Buying an old build off a new build developer.
Discussion
Going to look at a house today that's been on the market most of the year.
Started at £295k, then bit by bit dropped to £275k.
Agent called yesterday to say that it's now vacant as the owners sold (part exchanged) it to the developer of the new build that they moved in to.
Says that the company might be interested if I offer my top budget of £250k.
I see on Zoopla it's down as sold in the last few months for £216k.
I assume that's what the developer paid the original owners.
I don't know how accurate those previous prices on Zoopla are, but were I to own it then maybe sell in the future, won't seeing that 'low' sell price affect what I could ask for it?
And with that in mind, and the fact that I'm not worried if I get it, would a faceless company just be happy to sell for just a bit of profit, say £10k.
Suppose I offer £225k, if I like it.
Anyone been in a similar situation?
Oh, and if someone realises that I was the poster that had put a deposit on a new build, the whole process had suckered me in, like buying a new car, and I was accepting compromises.
Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
Started at £295k, then bit by bit dropped to £275k.
Agent called yesterday to say that it's now vacant as the owners sold (part exchanged) it to the developer of the new build that they moved in to.
Says that the company might be interested if I offer my top budget of £250k.
I see on Zoopla it's down as sold in the last few months for £216k.
I assume that's what the developer paid the original owners.
I don't know how accurate those previous prices on Zoopla are, but were I to own it then maybe sell in the future, won't seeing that 'low' sell price affect what I could ask for it?
And with that in mind, and the fact that I'm not worried if I get it, would a faceless company just be happy to sell for just a bit of profit, say £10k.
Suppose I offer £225k, if I like it.
Anyone been in a similar situation?
Oh, and if someone realises that I was the poster that had put a deposit on a new build, the whole process had suckered me in, like buying a new car, and I was accepting compromises.
Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
How desperate are you for that particular house?
When we moved last year, we decided against part exchange because the developer or their part ex subbie would have been primed to make a decent chunk of money say ~£40k on a house that sold at £340k, just to give you an indication of how much money they would like to make out of the deal... all the usual excuses such as high conveyancing fees, etc. etc. Dont know whether they pay stamp duty on a flip deal though..
You can put an offer it, whats the worst that they can do? Especially considering how the housing market is at the moment, desperate to make a sale on the new build, they might just bite your hand off at £225 or £230k
On another note, re. new builds, both our current and previous houses were new builds, bought off plan.. it made perfect sense for us, fit our style at the point of purchase with zero compromise, both with decent builders and having good relationship with the site managers, I got snags rectified in record time, including ones I thought they will whinge away from...
and this was after looking at so many potential fixer upper properties where either the location was s
te or the previous owners spent a few quid trying to spruce the place up, badly, and wanted a premium price for it, where not only would I have had paid the extra for the work done, I would have had to rip it all off and do a proper job immediately after moving in..
As with anything it is always location, location, location..
When we moved last year, we decided against part exchange because the developer or their part ex subbie would have been primed to make a decent chunk of money say ~£40k on a house that sold at £340k, just to give you an indication of how much money they would like to make out of the deal... all the usual excuses such as high conveyancing fees, etc. etc. Dont know whether they pay stamp duty on a flip deal though..
You can put an offer it, whats the worst that they can do? Especially considering how the housing market is at the moment, desperate to make a sale on the new build, they might just bite your hand off at £225 or £230k
On another note, re. new builds, both our current and previous houses were new builds, bought off plan.. it made perfect sense for us, fit our style at the point of purchase with zero compromise, both with decent builders and having good relationship with the site managers, I got snags rectified in record time, including ones I thought they will whinge away from...
and this was after looking at so many potential fixer upper properties where either the location was s
te or the previous owners spent a few quid trying to spruce the place up, badly, and wanted a premium price for it, where not only would I have had paid the extra for the work done, I would have had to rip it all off and do a proper job immediately after moving in.. As with anything it is always location, location, location..
