Reduce Offer Or Not?

[ataraxa]

My final offer on a new build on a new development in Cornwall was £170000, made and accepted on June 20th.

Contracts are not yet exchanged, and the house going up rapidly - just had the roof slated. I guess exchange will be about two weeks away i.e. about two months after the deal was struck.

For various reasons I have to buy a house now, can't wait, and this one is better than most

You can guess where I'm going - reduce my offer or not? This is with a major developer, so no compunctions about gazundering the ordinary guys of this world.

I had squeezed them to reach the 170k, and that was a deal at their absolute limit. But, that was then..........what about now?

[buzzardo]

My final offer on a new build on a new development in Cornwall was £170000, made and accepted on June 20th.

Contracts are not yet exchanged, and the house going up rapidly - just had the roof slated. I guess exchange will be about two weeks away i.e. about two months after the deal was struck.

For various reasons I have to buy a house now, can't wait, and this one is better than most

You can guess where I'm going - reduce my offer or not? This is with a major developer, so no compunctions about gazundering the ordinary guys of this world.

I had squeezed them to reach the 170k, and that was a deal at their absolute limit. But, that was then..........what about now?

Hmmm, your fourth post, and probably the most asinine question we've had since.... well since the last time someone asked "should I buy a new build - oh and by the way should I vote for Gordon Brown next time, and do you really think it will make a difference if Badger announces a SDLT holiday in 2023???"

I'm tempted to shout AWOOGAH in very loud letters, but will hold off until I know a little more.....

Are you mad? What could possibly mean you have to buy now?

I have a nesting-mad wife, four kids, and a worringly extended family, and there's still nothing on God's earth that would tempt me to buy now. In the unlikely event I had a sudden commonsense bypass, and decided it was a good idea, then I sure as hell wouldn't be buying a newbuild.

And (OK, pushing it now, because it's inconceivable,) IF I was going to do that, then I'd absolutely gazunder the filthy profiteering b@stards by at least 50%, the day before exchange, without asking anyone else if it was a good idea....

I hope you'll prove my faith in human nature justified, but I'm not sure how you'll manage it...

B

[Nicholas Cage]

I can't imagine a situation where you cannot rent close to the location you are being forced to buy at gunpoint.

Offer a lower amount, say 30% off.

Edited August 9, 2008 by maxwell

[DementedTuna]

I had squeezed them to reach the 170k, and that was a deal at their absolute limit.

And you honestly believe that building the new place cost £170k, and that any less than that will see them making a loss? I recommend doing some research into local land values and build cost.

Offer £125k, blame stamp duty if they complain.

The place probably cost them around £80k to build, including the cost of land. Certainly no more than £100k. They can take it.

The average person offers 10% under asking price in the current market. £125k would only be a 25% BMV offer, relatively tame in comparison to the 40% drops that professional landlords are going for at auctions.

As a buyer, you can't afford to be non-agressive in a falling market, if you don't, negative equity WILL destroy your entire deposit.

Edited August 9, 2008 by DementedTuna

[keef]

In the unlikely event I had a sudden commonsense bypass, and decided it was a good idea, then I sure as hell wouldn't be buying a newbuild.

Serious question, why wouldn't you buy a new build, aren't there better offers to be had that way?

[yellerkat]

For various reasons I have to buy a house now, can't wait, and this one is better than most

I'm tempted to shout AWOOGAH in very loud letters, but will hold off until I know a little more.....

Are you mad? What could possibly mean you have to buy now?

AWOOGAH!

Well somebody had to. Goodnight Jimbob.

[ChumpusRex]

Serious question, why wouldn't you buy a new build, aren't there better offers to be had that way?

No.

Newbuilds carry, or have carried, a substantial premium over 2nd hand properties simply because they are new. There was, in a number, of 'bubble' areas a significant market for 'unused' flats - newbuild flats which had been bought be speculators, left empty for 1 or 2 years and then sold on - the idea being that by being unused, they would command a worthwhile premium which would offset the rental income with far less hassle.

Newbuilds are priced with the 'incentives' in mind. Essentially, the developer builds the plot with a target price in mind (which is intended to provide fair value + the newbuild premium), and then a 10-20% premium to take it up to the asking price. The idea is that they expect buyers to negotiate a little, but every now and then they get a sucker who will pay the full 'laughing price'. NOt only that, but there is a serious oversupply of new builds in a number of regions, and progressively reducing numbers of buyers; more discerning buyers are more prone to notice the problems with new build housing: small rooms, tiny gardens (if any at all), etc.

Evidence of price falls show that it is the new builds that have fallen fastest and furthest so far - as it was they that were most overpriced to start with. It was the same in the US - it got so bad, that mortgage lenders simply ended up pulling out of the newbuild market in those areas where the prices went totally unsustainable.

