MattN

I've just reserved a plot on a new build and will be exchaning contracts in a couple of weeks.

Someone 'down the pub' said on exchange as it's a new build i only have to pay a 5% deposit at exchange even though my actual deposit I am putting down will be more than this.

Is he right?

It kind of makes sense, as long as my 'full' deposit and mortgage are with my solicitor in time for completion. The sellers don't care where the funds come from to complete the sale.

Matt

fast bloke

usually a nominal amount to show you aren't taking the ****. - 5% at exchange seems a bit stiff. Once you exchange you can't back out, but most people need the equity in their own house to be released on completion to fund the deposit. The seller/ builder don't care as long as they get the money on completion day

MattN

thanks!

P1-Brad

Most developers actually want 10% at exchange of contracts (i.e. within 4-weeks of reserving the plot). A bit of negotiation and you should pay 5% and they'll 'pay' the remaining 5%.

I'd be expecting AT LEAST a 5% discount on a new build list price, based on experience. Up to 15% in today's market isn't unreasonable.

Bradders

Milamber

iTrader: (2)

Aaahhh the well known "Stella" law degree. Obviously more pursuasive than my real one....

TonyFlow

LOL, the wife gets exactly the same treatment from clients - funny how everyone has their own "correct" take on the law!

MattN

didn't get anywhere near 15% off list. More like 3%.

Some off the new builds we looked at were offering about 10-15% off but the one we wanted wouldn't go anywhere near that. Given that most of the plots were sold, and, the this was phase 2 of the development, we checked some of phase 1's prices, same property sold for 5% more than what we are paying.

It's a nice place a bit different and we like it so I don't mind paying what i am.

richardg

most developers will want 10%. usually if you were going to put down less you'd negotiate this before reserving.

some developers build discounts into their pricing - ie up their asking prices by 5% or more to enable them to offer "discounts". some don't. there is no rule here; it's just a matter of negotiation as some developers are more able to move on their asking prices than others

alcazar

iTrader: (2)

Ah ...........it's up north then?

Alcazar

MattN

If Hampshire is up north then yes up north, if not it's down south

GCollier

The amount of money you leave as deposit upon exchange is the amount the seller is happy to accept. You could in theory exchange contracts with zero deposit, but I doubt many sellers would be happy with that, as it puts them in a position of considerable risk. 10% of the purchase price is the amount you would forfeit or be sued for if you failed to complete the purchase.

Gary.

sti-04!!

On my house at the moment, the builder wanted 5% when contracts were exchanged, i paid that as they were going to pay the other 5%, suited me at the time

Newbie123

I exchanged on my new build property last month ( house isn't ready until April/May).

The builder wanted a 5% deposit on exchange, but because I was a first time buyer as part of the deal they are paying my 5% deposit, so I had nothing to pay. Which was nice