What better feeling is there than getting the keys to your brand new home? Getting the keys, knowing you’ve secured the best possible price.
The fact is, nobody wants to overpay on a property. Whether you’re a first-time buyer thrilled to finally call a place your own or a seasoned homeowner looking for an upgrade, the idea of getting the best deal is always at the forefront of your mind.
Buying the home of your dreams doesn’t have to cost you more than it’s worth. We’ll walk you through the art of negotiating on new build properties, sharing practical tips and insider secrets, and empowering you to approach your purchase with confidence.
Can you make an offer on a new build?
Absolutely, you can make an offer on a new build home. Many people assume that the price of a new build is set in stone, however, that’s not necessarily the case. Builders often offer some flexibility, especially if they’re looking to sell units quickly or if the development is nearing completion.
How much can you negotiate down a new build?
Research shows that the average discount achieved through new build price negotiations is around 14% off asking price. This just goes to show that buyers who go out of their comfort zone and make the effort to negotiate with developers, might just make it worth their while.
Note that while this is the average, the reality will vary greatly depending on multiple factors, from the local property market to the particular builder’s policies. We recommend you do your research before haggling on the price.
How much can you negotiate down a new build?
Research shows that the average discount achieved through new build price negotiations is around 14% off asking price. This just goes to show that buyers who go out of their comfort zone and make the effort to negotiate with developers, might just make it worth their while.
Note that while this is the average, the reality will vary greatly depending on multiple factors, from the local property market to the particular builder’s policies. We recommend you do your research before haggling on the price.
What should you base your new build offer on?
Here are seven key factors to consider when calculating the right price for your new build offer:
1. Market research
Consider the prices of similar new builds and existing homes in the local area to get a better idea of the market rate and to ensure your offer is competitive. Understand whether it’s a buyer’s or seller’s market to see if there’s extra room for negotiation.
2. Builder’s pricing
Explore the builder’s pricing in more detail to get a clear understanding of the costs of any upgrades, and make sure they are not marked-up significantly. Some builders might offer extra incentives, such as free upgrades or discounts for quicker closing, so factor these in to reduce your out-of-pocket costs!
3. Development stage
You may find that developers offer better deals on homes that are the last few units in a lot of if they’re nearing completion, so use this to your advantage. Similarly, homes sold early in the development stage might also be easier to negotiate on in an attempt to attract more buyers.
4. Financial factors
If you secure a mortgage pre-approval, you demonstrate to builders that you’re a serious buyer. Better yet, if you use the builder’s preferred lender, you may even access better financing terms.
5. Home and lot features
Not all homes on a development will be valued the same, even if they are ‘identical’. Some lots within a development may have premiums based on location, size, or views, so factor these into your offer. Rethinking the customisations and upgrades you’ve chosen may also help you negotiate down the price.
6. Builder’s reputation
Research the builder’s reputation for quality and on-time delivery. A reputable builder might be less flexible on price but offer more value in terms of quality and reliability.
7. Overall budget
Again, while a cheaper price may seem attractive, consider more than just the purchase price. Take into account costs such as property taxes, homeowner association fees, maintenance costs, and potential appreciation.
What questions should you be investigating?
If you’ve got your eyes on a property on a new build estate or development, do a quick search of other properties for sale on the same development using our easy-to-use property search, which allows you to filter by developer name and location. Suss out the following…
- How many properties are there in the development?
- How many properties are still available for sale?
- How long have the properties been on the market?
- Are there any developments nearby?
- If so, how much are the properties of neighbouring development selling for?
The answers to these questions should give you a better picture of how much your property is really worth and improve your leverage when it comes to negotiating on a new build home.
When is the best time to negotiate on a new build?
Timing is everything when it comes to negotiating on a new build property. Here’s our expert advice:
Buying off-plan
Developers often offer discounts and incentives to early buyers to secure initial sales and generate cash flow for the project. Being one of the first buyers can put you in a strong position to negotiate a lower price or additional perks, such as discounted customisations throughout the build.
End of the year
At the end of the year, whether annual or financial, developers may be under more pressure to meet their sales targets. You can find out what year end is for a specific builder using Companies House.
Final few plots
If there are only a handful of homes left to sell, the builder may be more inclined to negotiate with you on the price in order to sell quicker and move onto their next project.
How to negotiate on new build house price through alternative means
Negotiating on a new build home might not just win you money off the property price but additional features, quicker turnarounds, and other incentives.
1. Stamp duty
Some developers will offer to pay stamp duty for you, which will be a large cost saving. For first-time buyers, stamp duty is 5% of new homes worth between £425,001 and £625,000.
2. Upgrades and customisations
Request an upgrade to features and finishes in your new home, such as high-end kitchen appliances, higher-quality bathroom fixtures, or hardwood flooring.
3. Closing cost assistance
Developers can sometimes offer to pay for a portion or all of your closing costs as an incentive, such as legal fees or any other administrative expenses.
4. Financial incentives
Financial incentives include reducing the mortgage interest rate for the first few years or providing preferred lender deals with better terms.
5. Home warranty extensions
You may be offered longer warranty periods for major systems and appliances beyond the standard coverage, which could save you money in the long run.
6. Community amenities access
Free or discounted access to community amenities, like gyms or pools, may be available as an incentive.
7. Expedited build schedule and quicker move-in dates
Can you negotiate the completion date on a new build? Definitely! Developers may prioritise your home in their construction schedule and bring your move-in date forward, which can save you thousands if you are renting in the interim.
Our final words of wisdom for you when it comes to negotiating on a new house price is to always get your negotiations in writing. Whether it’s a £5,000 reduction in price or an upgrade to granite countertops, get written evidence to show your solicitor to make sure it’s in the contract. Also, appoint a legal expert to ensure all agreements are legal and come with no unpleasant surprises.
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