[Mr Nice]

Serious question, why wouldn't you buy a new build, aren't there better offers to be had that way?

for the same reason that it is usually cheaper to buy a car that is a year or two old rather than buying a brand new one.

once you actually move into that new house/flat the value immediately drops because it is now "used."

for many people, having a brand new house/car is worth paying extra, but financially you get about the same use/utility by buying second hand for a lot less.

[Paddles]

Has anyone seen a postcard from the Moderators yet?

I hope they are holidaying somewhere nice while the main forum fills up with "Should I buy now?" posts.

[Bloo Loo]

Has anyone seen a postcard from the Moderators yet?

I hope they are holidaying somewhere nice while the main forum fills up with "Should I buy now?" posts.

170K for a FTB is reasonable dontchaknow.

and its got slates.

Had me fooled.

If i was the OP, id even take the pencil from out of bottom and use it to sign the deal off.

Or got the whole hog and use a crayon.

[ataraxa]

Thanks for your replies DementedTuna, keef, maxwell, Mr Nice and ChumpusRex. They are welcomed and appreciated. Of course I don't have to buy in the broader sense - no one would die and the world would carry on. But, my circumstance are such that I will get a minimum of 8k a year for my lifetime if I buy something very, very soon (how or why not really relevant). Otherwise I won't.

This new build is cheaper than anything second-hand and comparable in my area, and the developer cannot back out after my £1000 reservation fee which I can get back during conveyancing anyway.

Unfortunately, buzzardo, yellerKat, Paddles and Bloo Loo just failed failed to read my post and decided that responses full of vitriole was the way to go, spouting well-trodden, simplistic amateur cliches in reply to a question they themselves invented and even quoted; I did not ask "should I buy....?" I asked "reduce my offer or not?", given that I had hammered the sellers already. The question was even in the headline, obvious enough I would have thought. Also, four posts? No. Find them - what did they say?

I really do fail to understand tunnel vision so narrow as to invent issues that do not exist - and with such anger. Are you so incensed and possessed by property prices that you turn blind, stop thinking and just get plain rude? Nothing useful or polite to say? Then keep quiet.

[Paddles]

Thanks for your replies DementedTuna, keef, maxwell, Mr Nice and ChumpusRex. They are welcomed and appreciated. Of course I don't have to buy in the broader sense - no one would die and the world would carry on. But, my circumstance are such that I will get a minimum of 8k a year for my lifetime if I buy something very, very soon (how or why not really relevant). Otherwise I won't.

This new build is cheaper than anything second-hand and comparable in my area, and the developer cannot back out after my £1000 reservation fee which I can get back during conveyancing anyway.

Unfortunately, buzzardo, yellerKat, Paddles and Bloo Loo just failed failed to read my post and decided that responses full of vitriole was the way to go, spouting well-trodden, simplistic amateur cliches in reply to a question they themselves invented and even quoted; I did not ask "should I buy....?" I asked "reduce my offer or not?", given that I had hammered the sellers already. The question was even in the headline, obvious enough I would have thought. Also, four posts? No. Find them - what did they say?

I really do fail to understand tunnel vision so narrow as to invent issues that do not exist - and with such anger. Are you so incensed and possessed by property prices that you turn blind, stop thinking and just get plain rude? Nothing useful or polite to say? Then keep quiet.

Sorry if I offended. No, seriously I am.

My advice is if you find that the money is burning a hole in your pocket so badly that you feel that you need to buy property this year is to pay no more than a similar property sold for in early 2002, because eventually it's going to be there again.

Edited August 10, 2008 by Paddles

[keef]

No. Newbuilds carry, or have carried, a substantial premium over 2nd hand properties simply because they are new <snip>

Interesting, thanks for your specific reply, Rex. It helps me plan my next move in 2009

[jac]

how much discount did you already get off it? i read before the mark up is 100% on these things so push them on that

if it's the LAST in the salesoffice then i've also heard they will slash prices to close that salesoffice

you've nothing to lose by going lower but you need to prove you're credible so they dont just think you're trying it on

do you need a mortgage or are you paying cash? if the former, you can say there's been some problems at that end

without knowing the original price, price of similar properties in the area in say 2002/03/04 and local rents we cant say if you have a bargain yet or not

good luck!

[symo]

time to gazunder at £130k if they don't accept screw em, pick it up at £85k in 4 years

[keef]

Thanks for your replies DementedTuna, keef, maxwell, Mr Nice and ChumpusRex. They are welcomed and appreciated. <snip>

Fair enough, ataraxa - if you really have to buy then bear this in mind. Actually bear this solely in mind. You are the person with the power here, they're gagging for a sale, if you're gonna buy then absolutely whittle them down to the bone. Even then you're gonna lose some money over the next few years so be a hard nailed negotiator, ffs.

