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6 Steps to Buying a New Build Home
The following is a general guide to the stages of conveyancing and procedures when buying a new build property:
- Reservation – Once you have chosen your home the sales advisor for the Developer will guide you through the various documents to be completed and signed. These will include a reservation form and disclosure of incentives form if you are having a mortgage to help buy your property. You are also likely to pay a reservation fee which can vary from Developer to Developer and if the reservation is ever cancelled sometimes you will only get part of that back. If you are purchasing your new build property with the aid of the Help To Buy scheme then the Developer advisor will talk you through that as well as inform you of the consumer code for house builders which most of the larger Developers adhere to. The sales advisor will also show you things like the landscaping scheme, the drainage scheme and other such matters relating to the site as a whole.
- Instructing Your Lawyer – The sale advisor will recommend a firm of solicitors that they will have used previously for plot purchases on the same development and sometimes incentives are used for you to go with the panel lawyer. However the choice is yours. A copy of the reservation form and other paperwork is sent through to your lawyer. Normally only a matter of weeks is set out by the Developer for an exchange of contracts to be achieved. So the process is a lot quicker than buying older properties.
- Mortgage – If you need a mortgage then you will need to apply for one quickly. The sales advisor can often recommend reputable Financial Advisors should you need help. A representative from the mortgage company is likely to attend on site to carry out a valuation in the coming weeks. Sometimes a second visit may be necessary if the plot you are purchasing may not be ready for a number of months.
- The Legal Process – Your lawyer will check the title to the development and will also review the planning documentation and warranty documentation relating to the property. There are often numerous documents involved in the purchase of a new build property and often many queries have to be raised with the Developers Lawyer to fully understand the site set up and to be able to report to you and any mortgage lender on. Searches are also put in hand and the development Contract and Transfer reviewed. These are important legal documents which will set out your rights and what burdens may affect the property to be sure it is suitable for you to purchase. A lot of Developers have restrictions on pets, satellite dishes, alterations and additions and the parking of commercial vehicles. So make sure you check for any restrictions there might be.
- Exchange of Contracts – After about 4-6 weeks after reservation, (provided the mortgage offer has arrived and all search results are back and all legal documents are in place), an exchange of contracts can be achieved. At this point a 10% deposit would need to be paid over to the Developer and the transaction becomes legally binding. Depending upon whether the plot is almost finished will depend on whether the Developer can give a fixed legal completion date or whether completion is on notice. That means that the Developer would give you two weeks’ notice when the plot will be ready for completion and handover. That timing is in the Developers control and often can be different to that you were told at the time of initial reservation. Before your home is finished the Developer will get in touch with you so that you can attend and go through quality inspections and home demonstration both internally and externally. The property is also subject to an inspection by the NHBC and the Local Authority Building Control in some circumstances. The home demonstration will cover everything from how the heating system works together with the appliances and the location of you fuse box.
- Legal Completion – On completion day, the Lawyer sends through to the Developers Lawyers the balance purchase price payable for the property. Upon receipt of funds the keys to your new home on site will be released to you. Your lawyer will pay Stamp Duty Land Tax and attend to registration of you being the new homer of the home at the Land Registry and will provide you with copies of your electronic Deeds once registered.