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Developer wants us to put down cash before property is built

  • 17-06-2020 10:02am
    #1
    lucanbound
    Registered Users, Registered Users 2 Posts: 19 ✭


    Hi there,

    Just to give you some background on our situation...we are first time buyers looking to purchase a new build property.

    The agent has advised us that we would need to pay a booking deposit to reserve the property and sign contracts within 30 days along with another payment of 10% deposit of the value of the house with the remaining balance due once the house has been completed. The house won't be ready for completion until the end of the year.

    Is this normal practice and would you advise us to go through with this ?

    Thanks for all responses.


Comments

  • #2
    chops018
    Registered Users, Registered Users 2 Posts: 2,458 ✭✭✭chops018


    Completely normal for a new build.

    If you are borrowing to fund the purchase, ensure your Solicitor inserts a "subject to loan" clause in the contract to protect your 10% deposit if the bank don't give you your loan for whatever reason.

    Also, you pay a booking deposit at the start to have them hold the property and then on signing contracts you pay the balance of the 10% deposit meaning you deduct the balance deposit paid and then pay whatever amount is left for the 10% deposit of the purchase price.

    If you are availing of the Help to Buy (HTB) scheme, it is possible this can be taken off the 10% deposit at contract signing stage also.


  • #3
    awec
    Administrators Posts: 54,834 Admin ✭✭✭✭✭awec


    Totally standard practice.

    Solicitor can request a subject-to-loan clause but developer can refuse. It's a mixed bag on getting this clause added.


  • #4
    lucanbound
    Registered Users, Registered Users 2 Posts: 19 ✭lucanbound


    chops018 wrote: »
    Completely normal for a new build.

    If you are borrowing to fund the purchase, ensure your Solicitor inserts a "subject to loan" clause in the contract to protect your 10% deposit if the bank don't give you your loan for whatever reason.

    Also, you pay a booking deposit at the start to have them hold the property and then on signing contracts you pay the balance of the 10% deposit meaning you deduct the balance deposit paid and then pay whatever amount is left for the 10% deposit of the purchase price.

    If you are availing of the Help to Buy (HTB) scheme, it is possible this can be taken off the 10% deposit at contract signing stage also.


    Thanks I think the clause being in the contract will be key. We are also eligible for the HTB scheme so it's good to know we can offset some of the 10% deposit.


  • #5
    lucanbound
    Registered Users, Registered Users 2 Posts: 19 ✭lucanbound


    awec wrote: »
    Totally standard practice.

    Solicitor can request a subject-to-loan clause but developer can refuse. It's a mixed bag on getting this clause added.

    Thanks I don't think we would be comfortable going ahead if we can't rely on that clause.


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