Author Topic: Buying off plan before any building has started  (Read 6991 times)

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firsttimebuyer

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Buying off plan before any building has started
« on: August 16, 2016, 11:27:43 pm »
Thanks so far for all your help (particularly NHE - I have just made a donation ;))
I have narrowly avoided a BIG mistake with Persimmon Homes and am currently waiting to receive my deposit back from them.

In the interim, I have been looking at a lot of new build sites (I'm limited to new build so I can do Help to Buy).

I've found a really nice Barratt site that has just been launched. At the moment there is just an empty field; the show homes are just about to be started and the saleswoman is currently operating from the David Wilson office next door that is now sold out.

The first 5 plots have just been released and they are looking for them to be build complete in March 2017 (weather dependant).

I'm keen to reserve one plot in particular but was just wanting some advice please.
At present the saleswoman offered to throw in carpets if I reserved but I was just wondering if I dare ask for anything else, and if so, what am I best off asking for?

I know I'm in a good position as I already have my mortgage sorted and after reading on this site, know that I must definitely not use their solicitors! Would it be acceptable to ask for Stamp Duty paid or would it be better to ask for extras within the house, e.g. kitchen upgrade or integrated white goods, or do I ask for a reduction on the price or is this not the done thing?

Also, is there anything I should be wary of, especially as there is no show home to look at yet?
Having said that I've been told that the same team that has built the DWH are moving over to do the Barratt ones (just changing their uniforms lol), and the DWH site does look very nice :)

Any advice would be very much appreciated.

As a FTB I'm very green and really value being able to tap into your knowledge and expertise.



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Re: Buying off plan before any building has started
« Reply #1 on: August 17, 2016, 07:33:56 am »
First of all, thank you for your donation.

The big advantage of buying off plan is the price is fixed and in a normal market, the prices rise whilst the home is being built without you having to pay anything.  It is also highly probable that when the show homes are finished prices will go up and will be increased even further as the site is sold. A March completion is in the middle of half-year and year-end figures so it shouldn't be a rush job either.

Most housebuilders will want to get some sales on the board early on as it breeds confidence for those who visit later that the development is popular. It has even been known that false sold stickers are put on homes and the sales office site plan! So you should be able to get a good discount. Be wary of buying near any social, or as they call it, "affordable" homes. These will probably not be for sale but should be indicated on the site layout.

On the downside you can't see what you are buying rooms sizes etc.  If you can go and visit your house type on another site just to be sure it is really what you want.
As you know, Barratt and David Wilson Homes are the same company.  Check whether the site manager that will be building your home won an NHBC Quality Award last year. (Check out the link.)

As far as a deal is concerned, you are always going to be better off with cash. Stamp Duty paid is quite common but works out at 1% (£2,500) on a £250,000 home. Stamp Duty Calculator 

It should be possible to get around 3-4% off the listed price.
You might have to have this made up of a discount, stamp duty and perhaps some "free" extras.
Be aware that upgrades and house builder optional extras are always poor value. In particular, House builder's carpets are always rubbish quality and will probably be "thrown in" not laid!
You could also indicate that a good deal now, will mean you would give a  "YES" to Q1 in the 8 week Customer Satisfaction survey!
You are in a strong position, you don't have a house to sell and are very unlikely to pull out.
You are also "green" so in builder's eyes, you won't be expecting too much.

I would ask sales if you are buying timber frame. Normally these are best avoided anyway but one built in the winter months may get soaked and suffer more shrinkage than usual. Squeaking floors are a particular problem.

What you get using 20% Help to Buy has been more than taken up with housebuilder increasing their prices since it stated. You are also paying a premium price for a new home.  You can use Help to Buy to get a 95% mortgage at reasonable rates for an older home.

I am delighted for you that you avoided Persimmon. They should refund your reservation fee but may try and justify keeping £100-£250 for admin.
New Home Blog - New Home Expert is committed to providing help and advice for people having issues with their new homes and difficulties with house builders as well as helping potential buyers reduce the risk of possible problems if they do buy.


firsttimebuyer

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Re: Buying off plan before any building has started
« Reply #2 on: August 19, 2016, 12:08:26 am »
Thanks for your reply NHE :)

I went to the Barratt's sales office today hoping to negotiate a good deal on the plot I am interested in but was told the best they could do is throw in the carpets. The same saleswoman was on the DWH site adjacent and she said they had no problem selling them and she was anticipating it to be the same at this site so that's why there would be no incentives. She said head office had given her no leeway...
Do I believe her, or am I better biding my time?
No plots have been sold on the new site as yet but as she pointed out they haven't started building yet so she has at least 6 months to sell them all.

I asked about the timber frame and was told that it wasn't, and I also found out it is freehold which I think is better than leasehold.

