buying off plan help

ro2778

I was looking at an off plan flat due for completion in about a year.

The unnegotiated value is 326k and they want 5k reserve then 30% reserve included within 28 days of placing the reserve, so that's 98k. A huge amount! My partner and I currently have 20k in cash and 40k in the value of our flat before selling / solicitors fees. Otherwise no debts except my student loan.

I really like the plans for this flat and think with some negotiation it would be a good buy but I just can't see a way to fund it. I asked if the memo of sale could be reduced to 15% and the sales guy said he'll ask and get back to me, but how do people do this? Or do people not do this, and is this just the realm of the wealthy developer or wealthy individuals that have massive cash reserves?

eddddy

These types of schemes are usually targeted at investors rather than typical 'owner/occupier' home buyers.

They are also much higher risk than normal property buying.

Essentially, you will be lending £98k to a developer which they will presumably use to build the property. (Although, if they're a dodgy developer, they could use the money for anything - paying an overdue tax bill, bonuses for the owners, etc)

And if the developer goes bust, you could lose the whole £98k. So it's not like a normal property purchase.

I imagine that anyone would want to investigate a developer fairly thoroughly, before lending them £98k.

ro2778

I've read a lot more into it since my post and totally agree!