This type of a guarantee in effect means that the developer is agreeing not to reduce house prices further. Significantly, this does not guarantee that the value will not reduce. Also, this guarantee is enforceable against the developer only, it will not apply to second-hand homes within the development nor will it apply where the banks seize the properties in the event of insolvency.
This guarantee scheme was introduced by developers in an attempt to stabilize the property market and to create a "bottom", however, this is a false bottom and it will not accurately reflect market trends in the current market.
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"What developers are trying to effect is a false levelling or bottoming-out of the property market; however they can only control the price not the value and this is where buyers may potentially lose out," Carol Tallon, Director Buyers Broker Ltd said.
This scheme will benefit buyers who have been sitting on the fence or waiting for prices to drop within their chosen development. Those buyers can now purchase without fear of further reductions by the developers after they compete the transaction.
Buyers Broker agents nationwide are advising clients and buyers wishing to buy into this price guarantee scheme that while the price is fixed, the value-added extras are entirely negotiable - do not accept the standard package offered, further value can be achieved.
Finally buyers, are reminded that where one developer restricts himself on price, neighbouring developers will be more than willing to negotiate with you and all of the market forces are in your favour at the moment.
Log onto www.buyersbroker.ie for more information.
(JM/BMcC)
