Buyers lose 99% of €20,000 deposit as developer collapses

D3PO

El Stuntman wrote: »

this is a good thing

1. 40/35/30 year mortgages were financial suicide
   
2. 100% mortgages were financial suicide
   
3. borrowing your 'deposit' from the Bank of Dad or the Credit Union was financial suicide
   
4. buying a home at 8*your annual income was financial suicide

in the long run, these people have dodged a massive bullet

30 or 35 year mortgages are not financial suacide thats a little OTT

100% mortgages totally agree

borrowing a deposit also silly agree

8 x your annual income is subjective in the case of high earners its not that much of an issue as your disposable income is fine but the lower down you get the more insane it is. So in the most part its a bad idea but there are circumstances where its not a financial problem

NewFrockTuesday

I agree. To expect an across the board collective sigh of relief is not reasonable. Even if they were not to have another mortgage, the loss of a prospective home is not something to be taken lightly. Emotion is involved like it or not, thats the way it is. To be a fiscal stone when investing in a home is not something Im familar with. I boought my home because I liked it and was tired of moving around and had worked very hard for it. If someone had taken away my opportunity to purchase it and I found myseld unable to gather the deposit or having to wait years before I could buy something of my own again - assuming the bank will look at me given age etc then to say I would be feeling let down by the law and the protection it afforded me would be an understatement!


I cant believe there was no safety net for them.


Smccarrick, your posts always scare me when I red them! I studiously avoid all thought of bankrupcy and you burst my bubble every time! Im going to ave to put you on ignore

El Stuntman

JJJJNR wrote: »

Yup there was also one in Sweden but they seemed to do ok.

pffft, they only had a run-up of 200%

ours was over 700%

try again

MaxFlower

D3PO wrote: »

In this case I suggest you never buy property. If you cant remove emotion from financial acumen you shouldnt be a home owner.

Buying a home is as much (if not more) about emotions as it is about the financial side of things. I think you are looking at this from a purely monetarey point of view and as such are talking about houses as investments.

dearg lady

well if they had a 100% mortgage, the 20k would have been part of it and the mortgage would have been technically 'drawn down' already, though not the full amount. I know we were a year from date of approval to purchase and we didn't have to re-apply.

I would assume they would have been saving also, but not everyone necessarily would save!

NewFrockTuesday

D3PO wrote: »

30 or 35 year mortgages are not financial suacide thats a little OTT

100% mortgages totally agree

borrowing a deposit also silly agree

8 x your annual income is subjective in the case of high earners its not that much of an issue as your disposable income is fine but the lower down you get the more insane it is. So in the most part its a bad idea but there are circumstances where its not a financial problem

30 or 35 year mortgages are the norm here now no? We live longer, work longer and live better. 100% mortgages allowed people to buy who normally wouldnt be able to. I agree that if you cant save the deposit, then you probably shouldnt be looking at a mortgage. Stamp duty is a killer too - and fuelled the need for 100% mortgages. Were there not mortgages for 110% in the UK? I know of one lady and her husband bough a house and his father who worked in a bank approved them for a loan to buy another. They are now in the mire big time and its causing alot of trouble in the family with resentment. He blames his father like it wasnt his own greed and how would his father see this coming?


Will any bank lend x8 your wage? When I got my first mortgage, I was bewildered that tey would give me so a huge ammount of money It was terrifying altogeather!

ntlbell

JJJJNR wrote: »

It took me and my wife years to build up our 10% deposit, I really feel for those people.

I feel lucky that I bought when I did when there was little risk involved.

Its really evil the way some people are looking down their nose at this.

who's looking down on anyone?

stop talking utter nonsense.

ntlbell

JJJJNR wrote: »

I'm sure we all agree that there should be an up turn in property prices at some stage.

I think the negative equity brigade on here should realise this.

but if the place can be bought now for 250k saving of 150K + 100k+ interest payments

they lose 20k gin 250k

they would not have recouped 250k

D3PO

Deepsense wrote: »

Will any bank lend x8 your wage? When I got my first mortgage, I was bewildered that tey would give me so a huge ammount of money It was terrifying altogeather!

not now they wont thats for sure

Gurgle

ntlbell wrote: »

but if the place can be bought now for 250k saving of 150K + 100k+ interest payments

they lose 20k gin 250k

they would not have recouped 250k

^^ But they've lost €20k and gained nothing.

Surely if you put a deposit on a house then want to back out of the purchase then you just lose your deposit.

Is that not what a deposit is for?

btw, where did the price of €400k come from?
Its not mentioned in the article.

Sounds a bit OTT for apartments in Santry / Carrickmines even at peak times - neither is a particularly 'sought after' location.

ronbyrne2005

I remember watching the queues outside this development to put the deposits down. Theres similar apartemnts in area for half price now. House prices will not be back to 2006 levels in real or nominal terms during next several decades. Too many things wrong with our economy and society and this was an asset bubble that governments will try to avoid in future at all times.

ntlbell

Gurgle wrote: »

^^ But they've lost €20k and gained nothing.

Surely if you put a deposit on a house then want to back out of the purchase then you just lose your deposit.

Is that not what a deposit is for?

btw, where did the price of €400k come from?
Its not mentioned in the article.

Sounds a bit OTT for apartments in Santry / Carrickmines even at peak times - neither is a particularly 'sought after' location.

if they buy the same property today or down the road at a huge saving they are saving capital payment's and interest payments.

so in the long run there in a much better position

how many times does the same thing have to be said to you?

i thought someone mentioned they were 400k in this thread if not i pulled it out of my backside

punchestown

ronbyrne2005 wrote: »

this was an asset bubble that governments will try to avoid in future at all times.

