A guide to buying new-build homes.
Never bought a house before? Never bought a home off plan? Let me share with you how the process works so that there will be no surprises when you come to buy your new-build home.
You found a fantastic new-build property, and you are ready to buy it.
Depending on the market conditions, many developers will not be very negotiable. However, there might be some margin for negotiating. Some developers will not reduce asking prices, but they might offer some form of incentive. This could be a furniture pack, a stamp duty cash back or solicitors fees paid etc.
My recommendation would always be to keep it as simple as possible and get a price reduction, but if that is not an option, the other options also work well.
Most new-build home sales start off with a reservation form and a small reservation fee. This form contains all your details, the property details and the developer's details. It is a simple way to formalise your offer and the developer's acceptance of your offer.
The document will also state which solicitors will be used by you and by the developer. How long you have to exchange contracts, and any other vital points to the sale, for example, if the sale includes a parking space etc.
The reservation fee usually is not refundable or only partially refundable. This fee is to secure the home and take it off the market until you exchange, it is also there to cover the agents and developers expenses should a buyer withdraw without reasonable cause.
Exchange of Contracts:
After reservation, you will work with your solicitors to exchange contracts. During this process, the solicitors will do all their checks and searches to make sure you are buying what was sold to you and ensure there is nothing in the contracts or the lease that could cause issues or concern. Should issues arise these can normally be dealt with and, any misunderstandings can be explained.
Most of the time I would recommend using one of the recommended panel solicitors that know the project (if there are recommended panel solicitors). They will have had significant time to study and understand the contracts, the leases etc. all of which will make your life much more straightforward and help with exchanging within the allotted time.
Last step here is to pay the deposit; this is usually 10% (less the reservation fee already paid)
Depending on how close to completion, the home or project is, that you purchased in, there might be staged payments. This will be stated before you make a reservation. Staged payments are often made every six or twelve months leading up to completion.
The payments are range from 5% to 15% on most projects; again this will be stated before you reserved.
As the project progresses the developers and agents will keep you up to date with how the project is progressing. A short while before completion you will be notified to come and take a look at your property. We refer to this as a snagging inspection.
This viewing serves as an opportunity to make sure the property is in good shape and ready for you to complete on. Ensure everything is in order and fault-free within reason. You can hire professional property inspectors to do this, the good ones to wonderfully detailed inspection and report back to you and the developer with what might need some attention.
The developers and their contractors aim to deal with any "snags" found in the properties before completion, though due to supply constraints sometimes a few items will need to be taken care of after completion.
Depending on your contract specifics notice to complete will be served approximately ten business days before completion. This is the time to confirm with your bank that funds can be released to your solicitors. If you are buying with a mortgage reconfirm with the bank when completion is, they can be a little slow sometime to release funds on a mortgage, so don't spring it on them the day before you complete.
Your solicitors will transfer final funds, and you will arrange a time to get the property handed over to you by the developers.
It is yours! Take the time to go through the handover with the developers; they will talk you through all the basics of the property, its systems (heating, cooling, locks, building, access etc.)
There is normally some settling in time for new homes so make sure you get the customer care details and know whom to contact should anything go wrong, it is great to know whom to call should something happen. Some settling and a few small issues are normal, and a good developer and contractor will deal with them swiftly. One of the great benefits of buying new is that when something goes wrong, most of it is covered by the contractors and developers for a few months up to ten years!
As you can see the buying process is a little different from buying a standard home in the residential market, but there is nothing to be concerned about once you know how it all works.
If you have any questions, please feel free to get in touch.