12 Jul 24
Property portal OnTheMarket has offered investors and other canny would-be purchasers some negotiating advice on new to secure discounts or other perks on new builds.
“Making an offer on a new build house requires careful consideration of several factors. Start with market research to understand the prices of similar properties in the local area, helping position your offer competitively. Understanding the market dynamics, whether it’s a buyer’s or a seller’s market, could reveal negotiation leeway” says a portal spokesperson.
“Unpack the builder’s pricing to identify cost-saving incentives, like discounts for a quicker closing. Knowing the development stage is key as developers often offer deals on remaining units or those nearing completion. A mortgage pre-approval can demonstrate your seriousness to builders, potentially resulting in better financing terms.
“Also, rethinking customisations and upgrades could also help to negotiate down the price. Investigate the builder’s reputation; a reputable builder might be less flexible on price but assures quality”.
When it comes to negotiating on a new build property, timing is everything. 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.
At the end of the year, whether annual or financial, developers may be under more pressure to meet their sales targets. Also, 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.
1. Stamp duty – For first-time buyers, stamp duty is 5% of new homes valued between £425,000 and £625,000. However, some new build developers will offer to pay stamp duty for you, which can be a huge saving for prospective buyers.
2. Upgrades and customisations – You can request an upgrade to features and finishes within your new home, such as high-end kitchen appliances, higher-quality bathroom fixtures such as towel radiators, upgraded flooring, or even upgraded light switches. All of these upgrades will save you money in the long run, as your home will already be up to your standards.
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, which can sometimes end up quite costly.
4. Financial incentives – Some 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 throughout the warranty period.
6. Community amenities access – Within some developments, free or discounted access to community amenities, like gyms or pools, may be available as an incentive.
7. Expedited build schedule – You can even negotiate the completion date on a new build. 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.
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