My plan

LandyAndy

daverave7 wrote: »

Thanks all.

I have my solicitor looking into the pulling out part. Something I don't really want to do (from a personal level- it's closer to work and it would be great to live in this area whilst me and my partner are still young!) and I think we heve been a bit stitched up in our contract. The deposit is non-refundable and we are liable to costs incurred including any loss in value of the flat if the seller re-sells within the next 12 months. Could be more like 40K.

Why would he make much effort to achieve the best price with this to fall back on. He could let it go for 100k to recover his costs and come to you for the rest:eek: .

daverave7

LandyAndy wrote: »

Why would he make much effort to achieve the best price with this to fall back on. He could let it go for 100k to recover his costs and come to you for the rest:eek: .

Confuses me too! Actually says this in the contract. If the seller doesn't resell within 12 month does this mean I can get away from it for free?

Jorgan_2

daverave7 wrote: »

Confuses me too! Actually says this in the contract. If the seller doesn't resell within 12 month does this mean I can get away from it for free?

I doubt if you can get it for free, would be nice if you could. I can't find a link to the 90% I was referring to, but found this which states 75% had been sold to investors.

http://www.housepricecrash.co.uk/forum/lofiversion/index.php/t4613.html

'INVESTORS SNAP UP THREE OUT OF FOUR HOMES IN SA1 PROJECT


A Staggering three out of every four new homes being sold in Swansea's SA1 docklands scheme are going to investors, it has emerged. They are spending millions between them to buy up flats for future resale.

It means hard-pressed first-time house buyers are being squeezed out of the market for new homes.

A major agent acting for developers on some of the city's biggest projects today revealed 75 per cent of all their interest comes from investors rather than people looking to move into the properties themselves. Prices go from around £100,000 to close to £300,000. When finished the £200 million project will offer more than 1,000 new apartments and houses.

Today's revelation highlights the increasing interest of developers in the economic potential of Swansea but creates a further hurdle for many looking for their first property.

SA1 is the main focus area for the investors who are often buying two or even three properties at a time. But nearby St Thomas is also a hot spot, say experts.

Property company Knight Frank, which revealed the 75 per cent figure, is agent for many of the SA1 developments, as well as projects in the Marina's first phase and in Castle Buildings.

Spokesman Lauren Dawkins said today: "Our experience in Swansea so far is that most of our interest has been by investors.

"Swansea is perceived as the next hot-spot.

"Most of the developments are sold off-plan before they are even built, either to be rented or to be sold on. It is really a recognition of the confidence investors have in Swansea's potential."

However, one city property developer urged caution when interpreting the figures.

Paul Williams, director of property management company Flatfinders in Swansea, said: "In any project like this the developers are compelled to sell a proportion to investors off-plan, to help raise the money.

"By the time all the buildings are realised, I think there will be a lot more home owners living there. But for first-time buyers it is likely to be very difficult.

"Today a deposit could cost around £17,000, which they are unlikely to have and, even if they did, they would want to move in now and not wait two years for them to be completed."

James Hughes, a 26-year-old nurse who lives in a rented flat in The Grove, Uplands, Swansea, said he had hoped to buy in SA1 but added: "On my salary it is impossible.

"I did try for one scheme where the flats started at £95,000 but they were all gone by the time I joined the queue last autumn.'''

daverave7

Thanks again Jorgan! - some interesting stuff in there.

Any idea how investors normally pay for the appartments? Do they pay the full amount early (or maybe at a discount) or to they pay a 10 % deposit like me!?

The reason I ask is that theres probably around 40 % of these flats already on the market. Most have increased their asking price by about 20K. But there's one or two whose asking price is now 20 K less than the off plan price... If this is the case wouldn't it just be easier for the investor to pull out and lose a 10 % deposit - rather than resell at more than 10 % loss. Unless of course they paid the full whack inititally and completed before the flats are built.

This could be important to me as it implies that I face losing the whole of my 10 % deposit (20K) plus costs/diminution of price - IF I decide not to complete.

Jorgan_2

The majority of investors will have put down a deposit, with the balance paid on completion. Some will have already flipped the contract on to another buyer, so won't have anything to pay as they have made their money & got out.

As we don't know how the other investors have funded their purchases, its not really possible to speculate on what situation they maybe in.

With regards to your own situation, speak to a solicitor who understands contract law, they will be able to advise you of what is best for you, in your situation.

daverave7

Jorgan wrote: »

The majority of investors will have put down a deposit, with the balance paid on completion. Some will have already flipped the contract on to another buyer, so won't have anything to pay as they have made their money & got out.

As we don't know how the other investors have funded their purchases, its not really possible to speculate on what situation they maybe in.

With regards to your own situation, speak to a solicitor who understands contract law, they will be able to advise you of what is best for you, in your situation.

Im on the case speaking to my solicitor - the same solicitor that has our contracts since March 2006. However, i'm not sure how qualified or experienced they are in contract law. So I've asked another solicitor to have a look at the contract but they refused because it is already being looked at by our current solicitor.

So I think I'd have to change solicitors if I can't get much sense out of this one. Can anyone recommend a good contract solicitor preferably based in South Wales?

Thanks

daverave7

Jorgan wrote: »

The majority of investors will have put down a deposit, with the balance paid on completion.

A thought on this... The investors are probably in the same situation as me then- paid deposit but not completed. Why don't they pull out and lose their 10 % deposit? Or does this mean they have some confidence in the flats?

Jorgan_2

Do they only stand to loose 10%? You potentially stand to loose more than that, so why should they be any different? Some may have confidence in the properties & housing market, if they are in it for the long haul, say 10-20 years, they may actually see an increase in the value of the property.

SquatNow

What... you think you can sell it and just lose the deposit? It's an off-plan new build flat, it lost 25% of it's value the moment you moved in.

TBH you are now stuck there. You bought at/near the peak. You might be lucky and be able to sell it on for £150k using the extra £30k to pay off the negative equity, but it is unlikely.

City center new-build flats are taking massive losses, especially in "university towns" where thousands of new-build flats were sold off-plan to speculators on the back of the ability to rent to students, who, it turns out, couldn't afford to rent expensive city center flats.

I'm sorry you fell for the "City Center Living" con. In every house price boom there are winners, who sell just before the peak, and lossers, who buy just before the peak.

I'm sure the fact that you have made some billionaire land speulator somewhere a little bit richer will make you feel better.

silvercar

At least SA1 will be a nice area rather than a standard northern inner city development. At least the views will be of the marina rather than a shopping centre or other flats.

I would guess that Squatnow's comments apply to new build city flats in general and he has no specific knowledge of Swansea and the quote from housepricecrash is bound to be biased.

Personally I would phone up some of the more established estate agents in the area and pose as a potential buyer. Find out what price you would need to pay to get a flat similar to yours and review from there.

(Squatnow, someone needed your advice on a thread last night, if you cansearch in threads for your name, it should come up.)