Paid deposit for off-plan and cannot complete...HELP!

MX5huggy

The basic advantage is you set the price. At todays price. If prices are rising at 10% per year and it takes them 2 years to build the property you get it 20% cheeper than if you buy it when finished. Some people made alot of money buy just selling straight away.

The developers like to sell off plan because they can use the leverage to buy more plots etc etc

Then there was a cedit crunch or the light bulb moment

jamief

t1gger wrote: »

In an off topic and unhelpful manner, could I ask what the advantage is of buying off plan?

I don't understand how someone could commit to pay so much money for something they have never seen, there must be substantial advantages?

Sorry, newbie house buyer here

In a rising market is was a good idea. In a falling market where there is a likelihood that the builder may go into administration it is a terrible idea. A local firm went into administration recently and about 40 people lost deposits of £6000 each.

Premier_2

t1gger wrote: »

In an off topic and unhelpful manner, could I ask what the advantage is of buying off plan?

I don't understand how someone could commit to pay so much money for something they have never seen, there must be substantial advantages?

Sorry, newbie house buyer here

As you ask whaty the advantages are, rather than the disadvantages, I shall concentrate on some those in my response

1. There might be a discount for agreeing to buy as this assures the builder of a buyer when complete.
2. It secures the buyer a property/location they want.
3. It often allows the buyer to specify things they want in the property. This may simply be things like tiles, floor coverings, kitchen and bathroom style from a selected range, or dependant on the property allow some more drastic changes such as electrical & plumbing modifications or even possibly construction modifications.
4. As others say, it secures the property at the price agreed today.

Premier_2

jamief wrote: »

In a rising market is was a good idea. In a falling market where there is a likelihood that the builder may go into administration it is a terrible idea. A local firm went into administration recently and about 40 people lost deposits of £6000 each.

Sounds like 40 mad people that agreed pay £6000 as a reservation deposit to me! :eek:
Reservation deposits are typically only £100 - £1000.
Reservation deposits can be lost if any developer goes into administation, not just those who sell off-plan. In fact it could be argued it's more likely a developer that has houses built and not selling will go into administation that one that hasn't incurred any costs yet and is selling off plan. I've also known many a small developer go bust even in a rising market.

Miss_Shopsmart

Look at it this way.... if you bought off plan and prices massively shot up at a ridiculous pace and the property jumped in value you would be in a win situation and there is nothing the developer could do. They couldn't recoup the extra proffit.

It's like that with everything you can't buy rice and them claim a discount if the price goes down. Hopefully you can get out of it or use the late completion as justification to break the contract.

A lot of people are caught out now.

A friend of mine just lost his job - can't find another on a salary even close to what he had and his new house he moved into less than a four months ago (also new build bought off plan) is now in negative equity. Needless to say he is now on the brink of losing it. Some of the flats were supposed to be a key-worker scheme but have been rented out by the housing association to less than desirable neighbours. This as doubled the price drop with kids hanging on the corner selling crack and a really rough lot.

He is now getting a lawyer to look into it and see if anything can be done. It is worth a shot fighting!!

SouthCoast

A link to the Scottish Legal Aid Board site:

http://www.slab.org.uk/

t1gger

got it

off plan sounds like a builders dream. When buying a house I guess it's key to stay unattached and let your head rule your heart. I am sure I could not buy off plan but maybe my wife could, impulse buyer

58ghia

Another update for the benefit of others. We have been asked to appear in court for the full amount of £52000 for the resile of missive on a property.

I didn't want to publise the company but its different now. Scotia homes Links in Carnoustie.
The were given an £10,000,000 award by HBOS for winning a competition for building sustainable homes and quoted as changing the face of building in the North East of Scotland

theartfullodger

These fine gentlemen at

http://www.scotia-homes.co.uk/home/dev_home.asp?did=33


Hopefully the publicity will help them with their business in these troubled times...

Best wishes to anyone who ends up in court because a builder is chasing them for money. Not nice, not fair.

Artful

lynzpower

Good luck OP.