Negotiating the price of a new build property in the UK can be a tricky process, but with the right approach, it’s possible to secure a great deal. Whether you’re a first-time buyer or a seasoned investor, it’s essential to understand the key factors that influence the price of new build properties and how to negotiate effectively to get the best possible price. Check out how much your home is worth with Romans.
Let’s explore some of the key things you need to know to successfully negotiate the price of a new-build property in the UK.
Figure out the new-build premium:
Purchasing a new build property is similar to purchasing a new automobile in the scenario that you will be spending more since it is “brand new.” Before you start negotiating, it’s crucial to have a good understanding of the market and the current prices of similar properties in the area. This information can be obtained through online property websites, local estate agents and government data. To determine the degree of premium you will be paying, check the price per square foot and contrast it with the resale market.
If you know the postcode, you may also check the Land Registry for the actual sales prices of nearby projects that are identical to yours. Sold homes often take 2 weeks to 2 months to be shown on the website.
Know the builder’s motivation:
Another key factor to consider when negotiating the price of a new build property is the builder’s motivation. For example, if the builder has a number of unsold properties, they may be more motivated to negotiate on price in order to move them. On the other hand, if demand is high and the builder has a long waiting list, they may be less likely to negotiate on price. Understanding the builder’s motivation will help you determine how much room you have for negotiation.
Consider timing:
The timing of your purchase can also have an impact on the price you are able to negotiate. The market for new build properties is cyclical, and developers may offer incentives and discounts during quieter periods. For example, if you’re buying a property towards the end of the financial year, the builder may be more motivated to sell as they look to meet their sales targets. Similarly, if the builder is about to launch a new phase of properties, they may be more willing to negotiate on price for existing properties in order to make room for the new builds.
Know your bargaining power:
Your bargaining power can also have a big impact on the price of a new build property. If you’re a cash buyer, you may be able to secure a better price than if you’re borrowing money. Similarly, if you’re buying multiple properties, you may be able to negotiate a better price for each one. It’s important to understand your bargaining power and use it to your advantage during negotiations.
The home builder will also be eager to leave the construction site and shift all resources to their upcoming project if there are only a few homes remaining to sell. You might be able to aid them by purchasing the property off their hands at a substantial discount.
Negotiate the extras:
In many cases, new build properties may come with additional extras such as parking spaces, storage units, or upgrades to the property’s finish. These extras can add significantly to the overall cost of the property, so it’s important to consider what you need and what you’re willing to pay for. When negotiating the price, you may be able to trade off some of these extras for a reduction in the overall cost.
Consider using a property solicitor:
Using a property solicitor can help you navigate the legal aspects of purchasing a new build property, including any restrictions on the property and negotiating the terms of the contract. A property solicitor can also help you negotiate a fair price, as they have experience in these types of negotiations and can provide valuable advice on the market and the current prices of similar properties.
Be prepared to walk away:
It’s important to know when to walk away from a deal if you’re not getting the price you want. It’s essential to have a clear idea of what you’re willing to pay and what you’re not willing to compromise on, as this will give you the confidence to walk away from a deal that’s not in your best interests.
In the end, a property’s value is only determined by the price that will be paid for it. If you’re purchasing a new home and want to stay in it for a long time, you might be more than willing to pay the new home premium. However, you should take the premium into account if you’re unclear about how long you want to remain in the house as you can go into negative equity if your deposit is too large. Additionally, involving a property solicitor or a real estate agent can help provide valuable support and advice in the negotiating process.
