is a tiny local company, I am not sure about the quality of build)

4. Is there any way I could ask for discounts to complete some of the construction myself (e.g. painting, flooring, carpeting etc.). Is this a risky option?

5. What about planning permission? Is there any "certificate" required by the local authorities prior to enter and live in the property?

6. Could you offer any tip regarding making a successful bid? For example I asked the agent to view the property as I wanted to make an offer, but they said I have to wait for their set dates.. Should I try to press the agent perhaps asking an appointment with their mortgage advisor?

Thank you for any reply/comment.

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1. How should I figure out the right price? There are new build in the area so no comparable at all I can work on. I have calculated the floor area by counting the number of bricks.. so I have quite a good idea of the dimensions

The right price, is the price you are willing to pay. Yes hindsight is a wonderful thing and you may look back and say 'geez I overpaid there' or 'man, I got a bargain'. I, or anyone on this site, can't tell you what price you should pay!

2. Is there a premium I should price in for the new dwelling?

Yes there will be. Generally developers pick this premium out of the air, so I will do the same and say 10%.

3. Is there a discount I should ask for the disruption / risk of working site not finished / of build quality (the developer is a tiny local company, I am not sure about the quality of build)

Unlikely, if you are not comfortable with the developer or doubt their build quality perhaps should be looking elsewhere.

4. Is there any way I could ask for discounts to complete some of the construction myself (e.g. painting, flooring, carpeting etc.). Is this a risky option?

This may be possible but will be on a developer by developer basis. Anyway, It may be worth asking if they can finish the house to your decorating preferences, especially if it is at no extra cost!

5. What about planning permission? Is there any "certificate" required by the local authorities prior to enter and live in the property?

I would imagine this is already been taken care off....... if not then see answer to Q3.

6. Could you offer any tip regarding making a successful bid? For example I asked the agent to view the property as I wanted to make an offer, but they said I have to wait for their set dates.. Should I try to press the agent perhaps asking an appointment with their mortgage advisor?

The problem is at the moment is you don't have a price! I think you should just register your interest and wait for them to get back to you on price and options such as you asked in Q4.

Edited by renting til I die

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I would hurry though. It might slip through your fingers.

Exactly! But not sure how?

I have already visited the EA and said I am interested F2F, but visits will start only in few weeks (I guess it's for HSSE reasons at the site?).

I read that for new-builds buyers "reserve the home" ; this process is in lieu of "making an offer". Afterwards the perspective buyers has few weeks to complete the buy and exchange contracts.

If the buyer fails to do so in time, the house goes back to the market.

I was wondering what could be he EA strategy be and figured out some scenarios:

1. The EA start viewings few weeks before the 100% completion of build. They give a guide price. Buyers are invited to bid just after the 100% completion. In this case price may go above the guide price but may loose out buyers that want to buy before the 100% completion.

In this case I will have to cue up and enter the bidding war; I waste time and forgo other opportunities currently in the market

2. As above, but EA accepts reservation before completion. In this case I put my offer / confirm the EA price and I have to speedily proceed with legalities and layer to complete the buy and exchange contract. However house will not be completed 100% by the time of contract exchange. Will I struggle to get any mortgage since the property is not 100% completed?

3. Other I have no idea...

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I think that the scenarios you are describing are the process when buying a new home through the building company. Certainly 1 & 2 sound like the ones described to us when we looked at new builds several years ago. The EA could do anything.

The right price. Find similar properties in the area as a rough guide that you can track. When we looked at new builds we found properties of roughly the same type for sale and then when they were sold the actual sales price on the Land registry website.

If you don't have enough time to do that search for properties sold on websites and then try to find them on the Landregistry website. Properties were often on websites for months (and you should search for the sold ones).

Check the Land registry website and see if prices are going up or down for that sort of property in your area.

As the developer has appointed an estate agent your chances of negotiating a lower price for doing some of the work is pretty low. You would be better off approaching the developer direct and trying to negotiate with them.

Contact the local council and finding the planning application for the new build. That may answer some questions.

Try and find other properties built by the same company and then go to these homes and talk to the owners. Talk to the council planners direct. They usually know the secrets.

My advice would be to proceed with caution and not be too keen. You are just "interested" and there are pretty of properties north of Watford to look at.

Don't see the agents mortgage adviser. Their job is to work out the largest mortgage that any bank will lend and then pass that info onto the EA. That becomes the "price".

Edited by Flopsy

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I think that the scenarios you are describing are the process when buying a new home through the building company. Certainly 1 & 2 sound like the ones described to us when we looked at new builds several years ago. The EA could do anything.

The right price. Find similar properties in the area as a rough guide that you can track. When we looked at new builds we found properties of roughly the same type for sale and then when they were sold the actual sales price on the Land registry website.

If you don't have enough time to do that search for properties sold on websites and then try to find them on the Landregistry website. Properties were often on websites for months (and you should search for the sold ones).

Check the Land registry website and see if prices are going up or down for that sort of property in your area.

As the developer has appointed an estate agent your chances of negotiating a lower price for doing some of the work is pretty low. You would be better off approaching the developer direct and trying to negotiate with them.

Contact the local council and finding the planning application for the new build. That may answer some questions.

Try and find other properties built by the same company and then go to these homes and talk to the owners. Talk to the council planners direct. They usually know the secrets.

My advice would be to proceed with caution and not be too keen. You are just "interested" and there are pretty of properties north of Watford to look at.

Don't see the agents mortgage adviser. Their job is to work out the largest mortgage that any bank will lend and then pass that info onto the EA. That becomes the "price".

Flopsy thank you very much for your advice.

I will try to get as much information I can regarding the builder.

We managed to get the information we needed about the property and we would like to make an offer before the crowd.

So, I hate saying it, but I am thinking to offer the asking price. I will not offer one cent more (I have another "easier" property I am interested on).

If the offer get accepted, I would have a big issue to sort out:

Problem:

-If our offer is accepted, "a down payment of £ 5K will be required" to us. If we pull out we loose 5K. Now, there are few weeks from completion (flooring to be made painting boiler, etc); what if the build does get not completed at all or not completed to quality? There is no spec, there is no showroom, so no documents to check if the "final product" is according to agreed standard.

If another buyer comes along with an higher offer (this may well hapenn because we cannot exchange contract until the construction is finished?), the builder may pull out, give us back the 5K. We then would have wasted the opportunity of the other property.

So I was thinking to add a condition to our offer that in the event the owner pulls out, he give us 5K but apparently this is not doable in England?

Kind Regards

I

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I'm sorry that I don't know the answer. Does the builder or developer belong to any trade body or association? They should hopefully be able to help.

Can see it would be a huge problem buying or committing to buy before seeing the finished product.

There is the 10 year guarantee but experiences seen to be mixed on that.

Can you get a mortgage for £650k as that seems a lot of money out of London?

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I'm sorry that I don't know the answer. Does the builder or developer belong to any trade body or association? They should hopefully be able to help.

Can see it would be a huge problem buying or committing to buy before seeing the finished product.

There is the 10 year guarantee but experiences seen to be mixed on that.

Can you get a mortgage for £650k as that seems a lot of money out of London?

I have an agreement in principle; I guess the mortgage company would require 100% completion before the mortgage is granted...

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