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Buying a nearly new house


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Anybody bought/bid on a nearly new house? What was your experience?

Went to view one recently. They bought it brand new 14 months ago, done nothing to it. Selling due to divorce. I offered approximately 102% of their original purchase price. Rejected. They're wanting a 15% uplift on the price they paid 14 months ago! This asking price is 10% more than anyone on the estate has ever paid.

Do new builds go down in price initially? My experience is they do, albeit not this one.

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4 hours ago, Drummer said:

They're wanting a 15% uplift on the price they paid 14 months ago!

So they're wanting somebody else to pay for their divorce? I hope their rabbit hutch sells for 85%, and their divorce battle is bitter. 

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4 hours ago, Drummer said:

Anybody bought/bid on a nearly new house? What was your experience?

Went to view one recently. They bought it brand new 14 months ago, done nothing to it. Selling due to divorce. I offered approximately 102% of their original purchase price. Rejected. They're wanting a 15% uplift on the price they paid 14 months ago! This asking price is 10% more than anyone on the estate has ever paid.

Do new builds go down in price initially? My experience is they do, albeit not this one.

Now show power by officially withdrawing your 1st offer citing Brexit and then dropping your offer in writing to 100% of their price paid and walk away and wait. The key to buying distressed house sales is be prepared to walk away. If they come back in a few months to accept your offer then drop it by 5% and see what happens. 
 

 

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The traditional theory is that there is a ''new build premium'' and that new builds initially lose value for a few years after purchase until HPI catches up... but in this market in my areas I'm seeing plenty of nearly new houses coming back on only 1-2 years after initial purchase for substantial ''uplifts'' in value, anywhere from 15-30% more than the new build price.

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6 hours ago, Drummer said:

Anybody bought/bid on a nearly new house? What was your experience?

Went to view one recently. They bought it brand new 14 months ago, done nothing to it. Selling due to divorce. I offered approximately 102% of their original purchase price. Rejected. They're wanting a 15% uplift on the price they paid 14 months ago! This asking price is 10% more than anyone on the estate has ever paid.

Do new builds go down in price initially? My experience is they do, albeit not this one.

You need to make them aware that as the first owners of the house they were able to receive HTB which was the builders bonus.

They are now selling it as second hand and need to accept that that 20% premium has gone and they are in fact going to be nursing a large loss out of the gate.

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I can’t factor in what other rises or falls have occurred in your area so I will assume for now that prices have been stable or risen with inflation. 
When they bought the house the carpets, toilets, kitchen, electrics, plumber were all untouched and brand new. They paid a ‘significant‘ premium for what is likely to be a substandard footprint and build quality to a house built 60 years ago...because it was brand spanking new. The marketing show house was brilliant, maybe some incentives with choices of paint, tiles, worktops. 

I genuinely would expect a ‘significant’ fall under these circumstances. I had seen new builds which haven’t risen AT ALL over 10 years whereas houses around them have perhaps increased 50/60%. 
New builds are notoriously comparatively ‘bad buys’ and now you are being offered one at an even worse price...and it’s not even new anymore. 

A divorce...and if it’s bitter then one wants the full price and the other just wants to sell. 
Genuinely I would be very very wary. Look at something older with the same space and compare and contrast. 
of course it does depend on the area and if prices have risen 20% last year and the market is strong it ‘might’ be fine but I think potentially this could be a really poor purchase. 

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1 hour ago, Boo Hoo May said:

Walk - you’re sponsoring him or her for getting their leg over.  You’re picking up the tab.

This. They sound unreasonable, greedy and self-entitled.. obviously I don't know the specifics but given the market in my area and the general consensus that new builds are always over-priced (and even moreso thanks to HTB) I'd have considered 85-90% of what they paid to be a more realistic starting point from your perspective; especially since it's potentially a "distressed" sale.

From what you've said IMO any pursuit of this property would be flogging the proverbial dead horse and that these "individuals" would be best left to tear each other to pieces in a house they "can't" (won't) sell.

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10 hours ago, Drummer said:

Do new builds go down in price initially? My experience is they do, albeit not this one.

Logically they ought to be a bit lower - firstly the initial buyer is getting everything brand new, you're getting it NEARLY new, and the initial buyer gets to often choose some details, such as colour of carpets etc, that you are now stuck with.

