A little while ago, my friend Ping Pong (Yes! That’s her nickname) invited me to join her on her new build house buying journey.
In this post, I’ll show you step-by-step these 10 easy tips which are guaranteed to save you thousands of pounds.
But, before we get started. Here is a little summary.
1- Practicing The Art Of Negotiation. It’s Not Fixed Price.
Right! after a million considerations. You have decided on the plot you wish to buy and set your eyes on it.
Here is what most people do. They’ll pick up the phone and make an appointment to reserve it.
This is the wrong approach.
Let me explain why.
To the British, our homes are not merely a place to live, it’s a place where memories are made and moments of joy shared with our loved ones.
Salespeople are well aware of the fact that when we decide on a specific plot, we create a strong emotional bond with it.
They know very well that, if already decided, they pretty much can seal the deal without offering much.
So instead of showing all our cards over the phone.
We practised the Stiff Lips Approach.
Once we were ready. We went to the sales office for a casual stroll and started looking at brochures, etc.
The salespeople approached offering help. We Inform them of our (might be) interest in a specific house type and affordability.
We observed as they tried to make a deal with us on the same day.
We asked them what is on offer. Remember if you don’t ask, you don’t get it.
They offered us an upgraded kitchen and carpets if she books the plot before the weekend.
Bear in mind, these things were not included in the original listing.
After receiving this offer, deep inside we were happy, but we tried something else (more on that below).
We asked to include full wall shower tiles as well. Which they refused. We walked away.
But all is not lost yet.
2- Part The Cart Technique Which Can Work Wonders.
If you have not already, try it.
Go to the website of your favourite high-end retailer. Sign in to your account.
Chose a random product and add it to the cart. Rather than completing the purchase, abandon the cart and close your browser.
You will notice that after a few hours, you will get an email reminder, often accompanied by a discount code or voucher.
Companies use this method to encourage you to complete the transaction.
If you think about it. By not buying on the same day. We used Part The Cart technique.
Guess what? It worked.
Next day we received a call offering us full wall shower tiles if we reserved the plot coming weekend.
Upgraded Kitchen, carpets and full tile shower walls worth thousands of pounds. Nice isn’t it?
We accepted the offer and proceeded with the plot reservation.
But beware! Stiff lips and Part The Cart hacks may not work in hot property market areas. So don’t leave it too late.
This was just the start. Here come the surprises.
3- Surprise Surprise. The Devil Is In The Detail.
Once we finished paying a thousand pounds in reservation fee and signed the reservation form.
Our gorgeous saleswomen Sophie handed us a big folder. It contained a treasure of documents.
- House type details.
- Plot number and specification.
- Floor plans,
- Design Plans.
- Full buying process and steps to completion.
Plus a dozen more.
But hidden amongst the rubble was was an A4 leaflet which stated,
“Congratulations! Your new house is a timber frame.”
It also included four reasons as to why a timber frame is the greatest gift of God to mother earth.
To be honest, it took us by surprise. The house looked like any other British home from the outside.
We were baffled. Thousands of questions descended upon our brains.
- What is the difference between timber frame and traditional house?
- Is Timber frame as sturdy and strong as a traditional house?
- Will we be able to secure a mortgage on it?
And a thousands other.
After doing plenty of online and offline research in the following weeks.
Ping Pong decided that timber frame is not for us and pulled out of the deal. She lost £100 in admin and £200 in valuation fee.
Needless to say, all the time and hard work we put in choosing the perfect home went to waste. All our dreams shattered.
What does this mean for you?
Always ask which built method company is using to construct houses before reservation. This will give you a clear idea of whether you want to proceed with the sale.
Sigh! We have to start all over again.
But as luck would have it. We found a better plot and a better deal.
It was on the same estate but built by different developers. The house was being built using traditional brick and mortar method.
We rinsed and repeated the first two hacks and reserved the plot.
The surprises didn’t stop there. But on the other hand. We took some wise decisions.
Bonus Tip. One in four house sales falls through in the UK. It’s a good idea to buy Homebuyer protection insurance. Which will cover your conveyancer and lawyers cost in case.
4- The Best Decision You Will Take For Your New Build.
Second time around.
Even though the plot reservation form came with details of lawyers, recommended by the developers to act on our behalf.
Still, we shopped around.
After getting a quote from multiple law firms.
Much to our surprise. The builders recommended by the lawyers turned out to be the cheapest.
Miracle, Isn’t it? But wait. If it is too good to be true it probably is.
When we received the instruction forms from those lawyers. There was an extra paper which we have to sign.
The paper stated that we were receiving a special discount.
Why? Because the law firm is being subsidised (our fee paid in part) by the property developers.
This raised the alarm bells. Why would the seller pay a part of our fee?
What’s in it for them? Will the lawyers have our best interest at heart?
Our scepticism had better of us, so we paid a little extra and went with our chosen lawyers.
This turned out to be the best decision we made.
Want to know why?
Here is the answer.
5-This Is The Best Date You Will Go On Your House Buying Journey.
Before we delve into detail. Let me tell you a little story.
When John reserved his plot. He was buzzing with excitement.
But It was not long before his dream turned into a nightmare.
The company he bought the house from failed to complete 13 months after an exchange of contracts.
The completion was originally due in 5-6 months.
Can you imagine the frustration? 13 months after paying thousands of pounds of his hard-earned cash in deposit and fees. He was still waiting.
Worst of all, he could not legally do anything about it.
Why? Because his lawyers made a simple mistake of not including a Long Stop Date in the contract.
So what exactly is a Long Stop Date?
It’s a date which compels the seller to hand over the complete house by a specific date. Or they have to face heavy penalties.
Without it, the house developers can delay your completion for an unspecified amount of time.
