Reserving a plot on new development - can you still be gazumped?

moneybunny123

We have provisionally reserved a plot on a new development, but because the plot we want is so far into the development (it's not expected to be built for 12-18 months) they wont let us reserve it properly - what they've allowed us to do is pay £50 for what they call an "early bird". How this works is that when the plot DOES come up for release, they guarantee that we will be the first person they contact and we will be given first refusal to reserve. Assuming we're in a position to proceed (we should be as we plan to be living in rented accommodation) then we reserve it for a fee of £750 and the whole process starts.

However, what if other people express an interest in our plot in the meantime? Are the developers likely to tell us the price, but then knowing lots of other people are interested go to them telling them that the price is x plus, say, £10k? Or, similarly, if we reserve the plot properly for an agreed price, but then someone else comes along and says we'll give you what they're giving you plus 10k, will they allow that?

The last thing we want is to get involved in a bidding war for something that we've had our eye on for a year.

mrs-h_3

As far as i'm aware they will take as many early bird reservations as possible as the new build we are trying to buy had a raft of people that had paid little deposits of £50 to try and secure the plot. They then go through the file from first reservation and see who can proceed and take it from there. I suppose its difficult for the builder to give a complete price at present but some guide would be helpful as how do you realistically know you can get a mortgage etc for the required amount. Hope that helps a little

moneybunny123

Do you mean they'll take early bird reservations from more than one person on the same plot?! If so, that's really bad. We're sort of pinning all our hopes on getting this house - hence why we've sold our house now, and will be moving into rented for 12-18 months. If other people also have an early-bird on "our" plot, I would be devastated!

mrs-h_3

Each builder may be different but i know on our plot the sales lady showed me a few weeks ago a complete file of people that had all expressed interest in the same plot... could be scare tactics and maybe not everyone an early bird reservation but thats what we were shown. Which builder is it? If you are first you are first so as long as you can proceed there shouldn't be a problem should there. Is your deposit refundable as i saw it as a quick way to make cash from their point of view... We didn't pay an early bird reservation at all so i'm just curious

moneybunny123

The funny thing is, the early-bird reservation fee was £50 - payable by cheque - which they promised not to cash. My husband reckons that it was their way of sorting the wheat from the chaff - those that are NOT really interested won't hand a cheque over, but I'm not so sure. Surely if you're told it won't be cashed, what difference does it make?

brit1234

:exclamati Buying off plan 12-18 months in the future in a falling market is incredibly dangerous. :exclamati

There are lots of people here and in Ireland who signed up for off plan developments and then couldn't commit as they couldn't get a mortgage. This was due to the sale price was far higher than the mortgage valuation or they didn't want to over pay when houses all around were far cheaper.

The builders are suing people who have pulled out.

I wouldn't worry at all about being guzumped as that is for rising markets, however I would study the fine print of what you signed very carefully

mrs-h_3

is it persimmon by any chance? if they aren't going to cash it then why take a cheque anyway. Like you say to see who perhaps is serious or not... 12-18 months is a long time in a new build, and lots can happen. If you are very committed to buying this house then all you can do like us is try and jump through the hoops, and hope for the best!

moneybunny123

No, it's not persimmon. I daren't say who...

poppysarah

It's a bit extreme to get your heart set on a property not potentially going to be built for 18 months.

Go view some ones already built!

Or are you using the 18 months to save like mad so you have a deposit?

moneybunny123

Well, we definitely imagine we'll be able to save a hefty sum in the meantime. But the plot and location are both perfect - nothing else we've seen even comes close. Surely if it's going to be our "forever" house, then 18 months is nothing to wait?

poppysarah

moneybunny123 wrote: »

Well, we definitely imagine we'll be able to save a hefty some in the meantime. But the plot and location is just perfect - nothing else we've seen even comes close. Surely if it's going to be our "forever" house, then 18 months is nothing to wait?

I think you're mad... But if you could look at some existing houses in the mean time - just to confirm your beliefs maybe, then I'd be reassured you're not just a new-build-aholic.


How many houses have you looked at?