Negotiate Yourself a New-Build Bargain!
It's easily done – you're out looking for your next property, you drive by a new development and decide to go in, just for a quick look and to see how they've decorated the showhome. Next minute, any thoughts of buying the Victorian semi that needs a bit of work are replaced with the idea of buying something brand new where the only DIY that's required is putting your pictures up and hanging your curtains.
These days there are more benefits than ever to buying new-build properties, particularly as new techniques and materials mean that they are on average four times more energy efficient than second hand homes. However, in most cases you do pay for the privilege as they tend to be priced slightly higher than a like-for-like, older property in the same area. That's because you are paying a premium for a new home, in much the same way that you pay a premium for a brand new car.
However, if you're clued-up, do your homework and are a good negotiator, you can get a good deal. Here's how:
Timing is crucial
Want to shave thousands of pounds off the purchase price of a new property? Simply check with Companies House and find out the financial year end of the builder you're potentially buying from. Chances are, if it's mid- to late March now and the developer's year end is the 31st March, then you will be able to negotiate the price down. Why? Well, corporate homebuilders work on the theory of high volume, low margin. Whilst a discount of £25,000 may seem like a lot of money to you, rest assured, in the grand scheme of things it's not a great amount to a multi-million pound corporate organisation that needs to shift as many properties as possible to ensure the figures look great for the year. So, if you're happy to wrangle, throwing into the conversation with the Sales Advisor that you know their year end is approaching and that you think your offer is reasonable given the circumstances can be a very effective way of quickly knocking a few grand off the cost of your dream property.
Be A Quick Mover
The second way of securing a decent discount on a new property is either to be a first time buyer or to be 'non-move dependent', which is homebuilder speak for having no property to sell prior to purchasing another one. Either way, you're a hot prospect and, seeing as you don't have anything to sell, can therefore exchange and complete within the homebuilder's ideal timeframe of 28 days. If you fall into this category, the Sales Advisor should be particularly receptive to your negotiating the price downwards. It's also useful to bear in mind that if you are competing against another party for a property and you are either a first time buyer or 'non-move' dependent, your offer would be much more preferable to the homebuilder than the other party who have a property to sell, which will inevitably be part of a chain. If you are in the lucky position of not having anything to sell, make sure that you mention this early on in the conversation with the Sales Advisor for the development – it could prove to be a useful tool in later negotiations.
Be Patient...
If you can hold your nerve, another great way of getting a generous discount is to wait until the majority of the development has been sold and only one or two units are left. At this point it's normally un-economical for the developer to keep a showhome open as it's expensive in terms of continually marketing the development and paying the sales staff to sit there. They'd much prefer to push their resources to a new development which needs to be launched, rather than mopping up the last couple of deals in an existing scheme. What does this mean for you? Well, waiting until last means that developers will be wanting to ship the property quickly to meet targets and maintain income, which means that they are generally quite open to doing a deal. It may be that you don't get your first choice of property, but on the other hand, if you've saved thousands of pounds, that's not too much of a problem, is it?
Money For Nothing!
Stamp Duty is generally an expensive and non-negotiable additional expense. However, when you're buying a new property, sometimes you can convince the homebuilder to pick up the tab – definitely a plus point when it comes to working out the finances. Some companies don't pay the Stamp Duty on a property, but do offer a 'Cashback' alternative, whereby on completion you receive a cheque from the developer for a pre-agreed amount. You are then free to use this cash however you wish – paying for new furniture, carpets and curtains, for example. Also ask about Assisted Mortgage Payments – some of the biggest homebuilders have links with mortgage lenders, and can not only help you to arrange a mortgage at a preferential rate of interest, but as an added bonus will contribute towards your monthly mortgage payments for a period of time.
Whichever way you decide to negotiate, remember that if you don't ask, you don't get! Find out from the Sales Advisor for the development what incentives are available and don't forget - the homebuilder needs you, the buyer, more than you need their property. Happy haggling!