What Happens our deposit if we are forced to pull out

niallo27

Hi there we have being approved in principle for our mortgage, we have our deposit 24 grand, the house is not finished and wont be for about 3 months and the builder wants us to pay a deposit of 24 grand to finish the house which is fine.

Now the thing is there are talks of lay offs in my place of work in late august start of September, i should be ok but you never know, i want to know can i write it in to my contract that if i do lose my job i can pull out of my contract without losing my deposit or do ye think i should wait till after august to sign anything, i have signed nothing so far only verbal that we are very interested.

Any help would be appreciated.

ntlbell

I wouldn't give any builder bus fare home never mind 24k at the moment.

I would suggest to him that you will lodge the 24k with YOUR solicitor who will pay out on completion of the house.

mandz

Hey,

I would ask your solicitor about that before you pay over anything or sign anything. Personally, I think you should negotiate that point now with the builder as opposed to have the ball rolling and then turn around and pull out as I think there is a strong possibility of you losing your deposit especially if the contract says that the deposit is non-refundable.

Given the current climate I think you should be upfront with your solicitor and let them advise you as to what your options are. If they believe you won't be able to put in such a break option into your contract with the builder (which is a possibility as the builders are trying to keep the banks off their bank) then it would be best to hold off until August I think.

Hope that's of some use to you!! Best of luck and hope you are okay in August.

niallo27

ntlbell wrote: »

I wouldn't give any builder bus fare home never mind 24k at the moment.

I would suggest to him that you will lodge the 24k with YOUR solicitor who will pay out on completion of the house.

Well that is what would happen it would stay in my solicitors account, see the thing is which i forgot to mention in my original post is that he is finishing the house with the contents we want in the full price of the house so its hard for him to fill the house with the kitchen and tiles and carpets that we want and then there is a chance we could pull out. Although i know by the way he is talking that he is very very very eager to sell this house so he might be will ing to put a clause in the contract

spockety

What happens if you do manage to get a good agreement with the builder, and you don't have to pay him the lot until September, and you move in, only to find that your employer has pushed their decision on lay-offs back another few months? You will have bought a house, with mortgage repayments due every month, but may lose your job?

You are working in a place where your job is not assured from the sounds of it, I would be far more concerned with the idea of whether you should be buying a house at all never mind if you can delay handing over a deposit for a while!

niallo27

spockety wrote: »

What happens if you do manage to get a good agreement with the builder, and you don't have to pay him the lot until September, and you move in, only to find that your employer has pushed their decision on lay-offs back another few months? You will have bought a house, with mortgage repayments due every month, but may lose your job?

You are working in a place where your job is not assured from the sounds of it, I would be far more concerned with the idea of whether you should be buying a house at all never mind if you can delay handing over a deposit for a while!

Well obviously I'm going to wait till the lay off announcements are made its either us or the Americans and at the moment we are cheaper, so hopefully the yanks will take the fall, no i know for a fact that when these lay offs happen we will be safe for the next number of years

niallo27

spockety wrote: »

What happens if you do manage to get a good agreement with the builder, and you don't have to pay him the lot until September, and you move in, only to find that your employer has pushed their decision on lay-offs back another few months? You will have bought a house, with mortgage repayments due every month, but may lose your job?

You are working in a place where your job is not assured from the sounds of it, I would be far more concerned with the idea of whether you should be buying a house at all never mind if you can delay handing over a deposit for a while!

And i didnt ask for advice on if i should buy or not, do you think im stupid im going to rush into this if i know my job could be gone, use your brain son will ya

spockety

niallo27 wrote: »

And i didnt ask for advice on if i should buy or not, do you think im stupid im going to rush into this if i know my job could be gone, use your brain son will ya

I never said you were stupid, I thought I was pointing out something that maybe you hadn't considered.

Best of luck with your purchase.

ntlbell

niallo27 wrote: »

Well that is what would happen it would stay in my solicitors account, see the thing is which i forgot to mention in my original post is that he is finishing the house with the contents we want in the full price of the house so its hard for him to fill the house with the kitchen and tiles and carpets that we want and then there is a chance we could pull out. Although i know by the way he is talking that he is very very very eager to sell this house so he might be will ing to put a clause in the contract

I would be very careful what you sign, generally the deposit gets paid to the builders solicitor straight away. solicitor's generally only hold deposits when purchasing second hand home's.

be very very careful.

ntlbell

spockety wrote: »

I never said you were stupid, I thought I was pointing out something that maybe you hadn't considered.

Best of luck with your purchase.

That'll learn ye.

Victor

niallo27 wrote: »

use your brain son will ya

Relax.

spockety

ntlbell wrote: »

That'll learn ye.

I learned ages ago on this board the kind of reaction you can get when you say things people don't want to hear. Tread carefully for you tread on dreams, etc.

tenchi-fan

€24k is a lot of money.

What if you fork it over then arrive at the house 3 months later to the scene of a construction site after the builder went out of business?

The bank sends a valuer who values the house at €40k less than you agreed in the contract and won't give you the loan.

Let the builder take out a loan to finish the jobs, or wait until you own the house and then pay the builder to finish it.