That’s why using our own lawyers was the best decision we made. Not only that, our lawyers included a long stop date. They also made checks others often miss.
In a nutshell, with lawyers, the cheap may not always be the best and can cost you a lot more in the long run.
This was the builders part of the story. Now a small mortgage warning.
6- The Obvious Which Is Not So Obvious During Mortgage Process.
If I tell you to shop around and compare different mortgages.
You will laugh at me. And yes you are right, it is not a hack. It is common sense.
So what’s the point?
The point is to avoid the brokers and lenders who will do a Hard Credit Check on your file at your comparison stage.
What exactly is the difference between a hard check and soft check?
In simple terms, whilst a soft check is relatively harmless. A hard check can affect your credit score in a negative way.
Too many hard checks on file can give lenders the impression that you are desperate for credit.
It may also give the wrong impression to lenders AI (artificial intelligence) bots that some banks may have already refused your application.
This may cause reputable high street banks with low-interest rates to refuse your application.
Leaving you at the mercy of high-interest-rate lenders.
So what’s the solution?
It is to ensure that you allow a hard check only by a lender which you have decided to buy from.
We did the same. We avoided hard checks and successfully got the mortgage.
Nevertheless, After Ping Pong’s mortgage was in place.
We were about to make this stupid mistake.
7- The Innocent Mistake Which May Result In Lender Withdrawing Their Mortgage Offer.
If I had a penny for every time I came across this innocent mistake.
I will have enough money to buy a two-week return holiday at a four-star hotel in the Caribbean.
You have done the hardest bit. Your mortgage letter is in your hand.
Now, this is what a lot of people do.
After the bank issues, the mortgage letter. Many people start planning on their interior design. Whilst waiting for the completion of their newbuilt.
They visit different showrooms, websites etc to get inspiration and plan the style of their dream home.
They may come across an irresistible sofa, wardrobe or any other furnishing.
Restrained by their finances or to avail that irresistible 0% no interest offer. They apply for a credit card, store card or finance card.
This may prove fatal at the time of completion.
Because, before the banks release the mortgage funds. Lenders will perform one final credit check on your file
AI (artificial intelligence) bots carry these checks. If they notice any hard credit checks on your file other than the lenders themselves.
Bots might assume that you are desperate for credit and your financial health is not in good order.
This may cause the automatic withdrawal of mortgage offer.
So, how can you avoid this?
Never apply for any credit or finance between your mortgage offer and completion. This might be for several months.
The next three hacks may seem small and insignificant.
But trust me, not only will they save you boatloads of money but years of headaches as well.
Keep on reading.
8- I Bet You Have Not Have Come Across This One Before.
“Love Thy Neighbour — But Don’t Pull Down Your Hedge.”
As the saying goes, you can change your friends but not your neighbours.
Not only that. You also cannot change the drainage system after they finish building the estate.
Especially if your neighbour’s rain and foul water drain pass through your property.
I bet you have not thought of this before.
Remember, if your neighbour’s drainage passes through your property. You can come across hosts of problems in the future. For example.
- Trouble getting permission for any extension. As your neighbours may have a valid objection.
- The neighbours may claim a right of way to your property based on that.
To avoid this. At the time of the reservation. Please ensure you go through the drainage maps of your property.
Also, ask the right drainage question from the development company.
Check this out.
Are you aware of the new build Fleecehold Scandal exposed by BBC?
9- You Have Been Told Your Property Is Freehold But.
According to recent legislation. The British government banned the sale of new homes as leasehold.
Leasehold was a trap used by housebuilders to hold unsuspecting buyers to a ransom.
Even though this was much welcome news for buyers of new homes.
The constructions companies have invented a new way of ripping off buyers. In the form of estate management fees.
Buyers call this practise Fleece Hold.
It works by companies telling buyers that councils are not willing to adopt the new housing estates.
Therefore, they will have to use a management company to look after green spaces.
So how do you NOT fall into this trap?
Here are a couple of things to look out for.
- These charges must not be extortionate.
- The fees are capped or are set by residents rather than the company.
And boom. It is time for that moment you have been waiting for months. Completion time.
10- Congratulations! You Got Your Keys. Is It All Done And Dusted?
Unfortunately, the answer to that is a big fat NO.
Once you get the keys to your new home. You will come across a plethora of problems.
These problems are called SNAGS.
They can be anything from minor issues eg incorrect flooring, leaking pipes, missing electrics. etc to major structural issues.
But don’t worry. Here is the good news.
All new homes come with a 10-year warranty.
There are three main providers of new home warranties.
- The National House-building Council (NHBC).
- Local Authority Building Control Warranty (LABC).
- Premier Guarantee. (PG)
These operate under the Consumer Code for Home Builders. The NHBC warranty is the most common, covering 80% of the new-build market.
Out of those 10 years, warranty. Builders take responsibility for the first two years.
In the start, you may spot the visible snags. But there are some which are invisible. For example, missing insulation.
So, it is very important that you use a professional snagging company.
This is to make sure all your snags are fixed at the start. And you don’t have to go through complex NHBC processes later on.
So here is a checklist of tips which can save you thousands of pounds.
You can either save this page for future or take a screenshot of these.
- Negotiate as your life depends upon it.
- Ask about the construction method before you reserve.
- Chose your own lawyer.
- Include long stop date in contract to avoid waiting for ages.
- Do not allow hard credit checks whilst comparing different mortgages.
- Do not apply for any credit, store cards or finance during the exchange of contract and completion period.
- Examine the drainage map of yourself and immediate neighbours.
- Point out any visible snags during your visits at different stages of the build.
- Research the management charges.
- Use a professional snagging company after completion.
- Buy Homebuyer protection insurance to cover conveyer and lawyers cost incase.
That’s all from me.
Which tip did you like the most?
Do you have any tips you can share with us?
Over to you!