Looking at ghost estate house - some questions on the process

Sesame

Hi,

We are hoping to buy this year and have a couple of ideas of houses in these estates that would suit us on location and house type.
The houses are either show homes or without flooring/kitchens. The agent has said they will be finished for sale completion so presumably they finish the work when the house is sale agreed or something.

So my questions are:
1. This is bank owned estate (developer long gone), does that make the process much longer? If so, what should we expect?
2. Anything in particular to look out for with the house/grounds? What kind of survey would be recommended?
3. Are mortgages more difficult to get approval for on these house than your regular 2nd hand house? We had mortgage approval in January but its since expired.
4. IS it a good idea to offer a bit less for the house in its current state (ie.without kitchen and flooring) and let ourselves do that?

This estate is about 50-60% occupied as far as I can tell so not quite completely ghostlike. Roads and common areas look finished.

delthedriver

Sesame wrote: »

Hi,

We are hoping to buy this year and have a couple of ideas of houses in these estates that would suit us on location and house type.
The houses are either show homes or without flooring/kitchens. The agent has said they will be finished for sale completion so presumably they finish the work when the house is sale agreed or something.

So my questions are:
1. This is bank owned estate (developer long gone), does that make the process much longer? If so, what should we expect?
2. Anything in particular to look out for with the house/grounds? What kind of survey would be recommended?
3. Are mortgages more difficult to get approval for on these house than your regular 2nd hand house? We had mortgage approval in January but its since expired.
4. IS it a good idea to offer a bit less for the house in its current state (ie.without kitchen and flooring) and let ourselves do that?

This estate is about 50-60% occupied as far as I can tell so not quite completely ghostlike. Roads and common areas look finished.

Where are these houses? Is the location acceptable to you, easy access to shops schools, transport links?
What price were they originally?
What is the current asking price?
How much are you prepared to pay for nor of these houses.
I guess the houses are now bank owned, perhaps they may look favourably on mortgage applications for the properties , subject to normal acceptance terms.
I would recommend getting an inspection by a Civil Engineer.
What is the position regarding NHBG scheme?
Tread warily, don 't let your heart rule your head!:)

Sesame

Price advertised is a little high but I thnk we'll start off offering about 15-20% less if we're happy (going to view next week!). I would say our budget is asking price -10%. Its unlikely we would get a mortgage of any higher.
Yes,location, aspect and distance to work suits us well.
Thanks for reminder about NHBG, will ask that next week.
Definitely not letting heart rule this one, as there's more than one option to us here we won't be getting attached to any!
Houses are in Co Cork.

valleyoftheunos

You need to tread very very carefully.

The purchase process will be longer alright as the bank or receiver will take longer to get back to you on offers etc and won't be in much of a hurry to sell. That however is the least of your problems

You'll need to have full surveys done because the property will be sold as seen and no bank or receiver is going to make any promises or guarantees in relation to planning permission, building regulations or s72 burdens like you would normally get. This could make loan approval more difficult.

You then need to establish who is responsible for the management of the estate. The developer is gone so is there a Management Company and were the common areas transferred to them? If so are the Man. Co. still in existence and what sort of shape are their accounts in?

Alternatively have the Local Authority taken the estate in charge? If not and the Man. Co. are also gone who is going to look after the place, cut the grass, make sure the street lights work and clear the drains?

Finally what about the 50%-40% of the houses which are unfinished? is there anyone who can be made responsible for maintaining them let alone finish them or will they be left to fall into ruin?

It all depends on the estate naturally but think of the number of people desperate to move out of such estates and consider their experiences before you decide to move in.

autotrader

I'd be offering a lot less than 20% below asking if 40-50% are unoccupied.

If those unoccupied houses are let go to wreck and ruin, that will have a massive effect on the value of the other houses in the estate in the future. Not to mention the eye sore, potential squatters etc.

Have you spoken to the neighbours? I'd be asking them about the pitfalls of living in the area. Thre must be some!

Other than that, go for it if you get it at a knock down rate!:cool: It'd want to be seriously cheap though

Elbow

Hi Sesame

I managed to get to the sale agreed stage on a bank owned property in the past few days, prepare for a slow process, between toing and froing it took over 5 months to get to the stage we're at now.

It may be different depending on the bank in question from my experience any offer you make will first have to be approved at local level then up to head office to be rubber stamped. (We were waiting 9 weeks between making our final offer to it being accepted)

Regarding the % under asking you offer, we got acceptance at just under 20% so dont be afraid to go very low initially

delthedriver

autotrader wrote: »

I'd be offering a lot less than 20% below asking if 40-50% are unoccupied.

