Who to engage with?

coff66

Hi folks,

Currently sale agreed on a new build but considering going back to negotiate a price reduction given the current situation.

My question is who should I contact in regards to this. The EA really has not been overly involved outside of taking our booking deposit, we have been dealing directly with builder, who met with us and even showed us a completed unit in the same development. Should we still go back to the EA and sound him out on a reduction or should we go straight to the builder?

Just to flag we are not looking to take advantage here just looking to see if there is any wiggle room as we don't want to be caught out come completion and be in negative equity from the day we draw down our mortgage.

Any thoughts or insights welcome.

Coff66

Thoie

If it's a new build in an estate/group of new houses, then your solicitor should contact the other side's solicitor. That can take some time (particular if solicitors are closed/not working from home). In cases like this where you've "bought off the plans" there isn't really any wiggle room, as they'll usually have a waiting list and if you start trying to change things they'll just dump you and go to the next person on the list.

Really you need to do some maths and hard thinking about how much you want this house, and are you prepared to walk away.

Let's say they're selling the house for €300k, and it's now worth €250k before you've moved in. You're getting a mortgage for €270k.

How long are you planning on living there? If less than 5 years, that's a risk. If you're planning on living there for 20 years, it's less of an issue.

If you pass on this opportunity, how much do you lose? A €5k deposit? More? Can you afford to lose that? Is your initial deposit refundable?

Are there other similar new developments for sale nearby? Has their advertised price dropped?

Are you willing to walk away from this and start the house search again?

Usually with new developments, the price is the price. The builders come up with their overall plans, work out a price for each house type, and that's it.

coff66

Thoie wrote: »

If it's a new build in an estate/group of new houses, then your solicitor should contact the other side's solicitor. That can take some time (particular if solicitors are closed/not working from home). In cases like this where you've "bought off the plans" there isn't really any wiggle room, as they'll usually have a waiting list and if you start trying to change things they'll just dump you and go to the next person on the list.

Really you need to do some maths and hard thinking about how much you want this house, and are you prepared to walk away.

Let's say they're selling the house for €300k, and it's now worth €250k before you've moved in. You're getting a mortgage for €270k.

How long are you planning on living there? If less than 5 years, that's a risk. If you're planning on living there for 20 years, it's less of an issue.

If you pass on this opportunity, how much do you lose? A €5k deposit? More? Can you afford to lose that? Is your initial deposit refundable?

Are there other similar new developments for sale nearby? Has their advertised price dropped?

Are you willing to walk away from this and start the house search again?

Usually with new developments, the price is the price. The builders come up with their overall plans, work out a price for each house type, and that's it.

It's a new build in a small development where housing are being completed in blocks of 2/3. There is no contract signed at present so booking deposit is fully refundable. As far as we are aware there are two currently under construction and we are the only sale agreed. The development is in a rural enough location within a very reasonable driveable distance to a major town.

We are aware that the two next door, identical houses, sold for slightly less than what ours had been advertised at.

The house will be our home for the long term and are most likely happy to go ahead regardless but don't want to be kicking ourselves 12months down the line for not having asked and seeing neighbouring houses go for less.

I suppose we don't want to be upsetting anybody but also don't want to be soft touches either and be a cautionary tale for people in the future.

Thoie

coff66 wrote: »

We are aware that the two next door, identical houses, sold for slightly less than what ours had been advertised at.

The house will be our home for the long term and are most likely happy to go ahead regardless but don't want to be kicking ourselves 12months down the line for not having asked and seeing neighbouring houses go for less.

I suppose we don't want to be upsetting anybody but also don't want to be soft touches either and be a cautionary tale for people in the future.

I think if the identical houses next door went for less then definitely get on to the solicitor before contracts are exchanged - you're in a much better position to ask for an adjustment. Don't worry about upsetting anyone - they're a business, and I'm sure they try to negotiate with suppliers too!

Knowing that they sold some for less may show there isn't a ginormous demand with a huge waiting list. Unless the two next door are friends/family of the developers it gives you a good starting point. Ask your solicitor to offer the same amount as they paid (unless there's some difference with your house - bigger garden, for example).

coff66

coff66 wrote: »

...........There is no contract signed at present so booking deposit is fully refundable. As far as we are aware there are two currently under construction and we are the only sale agreed.............

Get deposit back and see what they say.

coff66

Thoie wrote: »

I think if the identical houses next door went for less then definitely get on to the solicitor before contracts are exchanged - you're in a much better position to ask for an adjustment. Don't worry about upsetting anyone - they're a business, and I'm sure they try to negotiate with suppliers too!

Knowing that they sold some for less may show there isn't a ginormous demand with a huge waiting list. Unless the two next door are friends/family of the developers it gives you a good starting point. Ask your solicitor to offer the same amount as they paid (unless there's some difference with your house - bigger garden, for example).

Contracts are with our solicitor but have not been signed. So we should do the request through our solicitor and not EA or direct with builder?

