Best approach when buying new build in current market

thejuggler

I'm looking at a new build 5 bed 1500 square ft detached house in a development which is mostly finished but unsold. There are maybe ten such houses finished for at least 12 months. The development launched about two years ago at the very peak of the housing market and asking price then was 570k.

Obviously much has changed since then in the market and I would be hoping to get a good discount. Should I talk to the estate agent or contact the builder directly? I would be hoping to get it for 400k (just under a 30% discount) but maybe I'm overly optimistic. What approach would you take in my situation?

TJM

Best advice I've heard recently - If you're not embarrassed by your offer then you're offering too much.

mikewest

Things to bear in mind if looking at a new unfinished estate in the current market

1 The estate may never be finished so expect to be looking at unfinished houses while you live there.

2 As the estate is unfinished the co. council will not take over the maintenance of roads and lighting in which case who wil pay the bills ?

3 if the estate in showing lots of unsold houses is there any reason other than they are stupidly overpriced ?

If you are comfortable with the above then lowball the price by a stupid amount and if the vendor / ea is insulted tell them that they have your number and if they want to sell, you currently have the money. If they don't bite then keep looking because prices are only going one way for a long time to come.

jmayo

mikewest wrote: »

Things to bear in mind if looking at a new unfinished estate in the current market

1 The estate may never be finished so expect to be looking at unfinished houses while you live there.

2 As the estate is unfinished the co. council will not take over the maintenance of roads and lighting in which case who wil pay the bills ?

3 if the estate in showing lots of unsold houses is there any reason other than they are stupidly overpriced ?

If you are comfortable with the above then lowball the price by a stupid amount and if the vendor / ea is insulted tell them that they have your number and if they want to sell, you currently have the money. If they don't bite then keep looking because prices are only going one way for a long time to come.

Only thing I would add is to bear in mind if there are smaller houses 2/3 beds in the development they may eventually be taken by local authority and you never know who your new neighbours may be ?
I know it sounds elitist but it can have a major bearing on your living quality and the value of your house in the longer term.
Also go in with real low offer (IMHO go way below the 30%) and see if they counter offer.
You need to remember and also remind them it is a buyers market and the good times are over

thejuggler

I spoke to builder and he says the asking price now is starting at 460k so they've shifted a bit. I'll put in a low offer and see how they react.

Money Shot

thejuggler wrote: »

The development launched about two years ago at the very peak of the housing market and asking price then was 570k.

I would be hoping to get it for 400k (just under a 30% discount) but maybe I'm overly optimistic. What approach would you take in my situation?

I think you are looking at it the wrong way - you aren't getting a discount of 30% or any other percentage. The 570k was a purely notional and aspirational asking price. It's supply and demand and it's only ever worth what anyone is willing to pay for it. If they are not shifting, you are entitled to make any offer you want, and I reckon if he has cash flow problems and a banking calling him daily, he might accept once it's not below his floor/cost price.

faceman

OP regardless of price, Id be very weary of moving into an estate where very few units are sold. In the event you buy and need to sell sooner than expected, it will be very difficult to sell and you will be forced to advertise no higher than the asking price of the unsold units.