Can we get out deposit back and pull out of buying apartment.
- Thread starter rondon
- Start date
Things are tight? wouldnt exactly say that but there is that point of negitive equity and a recession, job losses etc. im thinking of our future here and whats best long term. At the time ok it seemed like a good idea as its our first house/apartment. Have you ever been in that situation??
If the prices were going up so be it, the point is they didnt, why should he drop the price? for starters maybe he could sell a few more and start to build them.
We want out as we cant afford to hang on past the date they told us it would be ready. Early/spring 09.Why should we be bound to that if its not ready on time? i wonder if the builders will ever "accept responsibility for their own bad decisions"
Save yourself a lot of hassle and lose your deposit. If you want to avoid negative equity which could be a lot more than 8K even if the builder was prepared to drop his price then walking away a losing your deposit in my opinion would buffer you from negative equity. Although you'd have to live with the loss of 8k, lets assume the builder agreed a price of 100k for the property today and you buy it and next year house prices (hypothetically) drop a further 20% who knows? ... then you are in negative equity of 20k.
Just my point of view if I was in your position. If indeed the builder was prepared to go to court to enforce the contract then you could also face hefty legal costs.
Just my point of view if I was in your position. If indeed the builder was prepared to go to court to enforce the contract then you could also face hefty legal costs.
Thanks again for the decent reply, few people out there with fair enough their own opinions, but ones best kept to themselves. Anyway, yeh id rather lose the €8000 in fairness, but as you said they might look into taking us to court if we walk away. The other side of it all tho is the building looks like its a fair bit down the road from even been started on the site. They are obviously not selling them, hopefully stays that way because im sure im not the only person wanting out of it.
It would appear that the bigger and the worse the decision, the greater the chance there is that you won't have to accept any responsibility or just say "yes I was wrong (or We're broke)" and walk away with a golden handshake or a state-backed guarantee.
If OP were a big-deal banker or highly-placed State employee, the builder would have to pay for him not to finalise the contract.
We have a country of laws (and lawyers) but little justice.
I suggest cutting your (potential) losses and losing the deposit - if the developer experiences enough non-completions, it is unlikely they will be in a position to chase all of them.
I thought there were plenty of threads recently explaining that you need a valid reason to pull out of a contract. Negative equity doesnt seem to be one of these reasons. Personally I dont understand why the OP doesnt have a valid reason ..... the house isnt even started yet !? But by the sounds of previous threads, this means nothing in the eyes of the law. I dont understand it. If you ordered a brand new car for Jan 1st, signed contracts etc, the majority wouldnt be happy to wait until June the following year to receive it would they ?
Are you saying that you only want opinions that you will like. Other posters have made a very valid point that you and you alone signed the contract, nobody forced a gun to your head. What about the builder who has borrowed to purchase the land and the building costs. He still has to pay them back. I'm curious when you signed the contracts did it occur to you that the value might drop, did you realise this? As for your point about building not having commenced and unlikely to be ready by Spring, I think you'll find if you check the contract the builder has a get out clause on that. Did you read the contract?
The OP posted looking for specific advice and that is what he was interested in not a lecture on market forces, having your cake and eating it etc. Yes the builder may cost issues and let him post with his queries if thats the case, but its the OP we are concerned with here.
Its not a valid point atall two of us signed the contract, and yes i read the contract to the best of my ability with my solicitor.Negitive equity is a horrible situation to be in and knowing you might be walking into it i think is harder starting off than what it would of been if we were settled in and then the prices dropped as we would be paying off what we would of payed for.
The building costs??? well at the moment i think that might be at a very high level of ehh €0
Is it fair in your eyes if the builder did happen to hold out for another year or more before building starts or pulls the plug on it, we should lose our money??
The new 09 car quote is a small one, but it makes an awfull lot of sense to me.
MentalNote
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Negative equity is not something you will have to worry about. The simple reality is that the bank won't lend you the money to pay the full contracted cost if the valuation comes in under it.
If the bank won't lend you the money then you could plead inability to pay with the builder (I think that is the angle you should take) and walk away with just the loss of your deposit. I don't think any one here can say how the builder will handle this, he may or may not come after you. I'd say get your solicitor to try and negotiate it with the builder. It's likely that if he hasn't started to build yet he may be happy enough to walk away at this stage, although I'd be shocked if he gave back the deposit. I think a lot of developers simply don't have the money to do this (through their business anyway, what ever about the profits they made over the years).
I hope I'm wrong, but due to the number of people hoping to pull out of contracts, the developers may have no choice but to persue enforcement of these contract & investors will be the ones they will most likely persue.
There is no point in them persuing first time buyers as they typically have no assets. It will probably be the investors they will go after as they normally have other assets.
