Someone I know is mad excited as sold their place to a developer...settlement in July 2021. Is that normal? I'd personally think it's a risk.....

lythande1 - 2020-11-07 08:12:00

Big risk, need to look at deposit paid and any other clauses that might have been inserted as a back out. And with house prices increasing rapidly, did they sell at today’s price or July’s?

sparkychap - 2020-11-07 08:16:00

sparkychap wrote:

Big risk, need to look at deposit paid and any other clauses that might have been inserted as a back out. And with house prices increasing rapidly, did they sell at today’s price or July’s?

Sometimes people are 'intent' on selling - and prefer taking the risk of a presumably secure settlement at a later date, than maybe getting a higher price by waiting to see what the market does.

brouser3 - 2020-11-07 08:29:00

lythande1 wrote:

Someone I know is mad excited as sold their place to a developer...settlement in July 2021. Is that normal? I'd personally think it's a risk.....

Why do you consider it a risk?

johnston - 2020-11-07 08:32:00

brouser3 wrote:

Sometimes people are 'intent' on selling - and prefer taking the risk of a presumably secure settlement at a later date, than maybe getting a higher price by waiting to see what the market does.

Developer paying more than they need? Nah.

sparkychap - 2020-11-07 08:33:00

We did this building many years ago. It meant that we could move from our house to new one without renting in between and with young children and dog was a godsend

radars1 - 2020-11-07 11:08:00

Cousin did this with a farm block in Northland.
Was sold 3 times before official hand over, each making a profit.

smallwoods - 2020-11-07 14:11:00

Deposit is $100K in 2 weeks apparently.
Sale price is 1.3m. Someone else knocked on door and offered 1.24...but they have already signed.

lythande1 - 2020-11-07 15:06:00

johnston wrote:

Why do you consider it a risk?

Prices are still going up. So they base plans on the now price....in 8 months that money gets them less.
1.3m minus mortgage, REA fees, lawyers move costs etc...

lythande1 - 2020-11-07 15:07:00

lythande1 wrote:

Prices are still going up. So they base plans on the now price....in 8 months that money gets them less.
1.3m minus mortgage, REA fees, lawyers move costs etc...

But where is the risk? Mortgage, fees etc apply whether settlement is 8 days or 8 months.

johnston - 2020-11-07 15:52:00

Is there a real estate agency involved?
If yes then I would insist the deposit is non refundable paid immediately into my account and the commission is paid only when full settlement of that sale has happened.
As always, I say get a good lawyer to read everything before you sign anything and take his advice.
That’s my 2 bobs worth...

lovelurking - 2020-11-07 16:17:00

That is what developers do. It means they can get their plans etc sorted before they settle so immediately after settlement they can get on with consents and building. This way they haven't paid for the section and have it sitting for months doing nothing. I wouldn't accept such a long settlement

alimmw - 2020-11-07 21:26:00

johnston wrote:

But where is the risk? Mortgage, fees etc apply whether settlement is 8 days or 8 months.

What are they buying? They can't till they have the money, meanwhile what they are looking at is going to cost more in 8 months......They're not moving out of Auckland. Staying local.

lythande1 - 2020-11-08 07:58:00

lythande1 wrote:

What are they buying? They can't till they have the money, meanwhile what they are looking at is going to cost more in 8 months......They're not moving out of Auckland. Staying local.

You are speculating and in any event how do you know the longer settlement wasn't factored into the purchase price?

johnston - 2020-11-08 12:02:00

I know them. And prices are going up like mad.

lythande1 - 2020-11-08 15:13:00

lythande1 wrote:

What are they buying? They can't till they have the money, meanwhile what they are looking at is going to cost more in 8 months......They're not moving out of Auckland. Staying local.

Just like they have done they can enter into a contract to purchase today.

johnston - 2020-11-08 16:49:00

ideally the developer does not want to settle untill they have signed up a few punters for the resultant sections / houses...
The one thing that would be subject to discussion / negotations would be the amount of access the developer has to the site pending settlement... can he get on there with surveyors, little men with clipboards measuring things, signage etc etc..
Given this property is not due for settlement until July 2021, which is a different financial / tax year may be of advantage to both the seller and buyer !!

onl_148 - 2020-11-13 13:29:00

My daughter just sold her place to the developer who is putting 12 townhouses next door. The contract presented included power of attorney over the property so the contractors could come and go as they please and make changes etc all before any money changed hands. In fact they had surveyors etc turn up expecting access before the deal was even agreed. Hopefully your vendor hasn't got this and has to live with contractors etc traipsing in and out at will for the next few months.

hers.nz - 2020-11-13 21:31:00

hers.nz wrote:

My daughter just sold her place to the developer who is putting 12 townhouses next door. The contract presented included power of attorney over the property so the contractors could come and go as they please and make changes etc all before any money changed hands. In fact they had surveyors etc turn up expecting access before the deal was even agreed. Hopefully your vendor hasn't got this and has to live with contractors etc traipsing in and out at will for the next few months.

Allowing access seems reasonable but making physical changes etc. appears to be extremely risky. A POA over the property?

johnston - 2020-11-14 06:53:00

Gee.. what are the developers proposing to do on the land, prior to settlement, that they see they need to have a POA to do.... it sounds like something that they suspect the seller would say no to !!
Are we talking about an empty plot of land, or a piece of land still with an occupied dwelling on

onl_148 - 2020-11-17 11:49:00

In this time when prices are going up so fast, I wouldn't be doing a long settlement, and certainly not if the developer has paid less than 10% deposit, and I certainly wouldn't be giving them any access before settlement.

mrcat1 - 2020-11-17 19:35:00