Please help a novice in this market!

[nawabshah]

Hi there, this is my first post!

I have recently bought an off-plan property in a development in Leicester. This development is actually a conversion of a textile factory into many luxury apartments. There are I think 3 phases and the third phase is likely to completed by March/April 2009.

I have a lot of questions that I really should have asked prior to purchasing the property, I have been very naïve I guess. However, I would be very grateful if you can help me with the following questions:

Property details: 3 bedroom duplex ‘luxury’ high spec apartment in LE3 (1 mile from centre of Leicester). This also includes a parking slot in the private car park. The also specs include communal cinema room, communal gym. Apparently the fixtures and fittings are going to be of a high standard too. I purchased this through a ‘property investment firm’ and I had to only pay a finders fee, and instead of a deposit, I had to pay for a deposit insurance policy (exchange bond). Overall I had to shell out £10k for the finders fee and deposit insurance.

Questions:

1) When I purchased this development, the market value was considered to be around £350,000 (the investment firm suggested that was the market value). I researched if this was an accurate valuation on the internet, and on the Rightmove website there were a couple of other new developments which showed similar selling prices (unsold). However, there were no records of any sold comparable apartments for that price. However, in order to entice me into this deal, the investment company told me that I can receive a £98,000 discount on the market price. So in effect I would be paying only £252,000. I thought (maybe foolishly) that this was a good deal and hence I went ahead. So the question is are these ‘incentive’ deals a scam or are they actually discounts on the market value?
2) Secondly I wanted to find out if I can sell on my assignable contract to another person (not to profit myself- but to offload a risk). I have only exchanged contracts (without deposit), and apparently I can sell my contract on before completion (as a right to purchase at the ‘discounted’ price). The question was, if I were to do this, what would be the implications for me? And would this be difficult to do? Does anyone have any experience of this?
3) Finally, if the worst comes to the worst, and I have to complete and hence apply for a mortgage (which I have no chance of getting given my circumstances and the credit tightening), what would happen if I cant secure finance? Will I be forced to complete? Will I get a CCJ? Or bankruptcy? I am becoming increasingly worried about this.


Many thanks for reading this post and I hope you may be able to help me, and offer advice.

Cheers

Nawabshah

[brian]

I think you definitely need to talk to a solicitor who specialises in residential property ASAP - it sounds like you've got yourself into a potential problem you need to get yourself out of quickly.

It's possible the contract has a cooling off period from which you can withdraw without penalty if that's the direction you want to go, so talk to a professional as quickly as possible regarding your actual options.

[orian]

Hi there,

Like Brian I to feel that you should speak to professional conveyancers or solicitors. There are lots of conveyancing firms like Convex that can give solve your queries and give you advice on how to proceed from here on. All the best.

[Richard Webster]

Sue your solicitor! Any solicitor who did not give the severest warnings to a would be buyer in this sort of case would be negligent.

Exchanging contracts without a mortgage in place that would still be available when the flat was completed would certainly not be advised. If you never intended to complete the purchase and were going to assign the contract to someone else, then your solicitor should have pointed out that you would not necessarily be able to do this at a worthwhile profit and you should accept the risk of taking such a step.

Unfortunately builders manage to sell their "apartments" (the description immediately adds £25K to the value) because there is nothing out there with which you can make a genuine comparison and so they just invent a figure...Yours sounds like the kind of thing that because it is higher spec is wworth more than an average flat but the big question is "How much more?"

I cannot imagine there will be anyone out there who will want to buy the contract off you, unless you pay them to take it! Have you checked with your solicitors that the contract actually is assignable? In a rising market some builders did not like the idea of buyers making a profit so insisted that the buyer actually completed the purchase.

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.

[Lioncane]

You are in a bit of a pickle, and I feel that I may even know of this property firm and the actual development, other than seeking advice from a professional property solictor, your only other exit route is via the assignable contract that you mentioned, though this would mean lumbering some other no doubt unsuspecting individual with the same problem, and I am not sure that you would want to do that.