BTW I'm not familiar with the process of buying a new house so apologies if I got anything wrong.

ntlbell

the whole idea of deposits to builders for a house not yet built was the fact that

1. there was a huge amount of people hunting the property

2. you made money as by the time you got into the house it was worth more than you initially agreed.

both those those reasons are not valid any more for the most part.

if harvey norman had a few hundred tv's top of the range coming in dec going on sale at 500e

why would you put a deposit on it today if the price was 800e?

you'd wait till dec and buy it at 500e

the only reason you would deposit now is if there was only 100 tv's and 500 to buy

there is a general huge over hang of houses and there just isn't the compition there once was there is no real need to put down deposits anymore

i'd seriously re-consider handing over any cash

the_syco

niallo27 wrote: »

the builder wants us to pay a deposit of 24 grand to finish the house which is fine

Why does he want the money now? Sounds like he doesn't have the money to finish it. If this was the case, I'd say hold onto the money, as otherwise you may be 24 grand down, with a half finished house, and no builder when he runs into further cash-flow problems.

niallo27

interesting indeed, well the house is finished, it just needs touching up inside and to finish the tiling and flooring, kitchen etc which is all included in the price, i have checked up on him and he is a good guy, we are not that big of an community. i think the reason he wants a sizable deposit is that he is filling the house with all the contents that we want and that we are picking out so he wants to know we are serious, he doesn't want to fill the house and then have no one live in it which i can understand.

If no contents were being included i would be handing over no deposit.

ntlbell

niallo27 wrote: »

interesting indeed, well the house is finished, it just needs touching up inside and to finish the tiling and flooring, kitchen etc which is all included in the price, i have checked up on him and he is a good guy, we are not that big of an community. i think the reason he wants a sizable deposit is that he is filling the house with all the contents that we want and that we are picking out so he wants to know we are serious, he doesn't want to fill the house and then have no one live in it which i can understand.

If no contents were being included i would be handing over no deposit.

a good guy eh

the good guys go bankrupt to

1k shows your serious no one likes throwing money away.

astrofool

I would make sure you have the deeds to the property berfore handing over an amount that size to the builder.

The only case you should pay that amount would be if you owned the land, and were getting a builder to build a house on it for you (usually you pay enough for materials through the build, with a lump sum at the end on completion).

ZYX

Would it be safer to buy house first (at a different agreed price), then pay either builder or someone else to do the finishing pieces like kitchen, tiling etc? Obviously it would mean paying a mortgage on a house you could not live in.

niallo27

ZYX wrote: »

Would it be safer to buy house first (at a different agreed price), then pay either builder or someone else to do the finishing pieces like kitchen, tiling etc? Obviously it would mean paying a mortgage on a house you could not live in.

Seems like a good idea alright but i could not afford my present rent and mortgage repayments, could i not hold my deposit in my solicitors account so if anything did happen i would not have to chase the builder up, i'm new to all this

ntlbell

niallo27 wrote: »

Seems like a good idea alright but i could not afford my present rent and mortgage repayments, could i not hold my deposit in my solicitors account so if anything did happen i would not have to chase the builder up, i'm new to all this

ask the builder.

this usually only happens on second hand home's as you were told all ready earlier in the thread

niallo27

ntlbell wrote: »

ask the builder.

this usually only happens on second hand home's as you were told all ready earlier in the thread

Sorry yes you said this earlier, sorry about that, but we are kinda getting off the point here a bit, the main thing was would i lose my deposit if i had to pull out not him.

thanks for the advice so far as well guys

ntlbell

niallo27 wrote: »

Sorry yes you said this earlier, sorry about that, but we are kinda getting off the point here a bit, the main thing was would i lose my deposit if i had to pull out not him.

thanks for the advice so far as well guys

the answer is "it depends"

discuss it with your solicitor/builder and see what options you have

they have the answers

we'll be guessing.

niallo27

ntlbell wrote: »

the answer is "it depends"

discuss it with your solicitor/builder and see what options you have

they have the answers

we'll be guessing.

True. cheers for the advice

D3PO

its quite simple.

does the contract you have signed compel you to pay the 24k ? if not dont pay it. I fit does then do.

bobbiw

niallo27 wrote: »

Hi there we have being approved in principle for our mortgage, we have our deposit 24 grand, the house is not finished and wont be for about 3 months and the builder wants us to pay a deposit of 24 grand to finish the house which is fine.

Now the thing is there are talks of lay offs in my place of work in late august start of September, i should be ok but you never know, i want to know can i write it in to my contract that if i do lose my job i can pull out of my contract without losing my deposit or do ye think i should wait till after august to sign anything, i have signed nothing so far only verbal that we are very interested.

Any help would be appreciated.

I take it you have heard of the builder who went bankrupt in south dublin and no one got their deposits back.

First of all do not buy a new home, its a stupid idea. Buy an already built home where the owners have 60-80% equity then you can bargain down.

If you buy that property you will loose at least 30% of its value in the next few years, your loan will be higher than the value of the property for the next decade.

niallo27

bobbiw wrote: »

I take it you have heard of the builder who went bankrupt in south dublin and no one got their deposits back.

First of all do not buy a new home, its a stupid idea. Buy an already built home where the owners have 60-80% equity then you can bargain down.

If you buy that property you will loose at least 30% of its value in the next few years, your loan will be higher than the value of the property for the next decade.

I don't understand why anyone cant bargain down the price of a newly built house too, these days home owners are nearly more stubborn about the value of their house than a builder, this is the last detached property is this estate, we already got 80k off the original price and still hoping to get more. NOT ALL PEOPLE THAT ARE BUYING IN THESE TIMES ARE STUPID SOME OF US HAVE ACTUALLY BEING LOOKING AROUND AND HAVE A FOUND SOME GREAT VALUE. sorry for shouting