Best approach when buying new build in current market

T

thejuggler

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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?
 
what my main concern would be if the builder went burst, what would happen to the remainder of the houses and the development as a whole, there a thousands of developments across the country, partly finished and will remain this way for the foreseable future...whats worse is that the builder won't maintain them or will have gone burst, so you will looking at a ugly eyesore after a few years and a hang out for youths, unsociable behaviour etc.
Also many builders are trying to sell to the councils either as council houses or affordable houses at big discounts, so that they can repay the banks and prevent going burst..so still paying 400K maybe good now but not a good deal when you have a council house next door!!!!
My advice, look for a second hand house in a nice development thats finished off, you may have stamp duty, but long term, a better investment

In general, I'm still bewildered why people are buying in unfinished sites, don't they know its going to get worse than better for the next few years, by then these once prime/luxuary developments will be the new "no go areas"
 
I would avoid a new build in an unfinished estate at all costs. There is so much that can go wrong that the builder might just ignore once they know they have the house sold. E.g. 17 months down the line we are still (as are my neighbours) having problems with our properties that were thrown up in the boom and I personally have some question marks over some parts of the construction process. If the builder who built them went bust, then we would have no hope of having our problems resolved...if I could do it all again, I would have avoided buying a new build and would be looking for a secondhand house in a well established area - that way you know (as much as is possible) what you are letting yourself in for.
 
Thanks I hadn't considered the possibility of the builder going bust. They still seem to be building away on the site but that can only continue for so long if little is selling. Noone knows at what price point things will level off. 30% below peak price may still be too high. I think I will adopt a wait and see attitude and see what happens.
 
If you really want to but a new build, contact the builder's bank and see if you can do a deal.
 
He may not be in as bad a decision as some then and it is a good sign that he is still building. Go to the EA with your offer and let him deal with the builder say its all your approved for and chance your arm.
 
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.
 
MrMan said:
He may not be in as bad a decision as some then and it is a good sign that he is still building.
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Not necessarily. He may be blindly running his company into the ground in the hope that a turnaround will magically happen and customers will magically appear.
 
extopia said:
Not necessarily. He may be blindly running his company into the ground in the hope that a turnaround will magically happen and customers will magically appear.
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I would say your very close to the truth. The sooner a few more of these guys start falling the quicker the house and land values will hit reality.

Joejoe
 
joejoe said:
I would say your very close to the truth. The sooner a few more of these guys start falling the quicker the house and land values will hit reality.

Joejoe
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The truth you would like to hear, the alternative being the longer he keeps going the longer you will keep a lot of workers off the dole queue. Not all developments are over priced and those that are not are still moving units.
 
I talked to the builder at the weekend and 460k is still the price - a take it or leave it scenario. I decided to leave it for now - there will be better value next year I'm sure
 
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