Considering a Persimmon Newbuild

CoolBeanz · 13th July 2009, 12:52

Hi All, great website!

I'm considering a new build detached house built by Persimmon. I really like the location, and the price for the house is 'reasonable' although I know I've over paid - but I'll get to that later.

What is the process? So far I've paid £500 reservation fee, and they have said a 28th exchange deadline. I've asked if it is ok to exchange after this, and they said it will be ok. The house currently has the foundations down and that is it (they have done no work on the house in the last month I've been looking).

My questions are, is it normal to exchange with no completion date? I've spoke to neighbours in the development and they all said it will take longer than the developer has said. Also, as I will be buying with a mortgage what happens if my mortgage offer expires? Am I being unreasonable not to exchange unless it's within a 6month period (how long mortgage offers last for)? Will the developer do this? The docs I currently have give no guarantee and say it can be delayed.

Secondly, I agreed on a price which is only £10k (4.4%) off the asking price. I tried a lot less, but they were having none of it. I've now realised someone has paid £10k less back in September last year, for exactly the same house. Will they accept a gazunder? What happens if my mortgage company down-value the house, will persimmon agree to it (if they can't argue it)?

Thirdly, am I making a big mistake? The neighbours have said they have had lots of snags, still not fixed. Why can't I just exchange when it is built? Or exchange, but only complete after all snags (identified by an independant professional) have been resolved?

I'm just after your thoughts really. I'm prepared to lose the £500..

Tony · 13th July 2009, 13:20

Hi CoolBeanz,

Welcome to the forum. The new build buying process is not ideal froma consumers perspective as you have few rights. The OFT is trying to change this but the industry is failing.

Have a look at these:
Homebuilding Code on Brink of Failure | New Homes
Consumer Code for Home Builders

What is the process? So far I've paid £500 reservation fee, and they have said a 28th exchange deadline. I've asked if it is ok to exchange after this, and they said it will be ok. The house currently has the foundations down and that is it (they have done no work on the house in the last month I've been looking).

Quote:

Is it normal to exchange with no completion date?

Yes and the builder has no financial penalty for missing any date they do give. They usually make a date up to complete the sale.

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I've spoke to neighbours in the development and they all said it will take longer than the developer has said.

This is a smart move

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Also, as I will be buying with a mortgage what happens if my mortgage offer expires?

Have you explained to the mortgage company you are buying a new build, you could potential need another offer.

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Am I being unreasonable not to exchange unless it's within a 6month period (how long mortgage offers last for)?

No not unreasonable, but they can just say it will be complete within six months.

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Will the developer do this? The docs I currently have give no guarantee and say it can be delayed.

This is usal and unfair as the consumer takes all the risk

Quote:

Secondly, I agreed on a price which is only £10k (4.4%) off the asking price. I tried a lot less, but they were having none of it. I've now realised someone has paid £10k less back in September last year, for exactly the same house. Will they accept a gazunder? What happens if my mortgage company down-value the house, will persimmon agree to it (if they can't argue it)?

There cannot be much demand at the moment, if you are prepared to lose £500 then you are in a strong negotiating position.

Quote:

Thirdly, am I making a big mistake? The neighbours have said they have had lots of snags, still not fixed. Why can't I just exchange when it is built? Or exchange, but only complete after all snags (identified by an independant professional) have been resolved?

This is not unusual, one way round this is to buy a "stock home" that has been completed but unsold. This way you can actually see and inspect what you are getting.

If you are interested in blogging about your experiences let me know, as it would be great to have a Persimmon Homes buyer, assuming you go through with it.

Nik’s Experience | New Homes

Tony

CoolBeanz · 13th July 2009, 13:49

Thanks for your reply Tony.

I still like the idea of a brand new house, and if it was completed with no problems I would be over the moon. However, I have major doubts about this.

I should be exchanging in less than 3 weeks, and I haven't even instructed a solicitor yet (I have one ready, but need to answer my doubts first).

I think I'm going to construct a letter asking them to agree to the following:

+ completion no later than 6months after exchange (or my mortgage offer which is around the same time)
+ completion can only be after all initial snags to be resolved (snags identified by an independent company). I was going to use newbuildinspections.com or someone like that.
+ agree to a new price if the mortgage co down-value the property (before exchange when the mortgage offer is agreed).

If they agree to this, I would get my solicitor to put it all in legal terms.

However, they probably won't and I'll just walk away. In that case I shall say I'm happy to buy after it is constructed.

CoolBeanz · 13th July 2009, 13:51

Oh, and I forgot to add that I'm still looking at other houses (not new builds), although I think the spring bounce is over, so I'm in no hurry to do anything.

Tony · 13th July 2009, 14:06

What some people manage to do, and usually with small builders is to have a retention clause built into the contract. i.e. £5000 will be held back until all snagging works is complete. I do like new build too believe it or not.

Tony

drgl · 14th July 2009, 09:13

Ok, this is my story. £335k house(& they sodl for £340K last year!), they accepted £250K. They wanted us to exhange within 6 weeks and pay 50% of the options price(we have about £12k's worth of options-don't forget part of buying new is getting it how YOU want it!). Solicitor said they can ask what they like, we exchanged after about 3 months, paid 10% deposit and no of the options price. We still have no form completion date although it looks like August is likely. From a field to a nearly complete house has taken 4 months, however on a new development it isn't just your house that needs to be finished-it's ones next to you and the road etc. I think it comes down to the site manager-ours hasd been really good and has helped us with all kind of things. Good luck

ps, i knew there was something else(!)-our developer was willing to pay for a second mortgage valuation as we knew full well that the house wouldn't be ready in the draw down deadline of 3 months.

drgl · 14th July 2009, 09:16

Quote:

Originally Posted by CoolBeanz

+ agree to a new price if the mortgage co down-value the property (before exchange when the mortgage offer is agreed).

Even in this climate you have zero hope of achieving that IMO. Lots of mortgage valuations are coming in below market value to protect the lender against any further big falls.

CoolBeanz · 14th July 2009, 14:22

Quote:

Originally Posted by drgl

Even in this climate you have zero hope of achieving that IMO. Lots of mortgage valuations are coming in below market value to protect the lender against any further big falls.

If that's the case, then I won't be able to buy anyway. I have a 40% deposit, and have budgeted for all my furniture etc (I'm an FTB) so have little to play with. I'm not prepared to scrap my mortgage deal to get a deal with a 25% deposit as they are much more expensive, and it's the mega cheap deals (60% LTV) that are encouraging me to buy.

You have a massive discount from listed price, and I've only got 5% off. I think I've over paid by quite a bit, I'd be looking for another 10% off for me to buy.

Either way, I've put everything down in writing and sent it to the developer. If they tell me where to go, it's made my decision for me.

drgl · 14th July 2009, 14:29

Your problem is you have put a deposit down and are now trying to negotiate. You need to thrash the deal out before sticking any money down-no matter how small.

CoolBeanz · 14th July 2009, 14:39

I guess, but it's only £500. I'm willing to let that go now... call it an expensive lesson if I lose out.