6 hours ago, markyh said:

Now show power by officially withdrawing your 1st offer citing Brexit and then dropping your offer in writing to 100% of their price paid and walk away and wait. The key to buying distressed house sales is be prepared to walk away. If they come back in a few months to accept your offer then drop it by 5% and see what happens. 

I understand where markyh's hardball negotiating tactics are coming from, but in my view buying a house is stressful enough as it is without playing games.  I would simply:

- decide how much I'm prepared to pay for a house

- offer a bit less than that

- if refused, increase the offer to my actual maximum

- if that's refused just move on

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49 minutes ago, scottbeard said:

I understand where markyh's hardball negotiating tactics are coming from, but in my view buying a house is stressful enough as it is without playing games.  I would simply:

- decide how much I'm prepared to pay for a house

- offer a bit less than that

- if refused, increase the offer to my actual maximum

- if that's refused just move on

I could not agree more. Buyers seem to pay less of a new build premium  these days as lenders valuers are wary.  I am sure many here will disagree with that but never mind.  I am not saying there is no new build premium just that is not as pronounced as it may have been.  

The questions are:

 do you want to live in the house or not?

Is it a home for you and your family or  financial investment?

7 hours ago, Orb said:

So they're wanting somebody else to pay for their divorce? I hope their rabbit hutch sells for 85%, and their divorce battle is bitter. 

what a lovely attitude to life

it must be wonderful to go through life with so much bile and hate for people you do not even know 

i guess you hate everyone who has ever bought a house 

I feel really sorry for anyone who has that attitude and who has go to through life like that

 

 

 

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I would use Markyh tactics for sure. IMO it is them playing hardball. Even if the house was only 250k new they now want 37k more than they paid for it in a falling market.  It’s a second hand new build ffs. They think their house has gone up 3k a month. Assuming the house is 250k of course. 
 

I would pull my offer, if they come back I ask for a further 15% reduction out of principle.  

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New build prices are supported by HTB so comparable second hand stock will be priced lower (everything else being equal).  If the market is hot and existing stock prices increasing dramatically then this rising tide may result in HPI for new builds but i would be surprised if this is the case in the current static or falling market. 

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57 minutes ago, mallish said:

I feel really sorry for anyone who has that attitude and who has go to through life like that

Do you think you could be more patronising?

I'm with Orb on this.  It has NOTHING to do with home ownership or bitterness, but some low life potentially trying to do what got them into this position, to the OP's back passage.

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15 hours ago, Drummer said:

Anybody bought/bid on a nearly new house? What was your experience?

Went to view one recently. They bought it brand new 14 months ago, done nothing to it. Selling due to divorce. I offered approximately 102% of their original purchase price. Rejected. They're wanting a 15% uplift on the price they paid 14 months ago! This asking price is 10% more than anyone on the estate has ever paid.

Do new builds go down in price initially? My experience is they do, albeit not this one.

We've rented a couple of nearly new houses now and the build quality has been shocking. I joined the Facebook pages of some areas we looked to buy in and from these it is clear how many problems their are. Windows are going in one set of houses, cracked tiles in others and a new question mark over the rotting cladding. 

I've written before about the glut of 4BR homes there are in some new developments (Bucks and Beds) that simply don't sell and keep coming on and off the market. Identical houses in streets of other identical houses. One sells every 6 months or so at a silly price and another 4 remain unsold.  I'd not buy one of these.

I'd approach buying a new build in the same way as the older houses but only after checking that there are no known build problems in the development and no similar houses on sale or been sold prematurely. Problems can also be with the adoption of the streets by the local council and upkeep of the estate.

Around me I can see certain streets where the houses are on sale regularly and others with nothing ever to resell. Usually there is a reason. We have had problems in certain streets with antisocial behaviour.

Is this new build one of many exactly the same and how many others are on sale or have been for sale?  It may be more than "just" a divorce. 

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1 hour ago, Boo Hoo May said:

Do you think you could be more patronising?

I'm with Orb on this.  It has NOTHING to do with home ownership or bitterness, but some low life potentially trying to do what got them into this position, to the OP's back passage.

Not at all patronising I genuinely feel sorry for any one who is so angry and bitter at a total stranger who they have never ever met and has done nothing to cause them any personal harm.  I honestly and genuinely feel sorry for people who go through life like that.  Just a personal opinion to which I am entitled. 