The development is small and being developed 2/3 units at a time. The two next door units were advertised and sold for 5k less than what the house we are sale agreed on was, it may have been late 2018 or early 2019 when sale were completed but houses were only completed November 2019.

coff66

Augeo wrote: »

Get deposit back and see what they say.

That's kind of what I meant by not wanting to take advantage either. I am aware they are a business but they are not a massive business and want to ensure relations remain positive as if we do completed sale they will be around for the next 12 months minimum completing the rest of the development.

antix80

Op, unless you have a legal obligation to buy it I wouldnt worry about being "fair."

coff66

antix80 wrote: »

Op, unless you have a legal obligation to buy it I wouldnt worry about being "fair."

I get what you are saying for sure.

Have kind of gotten away from the initial point of the thread.

So to discuss the possibility of the reduction the best port of call would be to our solicitor to contact their solicitor?

Marcusm

coff66 wrote: »

Contracts are with our solicitor but have not been signed. So we should do the request through our solicitor and not EA or direct with builder?

The development is small and being developed 2/3 units at a time. The two next door units were advertised and sold for 5k less than what the house we are sale agreed on was, it may have been late 2018 or early 2019 when sale were completed but houses were only completed November 2019.

Has the bank valuation been done? If not, wait for that and see whether it provides the perfect reason for a price reduction.

bigpink

If the propert market slows id assume less new houses will be build?

coff66

Marcusm wrote: »

Has the bank valuation been done? If not, wait for that and see whether it provides the perfect reason for a price reduction.

Bank valuation won't be completed until house is completed and we are looking to drawdown the mortgage. That was due to be October, who knows when it could be completed at this stage given the current situation.

bigpink

Pull out this house is a year away from being ready

Claw Hammer

If a booking deposit has been paid, then you should only communicate through your solicitor. You should tell your solicitor that you think the price is too high manager may not go ahead unless there is a reduction. Your solicitor will guide you with regards to how you should negotiate.

coff66

bigpink wrote: »

Pull out this house is a year away from being ready

House is almost a roof stage, but you could still be right with it being 12 months away from completion or you could be totally wrong. That's the problem with current situation, lockdown could end on the 12th or could be extended for 2/4/6 weeks or months nobody knows.

coff66

Claw Hammer wrote: »

If a booking deposit has been paid, then you should only communicate through your solicitor. You should tell your solicitor that you think the price is too high manager may not go ahead unless there is a reduction. Your solicitor will guide you with regards to how you should negotiate.

Thank you. Have made contact with solicitor asking for guidance on how we should proceed with looking to negotiate a possible reduction. Hopefully they are at work as have not heard from them since the 18th of March when informed them the letter of offer for our mortgage had been issued from the bank.

davedub2015

Contracts received solictor told us to put it to estate agent first wondering is this the norm or should they ask first?

Claw Hammer

davedub2015 wrote: »

Contracts received solictor told us to put it to estate agent first wondering is this the norm or should they ask first?

Once your solicitor knows you're doing it, that is enough. Put your proposition to the agent. Anything you put in writing to the agent you should CC to the solicitor. The solicitor would have got the sales advice letter from the agent and will be mightily pissed off if the deal broke down through your negotiating behind his back. Now that he knows what you're doing, off you go.

antix80

davedub2015 wrote: »

Contracts received solictor told us to put it to estate agent first wondering is this the norm or should they ask first?

You're not the op... What's your issue?

I doubt you can expect your solicitor to haggle for you. They just advise you and carry out your instructions.

If you need to renegotiate a purchase you should go through the estate agent. Just remember that they've been at this game a lot longer than you have. May be worth pulling out of the sale and waiting to see how low the market goes in the next year.

coff66

So just a quick update, spoke with solicitor and directed us to the EA. Made contact with the EA and without saying so directly, refused to go to the builder to ask. Suggested we pause for now and wait until we see how the markets/banks react and see then.

Rainmann

coff66 wrote: »

So just a quick update, spoke with solicitor and directed us to the EA. Made contact with the EA and without saying so directly, refused to go to the builder to ask. Suggested we pause for now and wait until we see how the markets/banks react and see then.

That seems like an odd thing for the EA to do but maybe I am missing something. You would expect from an incentive point of view the EA would be keen to get the deal done even at a slightly lower rate rather than reccommending you to pause things.

coff66

Rainmann wrote: »

That seems like an odd thing for the EA to do but maybe I am missing something. You would expect from an incentive point of view the EA would be keen to get the deal done even at a slightly lower rate rather than reccommending you to pause things.

Ya I thought it was odd too but it is what it is. We aren't put out by it, as house is no where completed and no contracts signed. We don't envisage pulling the plug either, but am kind of hoping now that a larger reduction than what we were going to suggest comes from it and just drop it in conversation around closing that the EA delayed when we would have taken a smaller reduction happily earlier in the process.