Hi All,
I am interested in buying a brand new house. This particular house is still in construction and the details are like this:
Price: $450.000
Deposit 10% = $45.000 when getting loan approval.Now, the problem I have with this situation is:
They (The builder) want to get the 10% now (I already have pre-approval), but there is no date for the house to be finished. So that means that they can finish the house in a month (that is fine), or in 6 months, 1 year etc. and I will be paying interests in $45.000 without enyoing the house.Any advice, recommendation? should we include something in the contract?
George
George,
Where is the house located, ie what state and city?
By the sounds of what you are saying you are buying of the plan from a builder, If you need to borrow the deposit aswell I would not buy unless the property was completed, unless you can negotiate another deposit amount, maybe $1000, or an amount that you can afford to put down.you can talk to your solicitor about sunrise clauses.
why not negotiate the deposit down ?
we sell our houses on very little deposit and have not had a problem yet.The last block of land that I purchased I put down $100.00 and said like it or lump it. They wanted to sell the land so they took my $100.00 and were happy with it.
as you say, by paying such a large deposit you are helping the developer/builder to offset his interest costs which are already factored into the final selling price, which equals more profit for them & more costs for you.
Cheers Jeff
http://www.property.focusdevelopments.com.auHi Selling,
I’d hesitate to sign an openended contract no matter what the deposit. As you’ve already mentioned you could be waiting for a very long time!
That would have to be #1 on your list to be changed.Second, the deposite size really is up to you – what are you comfortable with? Just remember, screwing a developer over (and focusdevelopments should also see this) by paying virtually no deposit makes life hard for every-one.
I’d look at each situation separately and make a judgment call. It is an investment and you’d want to keep your costs down for as long as necessary, but I’d warn against being unreasonable.
Life has a way of evening the score.Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonDon’t let reality be the benchmark for your Dreams
hmm yes i just reread what i wrote.
I didnt mean screw anyone over, I just meant that you dont have to pay a huge deposit.also paying a large deposit straight to the seller could cause a problem if you want to get it back. perhaps a solicitors trust account might be a safer option ?
Cheers Jeff
http://www.property.focusdevelopments.com.auI am not to up on QLD contracts but, if you are buying a house and land package with no building contract then you should agree with the builder a deposit, have that deposit held in an interest bearing account held by your solicitor, at settlement this is released and the interest split. Put a sunset clause in the contract, with a performance penalty clause for everyday the builder is over that period.
If the builder does not except this then you are on your own….Chris
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