As for saying they are low life again you know nothing about them or what they are like as people.

You seem to have a vehement dislike because they bought a house.  No problem if that is how you go through life that is up to you.  No problem to me.

The thing with people who get angry and are full of hate is that it only affects them - it has no effect on the object of their ire who do not know they exist and do not care what a stranger thinks of them.

All the best to you.

 

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8 minutes ago, goldbug9999 said:

I wouldn't touch anything built in the last 30 years certainly not anything by one of the big builders.

Short sighted advice I think. Having experience of buying 2 houses built in 2009, one new in 2009 built by Taylor Wimpey, one second hand in 2016 built by a medium sized Midlands builder, both brick and block, and both excellent in build quality and insulation. 

Trust me if they ban gas (and therefore wood too, to be fair to everyone) to heat homes because of climate change, my 2009 is so efficient of heating I could easily use a GCHP to minimise leccy costs. 

I wouldn't want the heating leccy bills of any house not built in the last 10 years. You would be looking at £200 pcm just for leccy heating in Winter for a family home, and I have experience of this having to until recently pay the leccy only bill of a elderly in laws 2 bed bungalow. that cost £100 pcm to heat in the last 2 winters.

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In the avoidance of any doubt on my previous post....in the absence of any huge price rises in the area...I would avoid this house like the plague. 
 

In a static market (In the past) I have bought an 18 month house for 68% of original purchase price. And I was pushed up to that amount. 
 

You rarely get a deal on the dream farm cottage at the top of the road that was the first house built in the area and is very individual.
 

These are built in there thousands and if you miss this one I guarantee another will come along. No rush in this environment. 
 

Find a motivated seller...divorces can be great ‘buys’ but it normally takes 2 or 3 years of marketing before they decide to panic and then sell. (Normally when the one who has been ‘wronged’ and didn’t want to sell...meets someone else and desperately wants to sell and buy a new place with new partner?)...no judgement on them, just happens to be a common theme in house sales from divorcees. 

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Thank you for the replies so far. I thought it was a fairly generous offer and the consensus on here is that it probably was.

Just to add to original post; it's only been on the market for 2 weeks, so it seems vendors are still happy to be kite flying. The area I'm in sees some proper junk being sold for £200-250k but it looks difficult to sell anything over £300k. Its noticeable how long properties over £300k stick around on rightmove then just disappear unsold.

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1 hour ago, Drummer said:

Thank you for the replies so far. I thought it was a fairly generous offer and the consensus on here is that it probably was.

Just to add to original post; it's only been on the market for 2 weeks, so it seems vendors are still happy to be kite flying. The area I'm in sees some proper junk being sold for £200-250k but it looks difficult to sell anything over £300k. Its noticeable how long properties over £300k stick around on rightmove then just disappear unsold.

Yes, to generous.  Hold tight, if it is still for sale in January go in deep on them.

 

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Being a new house It’s probably worth it’s original purchase price minus the government props at the time for new houses (which no longer apply to second hand) something like 20% less, maybe factor is some inflation and maybe only 5-10% less. Certainly not more. 

the real issue is that they probably will have to take a loss. and they either don’t want to, or can’t ‘afford to’ (can’t stomach admitting their stupidness of buying a new build!) 

your offer was more than fair probably overpaying slightly, I guess you have to ask yourself are you willing to overpay to secure the house? Seeing that overpayment as thrown away money? You would be bailing them out, depends if you can make peace with that. 

I *cringe* overpaid for my house, but it was in an ideal location and I can happily live the rest of my life here. The overpayment felt like a bit of a bribe to the owners, but 12 months later and that extra amount paid has now been paid off. Plus I had ‘free money’ from the help to buy ISA anyway. Now a 16 year mortgage left. Which I could clear in 8 years (before I’m even 40). 

I have done enough renovations and DIY to offset the fall in value since buying it at least for now! But I do take joy in DIY, but it’s been very much a second unpaid job. 

but in addition the business cycle is suddenly looking much older than it did 12 months ago (the peak in the housing market), world is rolling over into recession, having seen it first hand, we are 12 months offs seeing the effects in every industry.

wont be the roaring 20’s again, unless then just leave the printing presses on and go home and turn the lights off and throw away the key. 

I wouldn’t buy a new build. 

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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