Buying A New Build - Steps Involved

mattb87 · 16 March 2017 at 8:13PM

Hi all,

So I am a first time buyer, looking to buy a new build house (off-plan). I'm trying to get the whole process straight in my head. I've put together a first draft of the steps involved as I think they will occur. I'd be super super grateful if people could review it and suggest improvements if I have something wrong!

Thanks

Reserve property with developer
Complete Help To Buy Application
Contact A Conveyancer / Solicitor
Contact Mortgage Broker To Find Mortgage lender & mortgage
Survey?
valuation?
Solicitor reviews contract?
I sign contract and deliver it to developer where we exchange and pay deposit. At this point, completion date is agreed.
agree options/upgrades with developer and pay for them
Completion -> instruct solicitor to transfer funds ?
snagging list?
pick up keys from developer

alex_163163 · 16 March 2017 at 8:16PM

realised I didn't explain myself properly on my original post! What I meant was, at the time of reservation make sure you know what is included and try negotiate for extras to be thrown in 'free' as incentives e.g. Flooring to be included, back garden to be turfed, kitchen upgrade etc.
Also ask if the developers will pay the stamp duty is a common incentive.

ceecee1 · 16 March 2017 at 8:22PM

Check and check again if it is leasehold or freehold. If it is leasehold get it in writing to show how much the ground rent is, how often it increases and by what amount.

There is a whole host of people who now own houses which are unsellable as they have leases which double every 10 years. They face having to pay either £9k a year in ground rent or upwards of £40k to buy the lease.

Depending on the developer some people even have to pay the leaseholder for permission to change the carpets or the colour on the walls.

Google national leasehold scandal for more information

Chanes · 16 March 2017 at 8:22PM

Leasehold or Freehold? If it is a leasehold property you could join this group for advice, there seems to be some serious issues with new Leasehold properties. https://www.facebook.com/groups/786983251448976/

alex_163163 · 16 March 2017 at 8:26PM

Also, finding out if you can get a mortgage needs to come higher up the list. You can't really reserve a new build until they know you are in a proceedable position - i.e. You have the deposit and can afford a mortgage. They will likely ask you to speak to their associated mortgage broker to assess this first. But please be aware you don't have to choose this company to apply for the mortgage through.
I would always recommend using independent mortgage broker and solicitor, not the ones the developer suggests. Even though the developer may offer you incentives to use theirs.
The broker will also apply for the HTB loan for you.

You should be getting quotes from solicitors from the outset too. When you reserve the plot, they will ask for your solicitors details. You can change them but would be easier if you know who you are going to use when you reserve I've found.

Also with an off plan new build, you will likely not agreed a completion date until much further down the line. Exchange will be pushed for within 4-6 weeks of reservation, but completion will be on notice. Do you know when it is due to be finished being built?

kingstreet · 16 March 2017 at 11:03PM

This is the way we do Equity Loan cases in England;-

Check HCA Affordability Calculator
Obtain agreement in principle
Preliminary reservation done with builder and solicitor selected
Property information form and reservation submitted
HTB - EL Authority To Proceed issued (ATP)

All the above is done in the first week.

Formal reservation completed and fee paid
Full mortgage application submitted
Lender valuation done and supporting docs submitted
Mortgage Offer issued
Solicitor submits Authority to Exchange (ATE)
Contracts exchanged with completion "on notice" when build over

All of the above is done within 28 days of ATP issue.

Property finished and kitted out to buyer's spec
Demonstration visit and snagging inspection
Notice given
Solicitor submits Forms 1 & 2 for Equity Loan release
Completion takes place, keys and money change hands and mortgage payments commence.

All of the above several months later and can be upto nine months from ATP, upto six months from ATE.

allthe7s · 17 March 2017 at 7:13AM

alex_163163 wrote: »

Options and upgrades on a a new build must be agreed at the same time as you reserve!

Not necessarily - we haven't had to yet. The mortgage gets agreed and survey done 1st, our options meeting hasn't even been arranged yet.

ap1985 · 17 March 2017 at 5:13PM

mattb87 wrote: »

Hi all,

So I am a first time buyer, looking to buy a new build house (off-plan). I'm trying to get the whole process straight in my head. I've put together a first draft of the steps involved as I think they will occur. I'd be super super grateful if people could review it and suggest improvements if I have something wrong!

Thanks

Speak to a mortgage broker and Get an AIP
Reserve property with developer (usually require a £500 reservation fee)
Complete Help To Buy Application - mortgage broker can do this if they are specialist in the new build market
Contact A Conveyancer / Solicitor
Developer will complete a reservation form which will be sent to the solicitor and your mortgage broker
The mortgage broker will do a full mortgage application with the lender which is suitable and most lenders will take a valuation fee at the start of the application and instruct valuation through the mortgage process
Please note the developer will require exchange in 28 days but your solicitor should know this if they are experienced with help to buy
the solicitor will then review contract and a copy of the mortgage offer and help to buy offer should be sent to him. You will be called in to sign the contracts and pay the deposit at this stage to the solicitor who will then send it to the developers solicitors. With new builds usually you get a vague completion date as we did and this was confirmed by notice of completion closer to the time it was due to be completed.
Any upgrades should be agreed with the developer before completion and any incentives from the developer before exchange as this may have to be disclosed to the mortgage broker.
Upgrades will have to be paid directly to the developer.
When the solicitor receives the notice of completion from the developer they will request funds from the lender and transfer them to the developers solicitors. If you have signed all documents you won't be needed at this stage. After the funds have been transferred over you will be able to pick up your keys from your developer. My husband and I did our snagging the same day we picked up our keys and let them know of any issues. It is always advisable to do this as soon as possible.
Hope this helps. If you have any further questions let me know as my husband and I have just been through the whole process ourselves recently. Good luck with it all

Futuristic · 17 March 2017 at 5:40PM

allthe7s wrote: »

Not necessarily - we haven't had to yet. The mortgage gets agreed and survey done 1st, our options meeting hasn't even been arranged yet.

You really should be discussing options before, now they control you and the prices. They could double prices on every option and you won't be able to negotiate.

allthe7s · 17 March 2017 at 5:53PM

Futuristic wrote: »

You really should be discussing options before, now they control you and the prices. They could double prices on every option and you won't be able to negotiate.

They gave us a book with the prices of all the upgrades so they can't change the prices.

Katiejane13uk · 27 March 2017 at 10:49PM

I have set up national leasehold campaign Facebook group.

Do.not buy ANY leasehold property. It's a national scandal.

MP's describe it as legalised extortion and the next PPI scandal.

It's a mess.

Developers will sell your freehold onto greedy 3rd party investors and then u become someone else's long term investment. Don't do it. !!!

PLEASE READ BEFORE POSTING

Buying A New Build - Steps Involved

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