Edited by kv85 on Wednesday 11th November 08:47
As above, a future seller isn't going to care one bit that someone in history paid £x for the house whether it was a year ago or 20 years ago.
About how much you should be paying for it, thats down to you to decide and how much you want the house. Sounds like the original price was top end (hence it sat for a year) and even 275k was optimistic. What are other similar houses selling for in the area? If the selling estate agent knows your budget is £250k then they're always going to suggest you pay that. Bear in mind that others might be in a similar position - do you want to miss out on it?
About how much you should be paying for it, thats down to you to decide and how much you want the house. Sounds like the original price was top end (hence it sat for a year) and even 275k was optimistic. What are other similar houses selling for in the area? If the selling estate agent knows your budget is £250k then they're always going to suggest you pay that. Bear in mind that others might be in a similar position - do you want to miss out on it?
croyde said:
Going to look at a house today that's been on the market most of the year.
Started at £295k, then bit by bit dropped to £275k.
Agent called yesterday to say that it's now vacant as the owners sold (part exchanged) it to the developer of the new build that they moved in to.
Says that the company might be interested if I offer my top budget of £250k.
I see on Zoopla it's down as sold in the last few months for £216k.
I assume that's what the developer paid the original owners.
I don't know how accurate those previous prices on Zoopla are, but were I to own it then maybe sell in the future, won't seeing that 'low' sell price affect what I could ask for it?
And with that in mind, and the fact that I'm not worried if I get it, would a faceless company just be happy to sell for just a bit of profit, say £10k.
Suppose I offer £225k, if I like it.
Anyone been in a similar situation?
Oh, and if someone realises that I was the poster that had put a deposit on a new build, the whole process had suckered me in, like buying a new car, and I was accepting compromises.
Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
You're massively overthinking this. If £250,000 is a good price and you can afford it then offer that. If you think it's worth less, offer that. As someone searching for a house and avidly following your particular market you should know what it's worth.Started at £295k, then bit by bit dropped to £275k.
Agent called yesterday to say that it's now vacant as the owners sold (part exchanged) it to the developer of the new build that they moved in to.
Says that the company might be interested if I offer my top budget of £250k.
I see on Zoopla it's down as sold in the last few months for £216k.
I assume that's what the developer paid the original owners.
I don't know how accurate those previous prices on Zoopla are, but were I to own it then maybe sell in the future, won't seeing that 'low' sell price affect what I could ask for it?
And with that in mind, and the fact that I'm not worried if I get it, would a faceless company just be happy to sell for just a bit of profit, say £10k.
Suppose I offer £225k, if I like it.
Anyone been in a similar situation?
Oh, and if someone realises that I was the poster that had put a deposit on a new build, the whole process had suckered me in, like buying a new car, and I was accepting compromises.
Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
What the developer paid for it is irrelevant as you have no idea what concessions they made in the swap and their reasons for doing so. Future buyers won't care what the developer paid for it.
I did exactly this 6 years ago, owner had part x'd the 100 year old house for a new build.
Had been empty for 6 months when I first offered with little to no interest.
I ended up paying £45k less than the developer had paid (yes there is other accounting magic on the new build side of the deal) (IMHO they "overpaid) and sure this looks odd on a zoopla search.
There wasn't much in the way of negotiation, offer, reject, offer reject, lost out when they accepted someone else's offer, this fell through, and I ended up offering less than my original high. (early lockdown will house market collapse) with good justification and they accepted. (I dont think the developer had actually seen the house, the condition was far worse than they believed)
Only thing I'll note, short of getting them to settle on the huge outstanding energy invoice, they insisted on "sold as seen". The 2 x surveys we had done revealed some big ticket items, but they would absolutely not budge on.
Their solicitor was alright and we worked through some issues direct me with n them RE boundaries etc.
Had been empty for 6 months when I first offered with little to no interest.
I ended up paying £45k less than the developer had paid (yes there is other accounting magic on the new build side of the deal) (IMHO they "overpaid) and sure this looks odd on a zoopla search.
