Buying a house owned by a major developer
Discussion
I'm about to view a house which is owned by Persimmon homes but is still occupied by those who sold it to Persimmon. The house was part-exchanged against a new property which is due for completion in September of this year.
I've never come across this before and this would only be my second house purchase, so I'm a bit wary. My thoughts are that it's likely that those who are currently living there are doing so rent free until theirs is built. And so it's going to be no skin of their nose if their new home is delayed and they've no influence over events. It's not as if they're going to move out.
In this set if circumstances, would it be normal or reasonable to get something drawn into the contract that if completion is not done by September there's a penalty, or those currently living there would have to move out etc? Or given the state of the market - demand is far outstripping supply at least in my area - and given that I'm dealing with Persimmon, am I likely peeing in the wind? My concern would be there are delays after delays, meaning I continue to pay rent needlessly. I'm not in a chain so I'm not worried about a delay causing a sale to fall through since I'm in rented.
Lastly, the home looks to be 10-15% or greater under-valued. It's a fairly new build itself. It seems odd to undervalue it. Perhaps Persimmon just want propertys off their books asap? Or it's priced to reflect that September will be the completion day. What do you reckon? Their ad on right move mentions it's "priced to sell!".
On the other hand, with all the turmoil in the world and with cost of living etc, if the market tumbles between now and September at least I could walk away and won't have overpaid. Whereas if I find something and have it done within the next 3-4 months I won't have that luxury.
I've never come across this before and this would only be my second house purchase, so I'm a bit wary. My thoughts are that it's likely that those who are currently living there are doing so rent free until theirs is built. And so it's going to be no skin of their nose if their new home is delayed and they've no influence over events. It's not as if they're going to move out.
In this set if circumstances, would it be normal or reasonable to get something drawn into the contract that if completion is not done by September there's a penalty, or those currently living there would have to move out etc? Or given the state of the market - demand is far outstripping supply at least in my area - and given that I'm dealing with Persimmon, am I likely peeing in the wind? My concern would be there are delays after delays, meaning I continue to pay rent needlessly. I'm not in a chain so I'm not worried about a delay causing a sale to fall through since I'm in rented.
Lastly, the home looks to be 10-15% or greater under-valued. It's a fairly new build itself. It seems odd to undervalue it. Perhaps Persimmon just want propertys off their books asap? Or it's priced to reflect that September will be the completion day. What do you reckon? Their ad on right move mentions it's "priced to sell!".
On the other hand, with all the turmoil in the world and with cost of living etc, if the market tumbles between now and September at least I could walk away and won't have overpaid. Whereas if I find something and have it done within the next 3-4 months I won't have that luxury.
I’d ask to see their usual contract.
It wouldn’t surprise me if they wrap all kinds of features in there with regards the current occupier, and completion of their house.
Ie, persimmon and them will have an agreement in contract by now, but I assume house still owned by the original owner.
I very much doubt that contract says if persimmon are late, they’ll kick their tenant out!
If persimmon fail to deliver in time, and the market does turn, the current owner might just pull out.
I’d be trying to find out the terms of that contract before spending hundreds of quid with a solicitor to find it out.
Ie, long-stop date might be well into 2023. Persimmon or the actual owner might have you waiting years.
It wouldn’t surprise me if they wrap all kinds of features in there with regards the current occupier, and completion of their house.
Ie, persimmon and them will have an agreement in contract by now, but I assume house still owned by the original owner.
I very much doubt that contract says if persimmon are late, they’ll kick their tenant out!
If persimmon fail to deliver in time, and the market does turn, the current owner might just pull out.
I’d be trying to find out the terms of that contract before spending hundreds of quid with a solicitor to find it out.
Ie, long-stop date might be well into 2023. Persimmon or the actual owner might have you waiting years.
thenortherner said:
I'm about to view a house which is owned by Persimmon homes but is still occupied by those who sold it to Persimmon. The house was part-exchanged against a new property which is due for completion in September of this year.
I've never come across this before and this would only be my second house purchase, so I'm a bit wary. My thoughts are that it's likely that those who are currently living there are doing so rent free until theirs is built. And so it's going to be no skin of their nose if their new home is delayed and they've no influence over events. It's not as if they're going to move out.
In this set if circumstances, would it be normal or reasonable to get something drawn into the contract that if completion is not done by September there's a penalty, or those currently living there would have to move out etc? Or given the state of the market - demand is far outstripping supply at least in my area - and given that I'm dealing with Persimmon, am I likely peeing in the wind? My concern would be there are delays after delays, meaning I continue to pay rent needlessly. I'm not in a chain so I'm not worried about a delay causing a sale to fall through since I'm in rented.