There is no point in saying to the OP "you should have anticipated things couldn't have gone on the way they did" as hindsight is a wonderful thing. There are 1000's of people caught in this limbo-land, must be very hard to sign for a property that you KNOW is worth less than you paid for it.
By the way OP, do bear in mind that the developer will have costs, even if they haven't started to build - land cost, interest, architech fees etc. Your best bet is that he will settle for you walking away from the deposit.
There is no point in them persuing first time buyers as they typically have no assets. It will probably be the investors they will go after as they normally have other assets.
There is no point in saying to the OP "you should have anticipated things couldn't have gone on the way they did" as hindsight is a wonderful thing. There are 1000's of people caught in this limbo-land, must be very hard to sign for a property that you KNOW is worth less than you paid for it.
By the way OP, do bear in mind that the developer will have costs, even if they haven't started to build - land cost, interest, architech fees etc. Your best bet is that he will settle for you walking away from the deposit.
I was not attacking you in case you think that, I'm just wondering what possessed you to sign for something without thinking through the repercussions if you would no longer be able to afford it. You've received plenty of suggestions of how to deal with the builder to which I cannot add anything so there is no point repeating. If you read other posts I've done you'll see that I think these contracts are too much in favour of the builder but people have to take some responsibility too.
Cashstrapped
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Just wondering if this builder is building 3 bed houses with gardens like what you are comparing to? If so could you not transfer the deposit onto a 3 bed, that way you get what you are looking for albeit in negative equity for the time being but if you can make the house your home perhaps you might not feel so agreived by the whole process.
I've heard recently where someone who was in a similar situation to you but had put down €45k as a deposit (upmarket estate) was trying to get out of the purchase as the builder went bankrupt, however the liquidators kept the workers on site and completed the houses/ appts and sold them for over 200k less that what they were originally sold for. This lad was happy to loose the €45k but the liquidators (or their representatives) are bringing him to court for breaking the contract and looking for him to pay the difference between what they eventually sold the unit for and the contract price and he's been told he will do very well to win that one out.
Again check out your contract as alot of time there are clauses within them where if the house/appt is not completed within specified time them there is a reduction in the price to be paid, not sure of the correct termonolgy but your solicitor should be check for you.
I've heard recently where someone who was in a similar situation to you but had put down €45k as a deposit (upmarket estate) was trying to get out of the purchase as the builder went bankrupt, however the liquidators kept the workers on site and completed the houses/ appts and sold them for over 200k less that what they were originally sold for. This lad was happy to loose the €45k but the liquidators (or their representatives) are bringing him to court for breaking the contract and looking for him to pay the difference between what they eventually sold the unit for and the contract price and he's been told he will do very well to win that one out.
Again check out your contract as alot of time there are clauses within them where if the house/appt is not completed within specified time them there is a reduction in the price to be paid, not sure of the correct termonolgy but your solicitor should be check for you.
i suggest you act sooner rather than later, you are prob too late now anyway, a lot more people possibly pulled out thats why he cannot start the project... he might let the first one or two have their money back, but if you are the tenth you have no chance, so get your skates on..
Black Sheep
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Many houses in the south east have been reduced by up to 100k so could you find a situation similar to yours that has been greatly reduced. Go back to your bank and check that they are willing to lend you the original amount requested. If not go back to the builder and try negotiating with the reduced mortgage and reduced prices in the area together with the late completion date. I know you probably haven't a legal leg to stand on but why should that stop you trying to negotiate.
I heard a builder in the south east recently say to a potential buyer "make me an offer"
Good luck
I heard a builder in the south east recently say to a potential buyer "make me an offer"
Good luck
JiggetyJig
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Having lived in the US for 13 years and moved back home about 3 years ago, I have to say I never understood this buying off the plans lark.
I would like to think that this will become a thing of the past!
I would like to think that this will become a thing of the past!
M
mercman
Guest
Just an update, we recieved a letter on friday stating that we will be recieving a full refund.
Congratulations. Now that's a bit of pressure off your mind.
Consider yourself very lucky. I wonder have they decided to not go ahead with the development. At the end of the day you signed a contract. And i'm not saying that to be harsh. I'm in a similiar position only the bank revalued before draw down and wouldn't give me the finance. I tried to negotiate on price or see would they transfer the deposit. But at the end i've lost almost 20k deposit and they may come after me for any losses they make though hopefully they won't. But at the end of the day i signed my name to a contract and agreed the price.
Just an update, we recieved a letter on friday stating that we will be recieving a full refund.
I'm happy to hear the situation was resolved positively for you. Now that things are sorted for you, you migth want to keep an eye on the sliding market and buy something only if it won't put you in the same situation again.
Cheers,
nadnerB