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Off Plan Property

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  • Off Plan Property

    Hi All,

    My first post, so please be nice.

    I'm looking at buying a property off plan and using an XBond (Property Deposit Guarantee).

    I have the deposit money in a savings account and that would make me more money than the cost of the XBond

    Is this a good idea / too good to be true?

    Thanks for any help

  • #2
    Builders have traditionally wanted the actual deposit to help their cash flow during the build period. If they are prepared to accept the XBond gauarantee that means they are desperate to get you signed up, because they won't have any of your money until completion. In brighter times they would have insisted on actually having the money.

    Before you buy an off plan property at all, have you looked at what similar 5-10 year old properties in the area are selling for?

    Builder will con you into thinking that it is worth more because it is new - it isn't - the test is what you can sell it for.

    If there aren't any similar properties in the area and this is nicer in some way then the question is whether the difference between the price of the closest comparison second hand property and this one really is justified. Builders generally think of a price difference and when asked to justify it say it is wonderful and it has all these qualities and it is worth more ...waffle..waffle..and someone else bought one recently and paid £zzz,zzz...If some other mug did no reason why you should.

    Not a lot of help if in 5 years time when you are trying to sell and the buyer says that he can buy something nearly as good for £xx,xxx less and he doesn't see that the extra goodies are worth the difference!

    As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.
    RICHARD WEBSTERwww.rwco.co.uk
    As a conveyancing solicitor I want to be helpful (England/Wales only) but can't accept liability for this.

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    • #3
      Risky Business

      Hi

      Buying off plan is always a very risky venture, especially in today's market place as the potential is there for numerous disapointments whcih all end up costing you the buyer.

      Aside from this and the other valid comments from fellow posters, there is the area of mortgage lender, ie; who? as the vast majority are seriously not interested in lending on new build properties, and as such, those thatmay consider it will be asking you for much larger deposits and charge extortionate lenders arrangement fees for a very short beneficial period ie; 2 years.

      All of this is likely to prove to be extremely expensive, especially if the build runs beyond its scheduled completion date, with no hope of a return of your funds.

      Think this one through very carefully.

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      • #4
        Already had an horrendous experience with buying off plan. 4 years wait and still no house. Fortunate - very - to get all the money back I had paid. That was after threatening to take camera and media on site. Still lost a lot of money as no interest repaid, plus had already spenbt a small fortune on travelling etc. Look at a re-sales with only a few years on its back - you will get a better deal with an established property.
        Pinoso Property Property Murcia

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