Is deposit on new build likely to be refundable if I pull out?

scarletjim

I agreed to buy a new build property back in July, and paid a depoit of £500 to (via?) the estate agent. Contracts have not been exchanged yet. If I pull out, am I likely to get that £500 back or not?

My solicitor has done some work on the purchase, and some searches have been completed, but this week another developer has contacted me saying they have changed their plans for a development that I looked at 3 months ago, and their new design possibly looks more suitable for me than the property I am currently purchasing. If I pull out, the solicitor and searches will cost me about £700, so I don't really want to be down by another £500. I don't want to just ask the EA if it is refundable, because surely they will just say no!

Anyone done this before and know what standard procedure is?

Btw it's not definite, I'm still 70% likely to go ahead with the current purchase, but would like to know where I stand anyway just in case...

tyllwyd

I'd be really surprised if it was refundable, but it depends on what the terms of the agreement were between you and the developer. What does the paperwork say?

theartfullodger

Doubt it very much it will be refundable... Read all that paperwork v carefully, some people on pulling out have been sued by builders & lost £10ks.....

evoke

The answer is NO.

billybraggtastic

theartfullodger wrote: »

Doubt it very much it will be refundable... Read all that paperwork v carefully, some people on pulling out have been sued by builders & lost £10ks.....

Having worked for a housing developer in the past, we worked with a Reservation Form which secured you the exclusive opportunity to purchase the property - I think this was a 2-4wk period in which you were expected to sign a missive/contract. Deposit was payable on Reservation and non-refundable if you did not withdraw within 7days. In some circumstances we allowed deposits to be transferred to another plot on the development if say you withdrew but then came back.

It is unlikely that the developer will come looking for £10ks unless you have signed the missive/contract. That is a binding contract to purchase and is full of clauses for the developer to seek losses, etc.

tleefox

No - absolutely not.

scarletjim

Ok thanks for all the replies. In a way I'm glad, as I would feel a bit guilty pulling out after all this time, so I'll think hard over the next 24hours and either continue, or be happy to give up the deposit.

geoffky

get the new developer to pay....simples

PinkKiwi

Forgive me if this sounds thick but why is the deposit so low?

mark5

PinkKiwi wrote: »

Forgive me if this sounds thick but why is the deposit so low?

Its not the deposit thats paid at exchange of contracts.

It's usually a non refundable fee you pay so that the builder holds the property for you and doesn't sell it to anyone else within an agreed time scale.

It was more relevant during the boom when developers could sell each house several times over.

robrymond

We were told the reservation fee was fully refundable if an application fell through, or you'd loose £100 of it if you pulled out yourself. That is Taylor Wimpey. Be interesting if others take the full amount and you loose everything!