Developer in receivership - red flag or golden opportunity??(6 Posts)
Currently looking for a house to buy. Our house is sale agreed and we are already prepared to move into rental if we dont find something and/or to make ourslves more attractive buyers.
Yesterday we saw the brochure on-line for a new-build house which on paper ticked all of our boxes but is sitting at about 20% above our intended maximum spend (marketed as being a turnkey property with very high spec). It has been on the market for a couple of years and from the website they have already lowered their price substantially the last time in January this year. EA was closed but we decided to go and take a look anyway from the outside. It's one of a development of 3, other 2 are sold and look really really gorgeous. we had a nosey around the site for the house we are interested in. It has basically been deserted in a half completed state. All of the main structural work appears to be complete the windows and roof are on etc. and there appear even to be flooring materials etc. left on site. It's missing things like internal staircase, possibly wiring and pipes for plumbing (hard to tell), outside landscaping and it is clearly a long way from complete.
The problem is that on seeing it I fell completely in love with it :-). It is
definitely probably much more than we need but I think it could really be our dream house; on the other hand I'm trying not to get too carried away... Having come home and done a bit of research it appears that the developers after a couple of years under a CVA went into liquidation earlier this year.
The market in this area is probably down around 10% generally since January anyway so the 'finished' asking price is already quite high.
We are still interested. Obviously our first step on Monday monrning will be to contact the EA to get more background on the situation, but I'm just wondering if anyone out there has any experience/advice to impart on this.
What are the potential pitfalls. Should we avoid like the plague.
I'm guessing (???) we'd have to finish it ourselves. What sort of price should we be budgeting for this (per sq metre) given that I'd be happy to go for a good rather than amaaazing spec (i.e. per the original plans). Is there a professional (e.g. surveyor?) who could help with this. Are there obvious areas where we could potentially save money? e.g. would it make a difference having one less ensuite... <don't want to spend my life cleaning the loos emoticon>
I am wondering why it has lain empty so long.
Obviously there wouldn't be any guarantee on the build so far, is that likely to be an issue?
Any thoughts good or bad welcome.
If it's not finished you will also need to get building regs signoff on the completion. It would be both finding out what has been done in this respect and what paperwork is available. Somethings that just require visual inspection are easy other things like drainage & structure might be more difficult if they are covered up and there is no documentary evidence or previous inspection.
Thanks and good point I hadn't thought about that. if they say they don't have the paperwork in order it's not a non starter but we'd tread extra carefully. Am also thinking it might be worth talking to the neighbours if they are willing to.
you need to check what minimum requirements a mortgage lender would have. some will not lend on buildings without kitchen/bathroom fittings, stairs etc. although one like the eco building society might be more flexible.
could you track down the original architect? then you would get continuity and building regs sign off/prof. indemnity cover would be more straightforward?
Flip I hadn't even thought about mortgage validity. That might explain why it hasn't sold. Will do some further research on that. Thanks
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