K.

[Guest DissipatedYouthIsValuable]

I call Awooga.

Gazunder or preferably, pull out altogether.

That house is an expensive whore with bad AIDS.

[dances with sheeple]

Thanks for your replies DementedTuna, keef, maxwell, Mr Nice and ChumpusRex. They are welcomed and appreciated. Of course I don't have to buy in the broader sense - no one would die and the world would carry on. But, my circumstance are such that I will get a minimum of 8k a year for my lifetime if I buy something very, very soon (how or why not really relevant). Otherwise I won't.

This new build is cheaper than anything second-hand and comparable in my area, and the developer cannot back out after my £1000 reservation fee which I can get back during conveyancing anyway.

Unfortunately, buzzardo, yellerKat, Paddles and Bloo Loo just failed failed to read my post and decided that responses full of vitriole was the way to go, spouting well-trodden, simplistic amateur cliches in reply to a question they themselves invented and even quoted; I did not ask "should I buy....?" I asked "reduce my offer or not?", given that I had hammered the sellers already. The question was even in the headline, obvious enough I would have thought. Also, four posts? No. Find them - what did they say?

I really do fail to understand tunnel vision so narrow as to invent issues that do not exist - and with such anger. Are you so incensed and possessed by property prices that you turn blind, stop thinking and just get plain rude? Nothing useful or polite to say? Then keep quiet.

So you are in some sort of inheritance with clauses situation? By buying now you will throw away (you might as well just give it to a beggar in the street, it would be more worthy than giving it to developers) at the very least 10 years of your lifetime income, straight off the bat, before you even start. At the very very least 80k, probably a lot more. If you must, offer them 90k, on the table for a year, and let them see how business develops.

[dances with sheeple]

how much discount did you already get off it? i read before the mark up is 100% on these things so push them on that

if it's the LAST in the salesoffice then i've also heard they will slash prices to close that salesoffice

you've nothing to lose by going lower but you need to prove you're credible so they dont just think you're trying it on

do you need a mortgage or are you paying cash? if the former, you can say there's been some problems at that end

without knowing the original price, price of similar properties in the area in say 2002/03/04 and local rents we cant say if you have a bargain yet or not

good luck!

They wish.

[huw]

time to gazunder at £130k if they don't accept screw em, pick it up at £85k in 4 years

Which means saving 85k at the cost of losing an income of 8k (min) a year forever -- how much would the OP have to spend to buy such an annuity? It depends on how hold he/she is, but rather more than the maximum possible loss on this house, I would have thought.

I'd still try reducing my offer though and keep hunting for a cheaper/better alternative.

[AndrewP]

Reduce your offer.

If they accept, then you're quids in.

If they refuse then you have the choice of going with the original price or walking away.

Difficult to lose.

[Bloo Loo]

Standard Troll replies troll boy

I didnt see any agression, but trolls always do.

see you soon under a new name.

Byeeee

[Killer Bunny]

My final offer on a new build on a new development in Cornwall was £170000, made and accepted on June 20th.

Contracts are not yet exchanged, and the house going up rapidly - just had the roof slated. I guess exchange will be about two weeks away i.e. about two months after the deal was struck.

For various reasons I have to buy a house now, can't wait, and this one is better than most

You can guess where I'm going - reduce my offer or not? This is with a major developer, so no compunctions about gazundering the ordinary guys of this world.

I had squeezed them to reach the 170k, and that was a deal at their absolute limit. But, that was then..........what about now?

Take 10k off. The take a further 10k off 2 days before exchange. Do you seriously have to buy it? of course not!

[Elizabeth]

I am really surprised these guys are building without a contract. How does that work?

[lets get it right]

Where is the house? Big estate? Small development? Pretty place? Or back end of St. Austell?

Have they a reasonable expectation of selling it to someone else if you back out?

When down in Cornwall a few weeks ago I did a quick recce of the local market (Padstow and to the west of Padstow almost to Newquay) and, as far as I can see, very little is selling but still mega money for most places.

The new build apartment situation in Newquay and its surrounds is amusing. They have been building them like there was no tomorrow over the last few years. Lots of finished ones are standing empty (special offer on this one apartment - just this week - you'd think they were selling bloody cars instead of 300k apartments). And the number of derelict hotels with metal fencing outside just waiting their turn to be demolished and turned into apartments.

The boom looks like turning Newquay into a ghetto for the next 10 years - and it was a dump to start with.