But will they? The Uk never learned lessons from its housing bubble of the early 90's and are in a sorry predicament like ourselves. Fianna Fail have always been the party of the landowner. Whilst they remain in power I cant see their attitude towards landowners/developers changing whatever spin they may put on projects like NAMA.

In relation to the loss of deposit. Hypothetically, say Builder B comes along tommorrow, buys out the developer behind these developments and promises to resume completion of the developments as per agreed contracts. No deposit is lost and buyers have to make good their side of the bargain and complete purchase as per agreed purchase price (peak of the bubble) Would the same people so up in arms over the loss of deposit be so happy to see their deposit money saved?

D3PO

punchestown wrote: »

. Hypothetically, say Builder B comes along tommorrow, buys out the developer behind these developments and promises to resume completion of the developments as per agreed contracts. No deposit is lost and buyers have to make good their side of the bargain and complete purchase as per agreed purchase price (peak of the bubble) Would the same people so up in arms over the loss of deposit be so happy to see their deposit money saved?

Cant happen they have no contract with builder B so the only thing that would happen in this hypothetical would be that they would have the option to buy from builder B or as a liability taken on by builder B they would be entitled to their money back as then creditors of builder B

punchestown

D3PO wrote: »

Cant happen they have no contract with builder B so the only thing that would happen in this hypothetical would be that they would have the option to buy from builder B or as a liability taken on by builder B they would be entitled to their money back as then creditors of builder B

Hypothetically i.e. Something taken to be true for the purpose of argument

D3PO

punchestown wrote: »

Hypothetically i.e. Something taken to be true for the purpose of argument

Hypothetically - highly conjectural, not supported by evidence, a possible scenario.

As this wouldnt be a factual scenario Im pointing out it cant be a hypothetical one

havana

ronbyrne2005 wrote: »

Theres similar apartemnts in area for half price now. House prices will not be back to 2006 levels in real or nominal terms during next several decades.

I am currently closing on a property
that is less than the first property i bought in 2003. It's fairly similiar, in the same general area but in my opinion a better property, better finish and more included for the price.

bangersandmash

Gurgle wrote: »

btw, where did the price of €400k come from?
Its not mentioned in the article.

Sounds a bit OTT for apartments in Santry / Carrickmines even at peak times - neither is a particularly 'sought after' location.

Sounds OTT now, but that's what they were being marketed at in 2006.

Price: two-bed apartments from 375,000, two-bed duplexes from 415,000

https://www.tribune.ie/archive/article/2006/may/07/milners-square-in-santry-for-your-convenience/

On offer are one-bedroom apartments measuring between 42 and 45 square metres, priced from €365,000, while the two-bedroom apartments are available from €490,000 with between 59 and 83 square metres of accommodation. There is also a small number of three-bedroom apartments on offer, which cost from €595,000 and extend to 95 square metres.

http://archives.tcm.ie/businesspost/2006/09/17/story17195.asp

El Stuntman

ntlbell wrote: »

i thought someone mentioned they were 400k in this thread if not i pulled it out of my backside

no you were spot on, a little low perhaps but what's 15 grand between friends?

bangersandmash wrote: »

An as El Stuntman pointed out, some of the potential buyers will find themselves in a better financial situation in the long run. Consider that two-bed duplexes here were 415k. You could buy a proper semi-d in the same area for that price now.

edit: damn you bangersandmash, you were too quick for me!

Jo King

Gurgle wrote: »

^^ But they've lost €20k and gained nothing.

Surely if you put a deposit on a house then want to back out of the purchase then you just lose your deposit.

Is that not what a deposit is for?

If you contract to buy a property and do not complete loss of deposit is the minimum penalty. You can also be sued for the difference if the property has to be sold at a lower price within a year.

The deposit in this case was a booking deposit. It had no legal standing. These people were not contracted to buy these properties. If the builder had refunded the 20K and sold the properties at a higher price they could have done nothing. Equally they could have asked for their 20k back at any time after paying it and they would have been entitled to it.

The reason for the booking deposit is just to show bona fides and in the case where it is paid to an EA to secure his fees.

whizzbang

I believe that some of the apartments in the development were finished. I'm sure those occupants would be more than happy to sell their properties to one of these unfortunates for the 2006 asking price - 15k to cover the lost deposit.

The people would get their property at the price they had previously agreed to pay without having to fork out the 15k again! Do you think any of them would go for it?

El Stuntman

whizzbang wrote: »

I believe that some of the apartments in the development were finished. I'm sure those occupants would be more than happy to sell their properties to one of these unfortunates for the 2006 asking price - 15k to cover the lost deposit.

The people would get their property at the price they had previously agreed to pay without having to fork out the 15k again! Do you think any of them would go for it?

maybe you should ring up the Joe Duffy show and suggest it there :pac:

The_Conductor

There obviously is a seismic difference of opinion on this.

Yes- people lost deposits. However- had they signed contracts to purchase the property- the deposit is surely the least of their worries. The contract has a negative value far greater than the deposit could possibly be.

So- we have the every cloud has a silver lining train of thought- versus- the indignant- you've run off with my 15-20k train of thought.

Personally I'd be relieved as hell to have gotten out of the contract- given the number of people who are being dragged up to the commercial court (over 40 last week alone) to comply with contracts. It used to be the case that you'd get out of the contract without any hassle- those days are long gone- and believe you me- the developers interests are represented in the contracts- not the buyers........

On that note- thread closed.