If those unoccupied houses are let go to wreck and ruin, that will have a massive effect on the value of the other houses in the estate in the future. Not to mention the eye sore, potential squatters etc.

Have you spoken to the neighbours? I'd be asking them about the pitfalls of living in the area. Thre must be some!

Other than that, go for it if you get it at a knock down rate!:cool: It'd want to be seriously cheap though

Very good suggestion indeed. Talk to the neighbours. Find out what it is like living there. Has any of the residents had any issues with the houses, subsidence etc?
Are there any occupied houses being resold? Reasons?

Elbow

From personal experience it's also very much worthwhile getting an engineer (Or anyone familiar with building regs) to take a walk around before you make your final offer, small things not quite up to building regs e.g. vents in bathrooms, wheelchair accessibility, banister/handrail heights, thumb screws on the inside of external doors etc etc were sometimes overlooked by developers and might give you a bit of ammunition when it comes to the latter stages of negotiation.

Sesame

Thanks for the answers!
Lots of notes being taken.
Bet I can find someone I know living there.
Thanks Elbow, thats interesting that its taken so long, it what I expected. We want to be moved in by the end of the year hopefully so at least I know we are not too early looking now.

When we rang agent to get more info and asked which are for sale, they gave us a couple of house numbers, but the reality looks like at least double that number are vacant when we drove around.
Presumably thats a sales tactic to make it seem less empty or to try off loading the less desireable house first.

ABajaninCork

I'd also be looking at the possible resale value. If you move into the house on a ghost estate, and you need to move for whatever reason, would you be able to sell?

Sesame

Yeah, I've considered that too and the answer is no, it wouldn't sell, not for a few years anyway. But it would rent easily enough if needed.

Hopefully that won't be needed.

valleyoftheunos

ABajaninCork wrote: »

I'd also be looking at the possible resale value. If you move into the house on a ghost estate, and you need to move for whatever reason, would you be able to sell?

Sesame wrote: »

Yeah, I've considered that too and the answer is no, it wouldn't sell, not for a few years anyway. But it would rent easily enough if needed.

Hopefully that won't be needed.

Remember, the day you buy is the day you sell.

Sesame

Ha! Thanks for those wise words.

the_syco

A ghost estate you say? Best look for some skeletons in the closets;

Walk around the estate, and check out how many houses have people living in them versus the empties. Look for broken windows and open doors on the empty ones. Go back around 22:00 on a Saturday night to see if any of the empties are used for parties. Also look into any of the empties to see if they're in use by people who don't actually own or rent the place.

Check who looks after the estate? Is it the local county council or not? Probably not, as most CC's will only take over finished estates. Any and all promises given by the EA regarding roads/lighting/signage/green areas of the estate should be treated as lies to trick you into buying. This also applies to fixing potholes, and/or general issues that happen with the actual estate itself.

meoklmrk91

valleyoftheunos wrote: »

You need to tread very very carefully.

The purchase process will be longer alright as the bank or receiver will take longer to get back to you on offers etc and won't be in much of a hurry to sell. That however is the least of your problems

You'll need to have full surveys done because the property will be sold as seen and no bank or receiver is going to make any promises or guarantees in relation to planning permission, building regulations or s72 burdens like you would normally get. This could make loan approval more difficult.

You then need to establish who is responsible for the management of the estate. The developer is gone so is there a Management Company and were the common areas transferred to them? If so are the Man. Co. still in existence and what sort of shape are their accounts in?

Alternatively have the Local Authority taken the estate in charge? If not and the Man. Co. are also gone who is going to look after the place, cut the grass, make sure the street lights work and clear the drains?

Finally what about the 50%-40% of the houses which are unfinished? is there anyone who can be made responsible for maintaining them let alone finish them or will they be left to fall into ruin?

It all depends on the estate naturally but think of the number of people desperate to move out of such estates and consider their experiences before you decide to move in.

As someone living in a ghost estate, I am only renting though, this is very important. The management company weren't paid by the developer and so earlier this year they were going to turn off the sewage on us, not a nice idea, lucky a local county councillor stepped in. Also the about the half the street lights don't work as the ESB will not come in as it is the job of the management company who have not been paid so also won't do it, not nice to be walking around at night and make it easier for people to break in to houses unseen. Find out of there is a residence committee, if there is try and meet with a member and ask them another the estate and go back at night. You could get yourself a bargain or you could get yourself into a whole lot of bother. Do your homework before moving into a ghost estate.

Del2005

valleyoftheunos wrote: »

You then need to establish who is responsible for the management of the estate. The developer is gone so is there a Management Company and were the common areas transferred to them? If so are the Man. Co. still in existence and what sort of shape are their accounts in?

