Need advice on house I purchased that I'm not sure is a good idea

FrancieB

Hi Folks,

Need a little advice on a property i bought. I paid a 12k deposit on a 286k house last March. The house was to be ready in August 2008

The builder messed us about since day one and only last week we only got the call to snag it. Since then we had to move to a different house to rent because our lease was up. We had to take out a new lease in a new house. We have furniture and floors stored in everyones houses. Disaster!!!

Anyway, the 286k we agreed last March seems a lot more than the current price of houses.

Is it possible to get the builder to re negioiate the price or are we committed at this stage?

spockety

FrancieB wrote: »

Hi Folks,

Need a little advice on a property i bought. I paid a 12k deposit on a 286k house last March. The house was to be ready in August 2008

The builder messed us about since day one and only last week we only got the call to snag it. Since then we had to move to a different house to rent because our lease was up. We had to take out a new lease in a new house. We have furniture and floors stored in everyones houses. Disaster!!!

Anyway, the 286k we agreed last March seems a lot more than the current price of houses.

Is it possible to get the builder to re negioiate the price or are we committed at this stage?

Does the contract with your builder say the house would be ready in August 2008?;

godtabh

FrancieB wrote: »

Is it possible to get the builder to re negioiate the price or are we committed at this stage?

Why not speak to your soilcitor and/or the builder?

Caoimhín

It is certainly gone down in price more than €12,000. If you see what i am saying...

MysticalSoul

Not sure if possible to change price, but you can always ask them to renegotiate the price, and see what he says.

spockety

Caoimhín wrote: »

It is certainly gone down in price more than €12,000. If you see what i am saying...

I presume you're not advising that it's possible to just leave the 12,000 with the developer and walk away and assume that's grand that's that?

A contract was signed and the developer expects the buyer to fulfill their half of the bargain, i.e. hand him 298,000 Euro. If he completes the build of the house as per the contract, but the buyer doesn't hand over the 298,000, he can go after the buyer through the courts to get his money.

A contract is a contract.

godtabh

spockety wrote: »

A contract is a contract.

Only when it suits it appears some times

uncanny

FrancieB wrote: »

Anyway, the 286k we agreed last March seems a lot more than the current price of houses.

So what?

You signed a contract. Was there a clause in the contract that stated the market value could not go down or something?

Do you know what a contract is?

Are you over 18?

Victor

Has a contract been signed? What does it say?

FrancieB wrote: »

Is it possible to get the builder to re negioiate the price or are we committed at this stage?

Yes, it is possible to renegotiate, although I don't know how far you will get.

spockety wrote: »

Does the contract with your builder say the house would be ready in August 2008?;

Such things are often fuzzy.

spockety wrote: »

A contract was signed ..

Where does it say that?

FrancieB

Yes a contract was signed. Unfortunately this works in favor of the builder because he has 18 months to complete. So on that basis I cant back out.

Do you think the price would have dropped more than 12k? I keep hearing that house prices are falling but it must only apply to second hand homes. From looking at websites like Daft etc new homes dont appear to be dropping in price.

Just to note I am very keen to proceed, I just dont want to be ripped off

FrancieB

spockety wrote: »

I presume you're not advising that it's possible to just leave the 12,000 with the developer and walk away and assume that's grand that's that?

A contract was signed and the developer expects the buyer to fulfill their half of the bargain, i.e. hand him 298,000 Euro. If he completes the build of the house as per the contract, but the buyer doesn't hand over the 298,000, he can go after the buyer through the courts to get his money.

A contract is a contract.

So you mean if i backed out and let the builder keep my deposit, he could actually come after me for the rest? Are you familair with the expression....you cant take feathers from a frog? On a serious note though, I spoke with my solicitor about that and he has advised that such a thing would never happen

FrancieB

uncanny wrote: »

So what?

You signed a contract. Was there a clause in the contract that stated the market value could not go down or something?

Do you know what a contract is?

Are you over 18?

Am i over 18? What difference does that make?

am i bovvered

Hi Francis,
The fact is the property is worth less than the 12k deposit.
In my opinion whether you should preceed or not depends on a few factors,
* can you stomach walking away from the 12k
* how long you are prepared the live there

My advice would be to try to cut a deal with the builder, he wants you and probably needs you to complete, call him direct tell him you can only secure a mortgage for X and offer him that, take it from there.

FrancieB

am i bovvered wrote: »

Hi Francis,
The fact is the property is worth less than the 12k deposit.
In my opinion whether you should preceed or not depends on a few factors,
* can you stomach walking away from the 12k
* how long you are prepared the live there

My advice would be to try to cut a deal with the builder, he wants you and probably needs you to complete, call him direct tell him you can only secure a mortgage for X and offer him that, take it from there.

You mean contact the building firm (big outift) directly or through my solicitor?

I would really hate to lose the money plus i love the house but the question is, would i get a better deal elsewhere?

