Thoughts on living in an apartment?

[Rave]

In this case Parm is in an extremely strong negotiation position as he's more or less a cash buyer and he's buying from a developer who is in the business of selling properties. They have no emotional attachment to the flat. He can make a very cheeky offer without much risk of alienating the seller.

[Saracen]

In this case Parm is in an extremely strong negotiation position as he's more or less a cash buyer and he's buying from a developer who is in the business of selling properties. They have no emotional attachment to the flat. He can make a very cheeky offer without much risk of alienating the seller.

Oh, indeed he can.

Thanks again for plenty more sound advice. I'm going to head back to the apartment sometime later this week and see if I can get a second parking space, and what the best possible price for the apartment would be.

Be careful how you go about finding out what the best price will be. If you just ask the developer, they'll give the the highest they think they can get away with. It might help your situation if you can get a feel for what's going on in the local market.

Some developers are starting to have a pretty torrid time of it. Mortgages are getting much harder to get, and more expensive for people when they do get them. Transaction volumes have fallen through the floor, and not looking like getting better any time soon. If the developers are finding it hard to shift stock, they may well be amenable to aggressive offers from someone with minimal mortgage issues.

That's probably the situation where I would (if I wasn't too worried about upsetting the developers) put in a cheeky offer. I'd maybe stress that I can go to your about maximum that doesn't involve mortgage at all, and stress that that simplifies things, keeps mortgage lenders out of the loop, etc. And I'd make sure the develop knew :-

1) I want the flat, but .....
2) I don't want it too badly
3) I'm still keeping my eyes open elsewhere, until I sign on the dotted line.
4) I think the market is falling and whatever I buy will be worth a maximum of 90% of current value in 12 months time.


Parm, if you haven't already, do some research on predictions from the major property sources, like major (Halifax, etc) building societies, council of mortgage lenders, Rightmove, etc. Find a few juicy stats to support that belief that prices will drop at least 10%. And what I mean is that you want the developer to believe that you believe at least a 10% drop is coming, maybe more, whether you actually believe that or not.

I'd be trying to get him to believe that :-

a) You're a really tasty prospect, just perfect for him and ripe for plucking
b) You're nervous about the state of the market, and might get away from him.

In other words, you want him drooling, but worried he might lose you. Maybe you'll stay out of the market. Maybe you'll stay with family for a few months (and even if that isn't a real prospect, he doesn't need to know that). In other words, do your best to prime him, to get him in the right mood psychologically ..... and don't ask him what his best price is, unless you're prepared to gasp, go pale and look like you're losing interest, before you hit him with your low-ball..

If you start low, you can go up. If you let him start high, it's much trickier to get it to go down.

And in relation to point 3), above, don't just try to let the developer get that impression - actually do that. If you can subtly let him see, perhaps, details from other developers or agents in your briefcase, you'll remove his ability to feel complacent.

Also, talk as much as you can to agents in the area, not just about property but about trends. How is the market? How are prices doing in your area. Obviously, you'll know what the worries are nationally, but how is the local market. And then you'll be able to echo that back at the developer.

Finally, if the intention is to let the place out in a year or so rather than sell, make sure you've done your homework on that, too. What costs will you incur? What are agency fees going to be? What happens if you have less than 100% occupancy? What are maintenance costs going to be? What are the tax implications?

Also, if the intention is to let out after a year, think about whether putting most of your capital into the rented place is a good move. If the result of that is that when you come to buy the house in a year or so, you have to have a large mortgage to get the house, you'll be minimising the chances to offset the finance costs on the rented property. I mean, if you have an investment property, you'll hopefully be facing capital Gains Tax issues in a few years when you sell. Check out how you can offset mortgage interest costs on that rented property against CGT, because you won't be able to offset mortgage interest costs on your personal home. So ..... if you have £120,000 tied up in the flat, and have to increase your mortgage on your home by £120,000 as a result, you can't offset the finance charges against CGT, but if the flat is mortgaged to the hilt and your private residence is therefore much less mortgaged .....

You could, of course, remortgage after a year when you buy the house ..... if the mortgage market at that time will let you. But you're likely to incur costs remortgaging that quickly, but lose out on the CGT relief if you don't. Either way, look into the implications and plan for it.

[Parm]

Major update!

I've had the thinking hat on all week and done a fair bit of research. I then went to see the builders yesterday, armed with a lot of helpful info from this thread (particularly Saracen's last post), and spent a good two hours with the two ladies in the sales office.

The asking price is 175k, we agreed a price of 150k - which, is exactly what I was aiming to get.

Spent a while getting everything how I want it, so I went away pretty happy. The apartment is due for completion in September, but the rest of the development should take a further 6 months or so. Which I'm happy with, the builders will still be there when we move in so any problems and I'll not have any difficulty finding them.

Anyhow, I left it at that yesterday but I'm going back today with the gf. Appointment's at 11:15, and the plan is to pick out our flooring etc, and then put down a deposit. Due to them agreeing a 150k price, I agreed to a 1k deposit with no refund available - I thought that was far.

So, to surmise, I should be buying the apartment in t-minus three hours. Getting a wee bit over excited but trying to remain calm!

[Kumagoro]

Have you had a look on rightmove using the firefox plugin property bee?

http://www.property-bee.com/

use the work in a bee function to see how the prices have changed in your area.

good luck to you.

[schmunk]

Have you had a look on rightmove using the firefox plugin property bee?

http://www.property-bee.com/

use the work in a bee function to see how the prices have changed in your area.

good luck to you.

I've installed this now, looks interesting!

[Kumagoro]

Did it show you the prices for dates before you visited the site? It seems like the
database sharing function doest update at the moment but I am not sure if the
central one dishes out the old data from when it was working.

Has anyone seen the barretts and wimpey share prices?

http://uk.finance.yahoo.com/q/bc?s=BDEV.L&t=1y

[schmunk]

Did it show you the prices for dates before you visited the site? It seems like the
database sharing function doest update at the moment but I am not sure if the
central one dishes out the old data from when it was working.

No, it didn't.

Has anyone seen the barretts and wimpey share prices?

http://uk.finance.yahoo.com/q/bc?s=BDEV.L&t=1y

Whoopsadaisies!

[Kumagoro]

It seems they had to change servers because of the database sharing thing. Hopefully
it will be back working in a couple of weeks then you will be able to see how much
properties have dropped.