The plot I am interested in is advertised as having a double parking space but when I enquired about this further (I couldn't see where the 2nd space was on the plan) I was told it was tandem parking. I've got a couple of questions about this:

Does it mean the house has been overvalued when the price was set? (as I'm assuming a double parking space would be higher value than a tandem space)

Do you think Barratt's would sell the other parking space (the one next to mine) to me or would they not be allowed as it has already gone through planning?

It is difficult as there are no houses of this style in the country yet, so there isn't a showhome I could go and look at. Having said that I think the room sizes are going to be fine for me and the plot and estate seems to tick all the boxes so far.

I asked about prices of upgrades/extras but the saleswoman said there weren't any prices available as yet. She did mention that a kitchen upgrade would be about £2,000 though :O I'm disappointed that there seems to be no room for negotiation; I had hoped that I was going to come out of her office feeling like I'd got a great deal.

Where should I go from here, or is it simply that popular estates don't offer any incentives to buyers?

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Re: Buying off plan before any building has started
« Reply #3 on: August 19, 2016, 06:12:44 am »
The problem is the government policies (Help to Buy, ultra low interest rates and funding for lending) mean that even the worst house builders (like Persimmon & Bovis) don't have to try hard to sell new homes. There are always more buyers than new homes.
This is why they all keep supply at a level to maintain prices and more importantly to them, higher prices.

As far as this Barratt and this house is concerned:
See also visiting sales centres
1) Tell the sales woman she can stick her rubbish quality carpets and you want the cash equivalent discount (should be around £3,000)

2) All sales staff have negotiables. As I said it used to be 3% but you should get 1% without and reference to head office.

3) She hasn't got 6 months to sell, Barratt will want sales on the board as soon as possible, You may get a better deal towards the end of the month, especially if she hasn't sold any/enough that month.

4) Be sure to get it confirmed in writing that the home is not Timber frame construction and it is freehold. Sales will tell you anything, especially if you cannot prove what they said at a later date!
Also make sure there are not any annual charges for roads, open spaces and landscaping maintenance. Some developments do, choose one that does not The estate roads should be adopted by the local authority.
My advice is always never buy a leasehold property.

5) Tandem parking.
This is most definitely not the same as two parking spaces.  One "space" is blocked in.
In addition, there may be fencing or walls making the rear space or both spaces virtually unusable if they are not sufficiently wide enough!  Check out this previous post on tandem parking spaces as this could happen to you!

I doubt very much Barratt would sell you the adjacent space as that might well be a planning requirement that every plot has adequate parking. Nevertheless, it might be possible to change the ownership/allocation of the spaces but again I expect Barratt won't want the hassle and won't need to.  You could say you like the plot but the parking is a real issue and you would only consider buying this plot if there was a price reduction (£1,500)

Did you mention the customer satisfaction survey? I would be surprised that they would want to risk annoying and upsetting you, before they even start to build your home!
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anthyboy

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Re: Buying off plan before any building has started
« Reply #4 on: August 19, 2016, 07:53:37 am »
My advice would be to do their eligibility check with whoever their mortgage broker is (doesn't mean you need to use them) but this will prove you are a credible potential buyer.

One this has been done and provided you are credible,  then simple send an email to the sales women stating this is your offer! They are obliged to pass all offers to their head office for consideration.
Then wait and see what happens, but be prepared to wait a month.

Also if you are using Help to Buy then as a single application you can borrow 4.5 times your wage and as a couple it's 3.5 times your joint wages. Work out how much you could potentially borrow and when their mortgage broker/advisor rings you give a wage figure that will mean the total you could borrow is £10,000 (even if you can borrow more) below asking price. I did this and got £8,000 of the price even on an extremely popular site.

Good luck and do all correspondence via email for evidence, also be aware that you will receive a blank house and I have spent £15,000ish to turn into a home.

You will need to do your rear garden including at least one fence, house probably won't come with wardrobes plus a host of other things as well like flooring and curtains for your whole house!

firsttimebuyer

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Re: Buying off plan before any building has started
« Reply #5 on: August 25, 2016, 05:13:36 pm »
Is it true that builders can't do deals on plots that haven't been started yet?!

That is what the Barratt saleswoman is telling me  :-\

Matron

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Re: Buying off plan before any building has started
« Reply #6 on: August 25, 2016, 05:45:03 pm »
We paid a reservation fee on a Bellway home in February (we have now moved in) and they hadn't started building on the plot and we asked for certain deals which the sales adviser agreed with. We got it formally in writing and were very happy with this. We asked for the back garden to be turfed, carpet package upgraded and upgraded flooring to amtico in the kitchen and utility room.


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Re: Buying off plan before any building has started
« Reply #7 on: August 26, 2016, 05:36:29 am »
Housebuilders will always do a deal, that is if the homes aren't selling, especially at the start of a development, or at their half-year or year-end.

There is no legal reason why a discount cannot be given, irrespective of the stage of construction.
But if the plot hasn't been released for sale then the price will not be known so no deal or discount could obviously be given on 'early bird' reservations.
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