If you are buying a new build property, be prepared as the process is slightly different to buying an existing property.
The main difference is that a lot of new build purchases are done ‘off plan’. You’ll exchange contracts before the property is built and completion takes place ‘on notice’ once the property is constructed. This means that you will actually purchase the property before it’s built. In some cases, contracts can be exchanged for several months or even years before completion takes place.
You should also be aware that there are usually tight timescales involved when buying a new build. Most developers will give you a deadline to exchange of either 21 or 28 days. This means that your conveyancer will need to move quickly to meet this deadline.
If you need a mortgage to purchase the property, you’ll need to arrange this quickly due to the short deadlines involved.
In addition, because there will probably be a long time between exchange and completion, your mortgage offer may need to be extended or even re-applied for. Because of this, you need to ask your bank or your mortgage broker to make sure that your mortgage offer can be extended.
If it can’t, you risk being legally committed to buy a property without the finances to do so.
You’ll probably have to pay a reservation fee for the property. This is payable to the developer when you agree to buy the property. This can range from a few hundred pounds to a few thousand. You should make sure you factor this into your budgeting. The developer can keep your reservation fee and re-sell the property if you fail to meet the exchange deadline.
If you are buying your property ‘off plan’, you won’t be given a fixed completion date on exchange of contracts. Completion will take place ‘on notice’. This means that once your property is structurally complete, a notice will be served by the developer’s solicitors. This notice will confirm that completion will take place in the agreed amount of time listed in the Contract. This is usually ten working days. This is when any mortgage advance is requested and completion must take place within this period.
If the property you’re buying is already built, then a fixed completion date may be agreed upon exchange of contracts in the usual way.
Because there are tight timescales involved when buying a new build property, make sure you choose a conveyancer who can move quickly for you.
For more information about how we can help you buy your new home, call us now on 0117 926 4121 or make a free online enquiry.