Lastly, the home looks to be 10-15% or greater under-valued. It's a fairly new build itself. It seems odd to undervalue it. Perhaps Persimmon just want propertys off their books asap? Or it's priced to reflect that September will be the completion day. What do you reckon? Their ad on right move mentions it's "priced to sell!".
On the other hand, with all the turmoil in the world and with cost of living etc, if the market tumbles between now and September at least I could walk away and won't have overpaid. Whereas if I find something and have it done within the next 3-4 months I won't have that luxury.
It does appear that the deal could be illusory.I've never come across this before and this would only be my second house purchase, so I'm a bit wary. My thoughts are that it's likely that those who are currently living there are doing so rent free until theirs is built. And so it's going to be no skin of their nose if their new home is delayed and they've no influence over events. It's not as if they're going to move out.
In this set if circumstances, would it be normal or reasonable to get something drawn into the contract that if completion is not done by September there's a penalty, or those currently living there would have to move out etc? Or given the state of the market - demand is far outstripping supply at least in my area - and given that I'm dealing with Persimmon, am I likely peeing in the wind? My concern would be there are delays after delays, meaning I continue to pay rent needlessly. I'm not in a chain so I'm not worried about a delay causing a sale to fall through since I'm in rented.
Lastly, the home looks to be 10-15% or greater under-valued. It's a fairly new build itself. It seems odd to undervalue it. Perhaps Persimmon just want propertys off their books asap? Or it's priced to reflect that September will be the completion day. What do you reckon? Their ad on right move mentions it's "priced to sell!".
On the other hand, with all the turmoil in the world and with cost of living etc, if the market tumbles between now and September at least I could walk away and won't have overpaid. Whereas if I find something and have it done within the next 3-4 months I won't have that luxury.
Persimmon will be making ££££ on the new home, so sale of the trade-in releases their profit. Which is a possible explanation for the low price.
The problem is that the property is tenanted and those tenants are waiting to go into a new home, obviously. Their house may not be ready in time, or ready and correct. Persimmon cannot control how the tenants behave. They cannot just kick 'em out so that you can have your (cheap) house.
In theory you could exchange contracts with September completion. Or you could get your solicitor to speak to them about an option agreement. This means that, for the payment of a fee (could be as little as £1) you gain the legal right to buy by a specific date at a specific price.
But my guess is that they won't agree to any of the above. They will keep you hanging on, hoping for a bargain house. If it doesn't suit them to sell it to you later, they will have no hesitation in not selling it to you.
The price of the property is low because the risk to you is high.
I part exchanged many years ago to Bovis.
Sixth months later, the people who bought my old house, gave my new address as the previous owners - not Bovis.
Bovis were useless at paying any bills whilst they owned my old house!!
If you do end up buying it, ensure you've a decent contact for forwarding their bills AND you do a thorough handover before you take possession....I bet once you're in, they'll not want ANYTHING to do with the old house.
Sixth months later, the people who bought my old house, gave my new address as the previous owners - not Bovis.
Bovis were useless at paying any bills whilst they owned my old house!!
If you do end up buying it, ensure you've a decent contact for forwarding their bills AND you do a thorough handover before you take possession....I bet once you're in, they'll not want ANYTHING to do with the old house.
Thanks, all.
Pretty much sums up my thoughts and initial comments. For clarity, Permisson do own the property - this was clarified by the agent - it's just the original owners remain living there.
I'm not sure I'd go ahead despite the cheap price unless there's something in the contract to protect me from them kicking the can down the road or hiking the price before exchange.
I guess I can only make an offer subject to all this and the worst that could happen is being laughed out.
Pretty much sums up my thoughts and initial comments. For clarity, Permisson do own the property - this was clarified by the agent - it's just the original owners remain living there.
I'm not sure I'd go ahead despite the cheap price unless there's something in the contract to protect me from them kicking the can down the road or hiking the price before exchange.
I guess I can only make an offer subject to all this and the worst that could happen is being laughed out.
We unknowingly bought a part ex in the scenario above when we bought ours, hadn't realised untill it was all complete however from first viewing to getting keys was a little under 4 weeks.
Incredibly smooth and straight forward and annoyingly our silly low offer was accepted immediately.
Incredibly smooth and straight forward and annoyingly our silly low offer was accepted immediately.
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