1st time buyer - feel misled on deal

kaa_3

sri you are absolutely right saying that you will be in negative equity immediately after your completion. I have been in your shoes a few months ago but managed to get my holding deposit back, without loosing a penny. Barratts are restricting you to use their mortgage brokers for the reason that they are giving you an incentive. This type of tactics are widely used by majority of the developers at the moment as all new builds are overpriced, also very often some lenders are refusing to deal with this type of offers as it is clear for them that they have to lend you more than the actual value of the property. Good on you that you have done your home work now, try to negotiate for your deposit to be returned or try to reduce a price by X amount.

Running_Horse

Get your deposit back if you can, then wait a few months for someone on the development to sell at the true value, saving yourself thousands in the process.

abinanthanb

Not all lenders will include the cash incentive provided by the Builders in the deposit; rather they will deduct the money from the total value of the property and from then they will calculate the deposit needed.

Buying a new build will most probably end up in loss unless someone is prepared to live in it for decades. The overhead cost to make it habitable (like carpets, turf in the garden, etc) will cost another 3-5K; This is usually not there if you buy a second hand home. For a FTB, new build is not a better choice.

sri

pinkshoes, here is the text on the reservation (Sep 25 is exchange and Oct end is the completion) - they have tried to contact me but I am just holding off.

"... reserve for us the above mentioned property at the price specified above until the 25th September 09 ... in consideration of which we have today paid to you the sum of £1000 ... and for which payment you will not sell the Property to any third party until after the that date if we not have exchanged contracts for the purchase of the property.

It is agreed that the reservation of the property shall lapse on the Reservation Expiry Date if we shall have failed by that date to exchange Contracts for the purchase of the property ... In that case you shall be entitled to retain the sum of £1000 from the deposit for administration costs."

In the signature section, there is a AUTHORISED ATTORNEY which has not been signed. Should an attorney sign such reservations or is it just a formality?

Does this mean that if I withdraw my offer before Sep 25th, I am entitled to my reservation fee? I am thinking of a recorded delivery withdrawing my offer to the sales office and the headoffice.

I have dropped all thoughts of re-negotiating however if I did, I will offer with another 10% reduction on the agreed price.

Will much appreciate further thoughts.

Thanks

Trollfever

Speak to Trading Standard/Consumer Direct:

http://www.consumerdirect.gov.uk/

DVardysShadow

pinkshoes wrote: »

... They only want you to use their broker so they can find out how much money you have, and then try and scam you with tempting sounding "deals".

Perish the thought. I think there is a professional standards issue coming up for some mortgage brokers here - and hopefully some revoked licences

kunekune

So if it is their fault that contacts aren't exchanged by the date it says, they still get to keep the holding deposit? Sheesh.

DeadCat

Running_Horse wrote: »

Get your deposit back if you can, then wait a few months for someone on the development to sell at the true value, saving yourself thousands in the process.

Nobody will sell in that development if they stand to make a loss, which they most probably will. More likely you will be able to pick up a cheap rental there in a few months.

GDB2222

Trollfever wrote: »

Speak to Trading Standard/Consumer Direct:

http://www.consumerdirect.gov.uk/

I can't see why people pay such large holding deposits, but what can trading standards do about it?

I'm curious about this process, as I've never bought a new house.

Kyrae

Hiya! We're also in the process of buying a Barratts home and at first we agreed to use their recommended broker, New Homes, but after problem after problem we've told Barratts that we want to use our own broker.

When we first enquired about the property we did as Barratts recommended and called New Homes to check that we could afford a mortgage, and they said yup fine no problems there's plenty of options with that size deposit and income, and quoted some options from various companies and the rates were good.

Month or so later, deposit paid, and New Homes send an advisor out to arrange our mortgage. He looks on his computer... and it says only one option... we say errr what about all the other ones quoted over the phone? Turns out they'd only quoted based on my partner buying the property on his own, when we had clearly stated I was unemployed at present and we wanted a joint mortgage based solely on his wage. We applied for the one option he gave, and were turned down. We also applied for life and critical illness insurance, and New Homes managed to screw up the application and put my partner down as working 0 hours when he has a full time job. As if that isn't bad enough, we've been charged a £99 fee by New Homes for giving us mortgage advice.

Things are looking up now, I found a job and there are plenty more mortgage options, but the moral of this story is... whatever Barratts say, find our own broker.