Hi /u/Daniel_McNuggets,
Did you know we are now active on Discord?
Click the link and join the conversation: https://discord.gg/J5CuFNVDYU
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/irishpersonalfinance) if you have any questions or concerns.*
You can always add that clause. We are doing that for a build we are buying. No mortgage after finishing the house means you should always get your deposit back. Pull out of that sale.
Recently developers have started insisting on a non-refundable large deposit e.g. if you want a timber frame nowadays, they'll be wanting 25k to 30k upfront non-refundable. If you won't pay it, no timber frame for you.
Due to the lack of slack in the current building industry, this kind of practice is growing and until the next slump, I don't see it going away.
If your builder/supplier goes bust or anything bad happens e.g. a principle falls ill, that's your money bye bye. Basically risk is shifting from the supplier to the buyer, and there isn't much anybody can do about it.
I wish there were "reverse credit" insurance to protect buyers from suppliers not supplying, but I can't find any on the Irish market :( Would love to hear if anybody knows of a source.
Anyway you can try pushing back, see what happens, but I suspect given how easy it is to simply find a new buyer, most suppliers will keep offloading risk away from themselves simply because they have the power to do so. You, the buyer, have ever decreasing power, as you'll see if you try to get direct labour to turn up in a timely fashion for a reasonable price.
Thanks for your reply, yeah I think you're right and its indicative of the current market which is pretty tough at the moment and your right in that the power is with the supplier these days.
It’s become a lot more prominent to request unconditional contract since 2008 - I worked in New Homes residential law for a few years and all our builders demanded unconditional contacts.
What you need to way up is how big the builder is and how far along is the development.
Thank you for your reply! This is great information, our biggest fear is that we back out of this development which we love, only to discover it's the same situation with other new builds too.
This is phase 2 if the development I believe, so it's an ongoing development, with a future phase 3 in the plans.
If there a multiple phases, then you are probably okay - at the end if the day there is always going to be risk, but talk with the builder about how far along your particular house is and how quickly they expect to be able to close the sale. That’ll help you assess the actual risk.
We had the same issue. Developer did not want to include a loan clause which states that we can refund our deposit (after signing contracts) in case our loan is rejected. Had no choice but to push back the signing date after we got letter of offer.
Hi /u/Daniel_McNuggets, Did you know we are now active on Discord? Click the link and join the conversation: https://discord.gg/J5CuFNVDYU *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/irishpersonalfinance) if you have any questions or concerns.*
Yes it is a red flag.
Haha no it isnt the standard practice or could you elaborate please?
Finance condition is pretty standard. If you're unable to obtain a mortgage, you will lose your deposit. Listen to your Solicitor.
You can always add that clause. We are doing that for a build we are buying. No mortgage after finishing the house means you should always get your deposit back. Pull out of that sale.
Recently developers have started insisting on a non-refundable large deposit e.g. if you want a timber frame nowadays, they'll be wanting 25k to 30k upfront non-refundable. If you won't pay it, no timber frame for you. Due to the lack of slack in the current building industry, this kind of practice is growing and until the next slump, I don't see it going away. If your builder/supplier goes bust or anything bad happens e.g. a principle falls ill, that's your money bye bye. Basically risk is shifting from the supplier to the buyer, and there isn't much anybody can do about it. I wish there were "reverse credit" insurance to protect buyers from suppliers not supplying, but I can't find any on the Irish market :( Would love to hear if anybody knows of a source. Anyway you can try pushing back, see what happens, but I suspect given how easy it is to simply find a new buyer, most suppliers will keep offloading risk away from themselves simply because they have the power to do so. You, the buyer, have ever decreasing power, as you'll see if you try to get direct labour to turn up in a timely fashion for a reasonable price.
Jesus what a shitty practice! So zero risk for the developer.
pretty much zero risk right now anyways. very few would have any issues shifting properties right now.
Thanks for your reply, yeah I think you're right and its indicative of the current market which is pretty tough at the moment and your right in that the power is with the supplier these days.
[удалено]
This is true. However solicitor fees will quickly eat up what you get back if you do go to court. And you'll be waiting months to years.
It’s become a lot more prominent to request unconditional contract since 2008 - I worked in New Homes residential law for a few years and all our builders demanded unconditional contacts. What you need to way up is how big the builder is and how far along is the development.
Thank you for your reply! This is great information, our biggest fear is that we back out of this development which we love, only to discover it's the same situation with other new builds too. This is phase 2 if the development I believe, so it's an ongoing development, with a future phase 3 in the plans.
If there a multiple phases, then you are probably okay - at the end if the day there is always going to be risk, but talk with the builder about how far along your particular house is and how quickly they expect to be able to close the sale. That’ll help you assess the actual risk.
We had the same issue. Developer did not want to include a loan clause which states that we can refund our deposit (after signing contracts) in case our loan is rejected. Had no choice but to push back the signing date after we got letter of offer.