I'd be prepared to lose the 12k if i could buy another house for 20 or 30k less

Craft25

look you bought at the worst time and have no doubt lost a fortune in equity.. so, what are ya gonna do, everyones in the same boat!!

if you were buying the house for long term purposes then you should really just grin and bear it, what's the difference what it's worth now if you're not gonna sell for years?

yes the builder probably layed off 90% of his workers and is completing the job with a skeleton crew over a longer period than he originally planned.. he's passed on a bit of the brunt to you but i dont think he's 'ripped you off'... he's just trying to spread his resources like everyone else

am i bovvered

Its hard to give advice without knowing the property, area etc. You need research that yourself, do the figures. like I said if this is a family home and you see yourself living there for a long time,and you love this house, through your solicitor put a lower offer in, worst case they refuse.
Have you considered the fact that this slump has meant that interest rates are significantly less which will save you alot of money too.

FrancieB

Thanks for the advise. I'll put in an offer lower than the agreed price.

My mortgage has lapsed also. The bank might want to revalue the house again when i re apply. What would happen if they were to find the house is worth less than the agreed price?

Victor

FrancieB wrote: »

Thanks for the advise. I'll put in an offer lower than the agreed price.

My mortgage has lapsed also. The bank might want to revalue the house again when i re apply. What would happen if they were to find the house is worth less than the agreed price?

They are likely to restrict the loan to the revised valuation or even only a percentage of the revised valuation.

Here, you may be lucky as most contracts are subject to loan approval.

FrancieB

I wouldnt be too confident about that. My solicitor would have mentioned that if it were the case.

I will call him again and confirm this

am i bovvered

Sorry, I thought you had loan approval for the origional amount.
Your first move should be to contact the bank ASAP, there is no point doing anything until you know how much money you can offer.

Here, you may be lucky as most contracts are subject to loan approval.
Today 20:31

Check the contract, if this is so the ball is totally in your court

ntlbell

FrancieB wrote: »

Thanks for the advise. I'll put in an offer lower than the agreed price.

My mortgage has lapsed also. The bank might want to revalue the house again when i re apply. What would happen if they were to find the house is worth less than the agreed price?

if the price had increased by 80k would you give the developer 80k?

would you be happy if he raised his price by 80k?

contact your solicitor and see where you stand.

everyone wanted to go to the party no one wants to stay and clean up

spockety

FrancieB wrote: »

So you mean if i backed out and let the builder keep my deposit, he could actually come after me for the rest? Are you familair with the expression....you cant take feathers from a frog? On a serious note though, I spoke with my solicitor about that and he has advised that such a thing would never happen

:eek:

On a serious note, are you familiar with the cartoon character, Lionel Hutz, attorney at law?

FrancieB

spockety wrote: »

:eek:

On a serious note, are you familiar with the cartoon character, Lionel Hutz, attorney at law?

On a serious note..No Im not. Are you?

FrancieB

ntlbell wrote: »

if the price had increased by 80k would you give the developer 80k?

Yes i would give him 80k if he agreed to accepting 206k less than agreed price.

would you be happy if he raised his price by 80k?
If he raised it by 80k i wouldn not be happy at all.

contact your solicitor and see where you stand.
I intend to

everyone wanted to go to the party no one wants to stay and clean up

Nonsense. I have stated I want to proceed. If he agrees we have a deal. If not its the easiest 12k he'll ever make. He can sell the house on for a resonable price. If not he can knock it. It probably didnt cost much more than 12k to build it in the first place...

astrofool

FrancieB wrote: »

If not he can knock it. It probably didnt cost much more than 12k to build it in the first place...

You have great faith in the property you agreed to purchase over decades of repayments.

FrancieB

I sure have. Not much point in purchasing the house otherwise

Ste.phen

FrancieB wrote: »

It probably didnt cost much more than 12k to build it in the first place...

So why did you agree to pay 286k?

daheff

FrancieB wrote: »

It probably didnt cost much more than 12k to build it in the first place...

do you really think so? Is it made from cardboard? 12K wouldnt build much of a house tbh

Makes you wonder how many people in total are in the same boat as this lad.

By which I mean hasn't a clue and might well end up ruining themselves financially because of it.

EnoughSaid

FrancieB wrote: »

Do you think the price would have dropped more than 12k? I keep hearing that house prices are falling but it must only apply to second hand homes. From looking at websites like Daft etc new homes dont appear to be dropping in price.

This is a very naieve sweeping statement. Of course the prices of new properties have fallen! Too many new properties have been built and thousands of them are lying empty. The only way builders will be able to shift them is to reduce the price. There is a good chance that many of them will only sell with huge reductions in price (30 to 40%). The prices on daft are the asking prices, not the selling prices!
In your situation, you need to find out how much mortgage you will be approved for. It will be a lot less than you would have got last year and the bank is likely only to give you a maximum of about 80% of the new valuation.

You also entered the contract at a very bad time...just after the peak of the market. Many commentators over at the www.thepropertypin.ie had been predicting big house price falls for about two years before you signed the contract.

FrancieB

Hi enoughsaid. Thanks for the genuine advice. A lot of smart ass's around here it would appear.

Getting the money from bank isn't the problem. If I can only obtain 80%, thats not a problem neither.

I have contacted the builder today and have being advised that the agreed price is not negioatable.

I will have decided that I will let him keep my 12k. This is extrmely annoying but I have another house in mind and if the price is right I'll be better off in the long run.