Alternatively have the Local Authority taken the estate in charge? If not and the Man. Co. are also gone who is going to look after the place, cut the grass, make sure the street lights work and clear the drains?

I though it wasn't possible to sell in a development where the management company had gone and the council hadn't taken it over.

valleyoftheunos

Del2005 wrote: »

I though it wasn't possible to sell in a development where the management company had gone and the council hadn't taken it over.

Well its not possible in that no buyer or lender in their right mind would buy or lend in such circumstances. Nor would any legal advisor advise such a purchase. Legally speaking however it is totally possible.

Del2005

valleyoftheunos wrote: »

Well its not possible in that no buyer or lender in their right mind would buy or lend in such circumstances. Nor would any legal advisor advise such a purchase. Legally speaking however it is totally possible.

Perhaps I'm confusing apartments with houses but are you not just buying a lease off the management company for the use of the house? All you own is the fresh air between the outside walls. So if there's no management company who do you buy the lease off?

valleyoftheunos

Del2005 wrote: »

Perhaps I'm confusing apartments with houses but are you not just buying a lease off the management company for the use of the house? All you own is the fresh air between the outside walls. So if there's no management company who do you buy the lease off?

You buy the lease from the developer (or NAMA or the reciever or the bank or whoever took over the developer's interest in the estate), the Management Company are an entirely different entity made up of all the owners of the leases.

ABajaninCork

Are the houses freehold or leasehold on a private estate then?

valleyoftheunos

ABajaninCork wrote: »

Are the houses freehold or leasehold on a private estate then?

Leasehold so ast to be able to enforce covenants such as paying the service charge, allowing rights of ways and way leaves etc. The law has changed in this area recently enough so the use of leaseholds in these circumstances may cease in the future.

syklops

Walk from the house to the nearest shop and see how far it is. It might only be 5 minutes in the car, but it could be 20 minutes or more on foot across a motorway, or worse. Cars break down, and harsh winters happen. Would you be happy walking that distance with a few days worth of food?

Its a ghost estate for a reason. Find out why its a ghost estate. RTE would have you believe no-one has bought a house in 5 years but its not true. Good houses in nice areas are selling. Its the other 70%-90% with bad build quality, poor locations etc that aren't. What's this ones weakness and then do a cost benefit analysis.

the_syco

syklops wrote: »

Walk from the house to the nearest shop and see how far it is. It might only be 5 minutes in the car, but it could be 20 minutes or more on foot across a motorway, or worse. Cars break down, and harsh winters happen. Would you be happy walking that distance with a few days worth of food?

On the "or worse" part, check out this ghost estate that has no footpath outside it!!! Without a car, you'll be walking for 5.3 km (about an hour) to Longford, of which 3.0 km (about 35 mins) will be along a fairly narrow road with no footpath at all. Or 20 minutes (1.7km) the other way for a community centre (can't see a shop, though), also without footpath.

delthedriver

How large is the development?

How many units are occupied, truly sold?

How many skeleton houses standing? How many foundations laid?

Personally I would not buy in a ghost estate. It is fraught with legal difficulties.

The last thing you want is to buy the house and find some years later that you don't actually own the site on which it was built.

My advice would be to buy a house in a completed estate in a neighbouring area, if that is the location you really want.

Beware of so called bargains,remember who got the country into this mess in the first place, The Banks!,assisted by Mortgage Brokers, Estate Agents.....

ABajaninCork

delthedriver wrote: »

Beware of so called bargains,remember who got the country into this mess in the first place, The Banks!,assisted by Mortgage Brokers, Estate Agents.....

If something's cheap, it's cheap for a reason!! :P

But something just occurred to me. I thought you couldn't borrow on a leasehold house, just as you can't on a freehold flat. Or was it because of the Celtic Tiger that you could?

StillWaters

ABajaninCork wrote: »

If something's cheap, it's cheap for a reason!! :P

But something just occurred to me. I thought you couldn't borrow on a leasehold house, just as you can't on a freehold flat. Or was it because of the Celtic Tiger that you could?

Course you can borrow on a leasehold house. I'd guess half of the houses in Ireland are leasehold.

There aren't many freehold flats, or rather flats with a freehold share, but I imagine you can borrow on those also.

delthedriver

the_syco wrote: »

On the "or worse" part, check out this ghost estate that has no footpath outside it!!! Without a car, you'll be walking for 5.3 km (about an hour) to Longford, of which 3.0 km (about 35 mins) will be along a fairly narrow road with no footpath at all. Or 20 minutes (1.7km) the other way for a community centre (can't see a shop, though), also without footpath.

Lovely. Where is the Q?