Buying a New Build Property
Do you like the sound of being the first person to live in a property? Perhaps you are looking for the flexibility of being able to choose the design and finish of your new house or maybe you are tempted by incentives such as kitchen upgrades and land tax (LBTT) contributions? These factors draw many buyers towards the option of purchasing a new build, but it is important to realise that the process is quite different to buying an existing property and there are pros and cons to each.
Drummond Miller Property can guide you through the process each step of the way and we have set out a brief guide below to help you get started.
Placing your reservation
Once you have found a property you want to buy, you will be asked to make a reservation with the builder. They usually ask for a Reservation Fee to be paid. The amount of this changes with each builder but is usually around £500 to £1,000 and is non-refundable but it is used towards the final amount you pay to settle.
What if I have a property to sell?
The market for new build properties is fast and if the development is popular, the builder might not accept your reservation until you have sold your own property, or at least have an offer accepted. If you are in this position, our estate agency team can help.
Alternatively, the builder may offer a part exchange deal. This means that the builder will buy your house and sell it afterwards.The benefit to this is that you don’t have to worry about finding a buyer for your house who can be flexible to meet the same completion date as the builder. The downside is that they will usually pay a lower price than you would achieve if you put your property on the open market.
How long will it take?
One of the biggest differences compared to buying an existing property is timescales. With a new build property, the date of entry is generally determined by the builder and depends on when the property is complete.
When you reserve your plot, the builder will usually give you an estimated completion date. This will be a broad period usually, for example, “in March or April”. It will often be around six months from when you make the initial reservation.
An actual date of entry will be determined further along the line. Although the builders will aim for this date, last minute delays can occur. The Council also needs to inspect the property and sign it off as “fit for habitation” before you can move in. Sometimes Council inspections can lead to further work being required, which would then delay the date of entry by a week or so.
It is worth keeping in mind that most mortgage offers will expire after six months or less and so you may have to request an extension.
The missives (contract to purchase) are usually concluded very early on. Many builders insist on having concluded missives within fourteen days of your reservation which is why it’s important that you have the sale of your own property progressing before you place the reservation. A deposit is usually payable to the builder at the point of the missives concluding.
When the proposed date is approaching, the reports and builder completion documents will come together – we will take care of this for you and provide guidance on any conditions you will need to know.
On the day of completion, the funds will be exchanged for the keys and the property documents. The builder will usually meet you at the property to handover the keys and give you a walkthrough the property. Then you just have to move yourself in and decide where your furniture will go!
Considering buying a new build and looking for advice or a solicitor to manage your purchase? Get in touch today.