Buying from plans.

E

evanne

Registered User
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Hi folks,
I'm sorry if this has already been covered but I was wondering if someone could shed some light on this for me.
A friend recently suggested that I should buy a house thats not been built yet, to give myself some time to get the deposit together. Is this possible??
There are houses around me for €200k. I don't have €20k (In fact my savings are zero). anyway my friend has suggested getting mortgage approval,and making an offer... and then saving the deposit whilst the house is being built.
Can this be done and how much would it cost.?
Thanks
 
You will usually have to pay a booking deposit of around €2-3k then the balance of 10%, in your case another €17-18k on signing of contracts which is usually within a month or 2. The advantage of buying off the plans is that you get the property at todays prices, assuming prices increase of course, if they were to decrease then you will have paid over the odds.

A big disadvantage of buying off the plans is that you do not see exactly what you are getting. You will see from various other threads where people thought they were getting a certain type of layout but in fact got something different and there was no comeback on the developer as it was written into their contract. One other thing, you cannot be certain about when it will be ready.

I hope this helps.

Christy
 
For our house (bought off plans & moved in last year) we only had to pay an overall deposit of €10k - less than 5% - think that's more common instead of paying 10%.
 
thanks for that Christy. Cahir I'm curious. when you say you only paid less than 5% (10k). Was that all in?? ie..after the 10k, you didn't have to put any money down?? Is this normal? Everyone I talk to says its 10% of the asking price...
Also on average, how long does it take for houses to be ready??
 
We paid a €1k booking deposit and then a further €4K at signing of contracts stage, the balance was then due on closing of the sale. We're fairly happy with the deal altogether. The €5K would reflect about 2% of the purchase price.

People don't realise that you can sometimes negotiate this deposit on signing of contracts and it pays to speak to the estate agent and your solicitor and find out what you can!
 
Don't be rushed into buying off the plans. This is a fairly risky strategy.

Are you sure you want to live in this particular property?
 
There was an article recently and I think it was in the Independant, where one of the journalists desribed how he had bought off plan in a city centre appartment block, paid the deposit, and by the time the appartments were finished the developer had changed his mind and decided to keep the appartments for himself, in order to rent them out.
Meanwhile, people who had been trying to get contracts exchanged etc were being fobbed off by the auctioneer, and missed out on other properties that had come on the market in that time frame.
 
Evanne,

We found the house in June 03 on a Saturday and paid €3000 booking deposit the following Tuesday. We signed the contracts a couple of weeks later and paid another €7000. We got a mortgage of just under 92% (wanted a nice round number!) so that meant that when we were closing (May 04) we had to have the mortgage and the balance which was another €10k - not part of the initial deposit.
 
Is it practice to have written into the contract a completion date and penalties if it is not completed by that date. I purchased a house off plan which is to be ready some time this month. Now due to a disagreement between the builder and the county council it will be delayed for a few months at least, with no definite date at all. At what stage can someone pull out without losing the deposit?
 
"Don't be rushed into buying off the plans. This is a fairly risky strategy."

Rainyday, why do you believe that this is such a risky strategy??

Is it because of possible hold ups and delays?? Surely you are just as likely to be messed about with a second hand house as a new house.
 
Just regarding deposits.

Put €3k down on booking for place in October. With €5k due on signing early November. Overall price was €277k due sometime next month when place is ready.

From what I'm hearing, the 10% is becoming more and more rare with new builds these days.
 
But the max a lender will give you is 92% so you will still have to come up with 8% of the purchase price whether it is a deposit or not. You will also need to come up with legal fees etc.
 
Wiggles said:
"Don't be rushed into buying off the plans. This is a fairly risky strategy."

Rainyday, why do you believe that this is such a risky strategy??

Is it because of possible hold ups and delays?? Surely you are just as likely to be messed about with a second hand house as a new house.
Click to expand...
Because first of all it is not clear if the original poster actually plans to live in this property. I've heard of people rushing into buying any property simply to 'get on the ladder' without really thinking through what is involved in managing a rental property, or reselling the property.
 
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