rte.ie/business/2008/0424/houses.html
If that isn’t a sign of stress!
That’s a serious wedge of cash to live out there. Anyone know anything about the builder? It would be an awful shame if the company went under after selling these houses. Where would the guarantee stand then?
Significant counterparty risk there.
ETA.
Bugler pipped me.
The answer is no, unless they found someone to underwrite. And I can’t see anyone willing to do that for anythnig less than a tidy sum.
Who’s guaranteeing that the company will be around to pony up in 5 years if required? Is the money being held in escrow? If so it kind of defeats the purpose of the exercise for the developer!
I am tempted to ring them up and ask what the collateral arrangements are.
I would demand 30% at an absolute minimum, €200k. Even then, I am not sure it would be worth it.
This would be a grift if… They don’t get their offer underwritten. Most buyers wouldn’t know anything about underwriting and would thing it is a solid deal. Unless they get it underwritten then they should be forced to make it very clear to all buyers that if the builders file for bankruptcy then the deal ends.
I’ll ring them tomorrow.
If you do call. Demand government bonds only, marked to market.
In true Stan Lee mode, my spideysenses are tingling …
I haven’t seen the contracts, so can’t be 100% sure, but I suspect kerrynorth might be on the money … quite often the builder is not the developer … we have seen cases where the builder (or their diectors) create a holding company to complete the development. That company can go bang and the builder, who is a separate entity, can walk away.
Caveat Emptor … or maybe I just a cynic.
Blue Horseshoe
According to Radio 1 the developer, a Vincent Buggy, is personally underwriting the offer.
He must be expecting people not to want to move in 5 years I suspect.
I don’t know if I would get involved to be honest. I suspect that secondhand housing is going to get more attractive if developers are starting to make complicated offers of this nature.
Best thing to do imo is to cut the price big time.
At long last a house worth buying…
Then selling back to him in 4 years time and have lived four years rent free 
If only it were that easy eh… no doubt there are charges n liabilities left right n center.
Lol. This must be a classic case of “damned if you do, damned if you don’t”…
They mentioned on RTE Radio 1 this evening that the building company was owned by Vincent Buggy.I wonder if this is the same person who owned and developed Polly Hops Bar a few years ago…before going bust??This was only a stones throw from Newcastle…coincidence or what???
Oh deary, deary me…
Even if I was the thickest potatoe eater in the whole country with an IQ of 10 and 45 points in the Leaving Cert, I’d be pretty pissed off if my solicitor allowed me to enter such a contract.
Fast forward five years…
Canny McSavvy is long bankrupt, now lives in *his wife’s *8 bedroom mansion on a Potugese golf resort with a lovely electric golf buggy and the shiniest Calloways your money can buy, and you’re left with a massively overpriced house.
Oh the humanity.
…also take into account how well the houses will compare with newer more energy efficient house being built in the next five years.
From what I gather forward looking developers will be looking to make future builds as close to ‘passive’ as possible…will their be a demand for the standard of housing built over the last few years?
…in very much the same way as petrol cars will become less desirable once the new VRT/tax rules come into effect later this year.
Not quite.
You’ll pay interest on your mortgage for the next 5 years, which won’t be refunded, and will be more than renting.
There’s no such thing as a free lunch.
Just yet another sign that house prices are set to tumble more.
This reeks of a someone desperate to sell but who can’t afford to drop the price, and who hopes that the market will recover enough in 5 years to let him escape.
-Rd
Didn’t Polly Hops “burn down”?
Yea…it burned down a couple of months back,but that is many years since yer man owned it! As far as I remember the banks repossessed it from him and new owners were operating it when it burned down.