Steps to Buying a New-Build Home

Buying a home can be a stressful time. But it can be made even more stressful when you do not know what to expect.

We are seeing a massive rise in new build properties at the moment in the UK. If you have decided to buy a new build home instead of one that is already being lived in, the process is slightly different. Instead of buying the property from a previous owner, you may be buying it ‘off-plan' (according to the planning drawings) before it is actually built, or from the housebuilding company that built it.

Find a new-build house

If you have decided that you would like to live in a brand new house that has never been lived in, the first step is to find one.

It is important that you first do some research into the housebuilders that are available to you as the quality of their work can vary greatly. Do your research, look into the company as well as different sites, and if possible, speak to some homeowners who have already bought a property from that particular company.

You should not only look at the plans of the individual property but also investigate the area and amenities – will there be additional shops, schools, medical facilities needed to serve the boost in the number of people living in the area, for example.

You should try and take a look around a show home on the site that you are interested in. it is important to remember, however, that this will be the best version of that property that they have – in probably the best location on the site, with the best views, etc. Try to bear this in mind when you are looking round it!

Once you have found a property that you are interested in, you should get in touch with the housebuilder to find out the price and what is included in it. They will sometimes offer incentives to buyers and can be open to negotiation. You should also ask them for the timelines – when they expect to have the property completed (a short-stop date) and their long-stop date (when they must have the work finished by).

Get your finances in order

Before you begin to get involved in contracts it is important that you have your finances in order. This means having your mortgage agreed in principle. If this is not done before you exchange contracts with the housebuilder, then for whatever reason the mortgage does not come through, you could find yourself in a lot of financial and legal trouble.

It is recommended that you speak to a mortgage advisor as they will also be aware of any government schemes that are available to you that could help (e.g., Help to Buy Schemes or lower stamp duty).

Make an offer

The next step in the process is to make an offer and pay a reservation fee. You should know roughly how much the housebuilder is looking for, so make an offer in that ballpark – according to what you are willing to pay for the property.

You will then have to pay a reservation fee – usually somewhere between £500 and £2000 to hold the property.  It is expected that the contracts will be exchanged within 28 days of this (another reason why it is important to already have your mortgage agreed in principle) and this value will be deducted from the total price upon completion of the sale.

Once the reservation fee has been paid, the housebuilder is legally obliged to send you details of the property, including:

  • The fee amount
  • The price of the property
  • What is included in this price (parking, for example)
  • The date when the reservation agreement will end
  • Management fees or service charges that will need to be paid by the buyer
  • The terms and conditions that will need to be followed should the buyer not go through with it during the reservation period

Appoint a conveyancing solicitor

It is important that the next step is to appoint a conveyancing solicitor. Your solicitor will ensure that the contracts are sound and fair to you. They will ensure that you are protected throughout the process and help to ensure that there are no problems.

It is also important at this step that you get a mortgage offer from your mortgage company. If you are buying off-plan, they will organise for a valuation survey to be done from the property drawings, and if it is already built, they will organise for a surveyor to attend the property.

It is important to remember that you have the right to choose any solicitor you wish to carry out this part of the process. Sometimes housebuilders can encourage you to use the same solicitor as them, but this is your decision.

You have 28 days after the payment of the reservation fee to exchange contracts. Here, most of the work is done by the conveyancing solicitor. They will:

  • Check the contract
  • Draft the transfer or lease
  • Check the title to the property
  • Check the planning documents
  • Clarify any doubts with the seller’s solicitor
  • Look at all of the other paperwork
  • Ask you to sign the contract

You will then need to pay the deposit on the property which is 10% of the total property price (regardless of how much you are paying upfront). This deposit is paid to your solicitor who will then transfer the money to the housebuilder’s solicitor.

Have a snagging survey conducted

When it comes to new build properties, there are almost certainly going to be small things that are not quite finished properly or that are not quite right. By conducting a snagging survey, you will identify these things and report them to the housebuilder – before you complete on the property (but after you have exchanged contracts).

The housebuilder must carry out all of these repairs within two years of you having moved into the property.


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