There wasn't much in the way of negotiation, offer, reject, offer reject, lost out when they accepted someone else's offer, this fell through, and I ended up offering less than my original high. (early lockdown will house market collapse) with good justification and they accepted. (I dont think the developer had actually seen the house, the condition was far worse than they believed)
Only thing I'll note, short of getting them to settle on the huge outstanding energy invoice, they insisted on "sold as seen". The 2 x surveys we had done revealed some big ticket items, but they would absolutely not budge on.
Their solicitor was alright and we worked through some issues direct me with n them RE boundaries etc.
A cynic might suggest that part-ex-ing an old house for a new one, stamp duty would be saved by knocking £50k off both prices...
Or the developer may have done work on the old place.
Anything from decorating, through bathrooms and kitchens, to remedial work like underpinning.
You can offer what you want. Maybe they will take it. Maybe the company is desperate for cashflow. Maybe they will have to throw the house at the next auction?
Or the developer may have done work on the old place.
Anything from decorating, through bathrooms and kitchens, to remedial work like underpinning.
You can offer what you want. Maybe they will take it. Maybe the company is desperate for cashflow. Maybe they will have to throw the house at the next auction?
Mr Pointy said:
When you come to sell the only number a buyer is going to care about is how does the asking price compare to other similar properties in the area.
This.We picked up a flat for my son at auction for under £100k. It needs a lot of work but its still a bargain. Identical properties have sold for £175k -£200k+
The ones currently for sale are still in the same price range, as are comparable flats outside of the area.
One cheap sale isn't going to alter a market.
croyde said:
Oh, and if someone realises that I was the poster that had put a deposit on a new build, the whole process had suckered me in, like buying a new car, and I was accepting compromises.
Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
Don't blame you for pulling out, I don't understand why anyone would consider a new build for all the reasons you have stated and more. The youngsters at my work see buying a new house as a flex, I assume because they just want to move into their white and grey box and not have to do anything. Like north facing garden permanently in shade, nowhere to park the car nearby, management fees and rules about what you could do with the tiny front bit of mud and size of shed in the garden
So I pulled out.
When I tell them my house was built in 1860 I can see they think I am mental.
As for the offer, if they paid £216K for it then I think £225K is a fair starting offer, especially in this market and the fact it is close to Christmas. Make your position clear, that you are a cash buyer, there is obviously no chain and you can move in as soon as possible.
blueg33 said:
Housebuilders don't like having part exchanges sat on their books, they have a finite budged for p-ex properties. I would offer them the equivalent of £216,000 plus the amount of SDLT they will have paid. That will break even for them
They're unlikely to have paid any SDLT: https://www.gov.uk/hmrc-internal-manuals/stamp-dut...I'd offer them £216k.
What's, in effect, happening is you're getting the discount they could have offered the new build purchaser whilst the developer preserves the sale price of the new one (important to not p
s off other purchasers or adversely affect metrics).ETA:
croyde said:
I'm an actual cash buyer too, so it could be done and dusted very quickly.
Whenever I buy rentals, what really moves the needle is saying that the offer isn't contingent on anything other than the vendor's usual disclosures. I.e. no mortgage and no survey. If the buyer plays it off a straight bat it can complete as soon as the legals are done. If you're happy to forego a fresh survey, the same approach may well work with a housebuilder who wants certainty that it'll get done.Edited by LooneyTunes on Wednesday 11th November 10:57
If you like it then offer as low as you want - they can only say no.
If it was the developer that paid £216k then it would already have been lower than its real value for the partex convenience.
It gives a good number to start with though.
It’s what it’s worth to you so don’t worry about future sale.
Good luck with £216k.
If it was the developer that paid £216k then it would already have been lower than its real value for the partex convenience.
It gives a good number to start with though.
It’s what it’s worth to you so don’t worry about future sale.
Good luck with £216k.
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