What to ask/expect of a small developer?

Claremac

We like the look of a local new-build (much to my surprise as I don't normally like them!) and are arranging a meeting with the developer. It's only 2 houses in the middle of town so not some big company. It has gone on with an agent today but I had already contacted him directly so won't be going via the agent. Are there any particular questions I should be asking? I thought that we could ask to see something else they've built and would it be possible though for an internal garage to be chaned to living accommodation?The houses are nowhere near finished so he has already said that we could hae some input into the finish etc.
Also, buying through a developer is completely new to me so, for example, if we can agree a deal how do we guarantee that we will both stick to it - do we have to pay a deposit? I have a million and one questions so any help gratefully received.

Doozergirl

The problemn you may have with the integral garage is that new houses must have a certain number of parking spaces, therefore if an integral garage is the only way you meet that specification then you must have one at some point. You will need to check whether that garage is part of the PP otherwise I'm sure the developer will come to some agreement.

Whether you can look at another development - they are probably all sold if they are a small company. You might be able to look at photos, perhaps find out where they source their kitchens and have some say but ultimately a small developer will not be able to change their design too much without you exchanging contracts.

Have a chat sand a walk around and get yourself an idea of them. Ulitimatley being friendly and keen will get you far further than being uptight or aloof. Think how you would like someone to be if they wanted to buy your house - if you behave that way, the developer if ever they were inclined, will go the extra mile for you.

theGrinch

I would expect the developer would want to see some financial committment before the changes get too personal.

Claremac

Thanks for the replies. I wondered about the parking spaces issue. There is definitely room on the drive for one car or maybe 2. I can understand that a developer would want us to show financial commitment before making any changes but how much would be reasonable? Obviously I will be asking my solicitor should anything come of this but interested to know what anyone thinks?

tek-monkey

Isn't this what they call buying off plan? I'd be most concerned about a mortgage, as whatever they agree now they may not offer once the house is ready. If prices fall they will offer you less, as the house will be worth less, and you will already be tied to purchase at the pre-agreed price. Depends how far off completion they are really.

Claremac

Looking at end of January for completion of house so can't see prices dropping by too much by then although I think they will drop in 2010. You may ask why I'd still buy. It's a great long-term house in the perfect location and I'm not stretching to buy it. Makes sense to me! Of course a valuation may come in lower in any case but I'll cross that bridge then.

tek-monkey

I'm not entirely sure how these things work, but am I right in thinking the lender can't value the property until it has been built, and you need to commit before it is built? That is my biggest worry, exchanging on something you don't really know you can pay for. Of course if you have a big deposit you can negate some of those worries, but not all.

Claremac

My solicitor and building society are on the list of people I need to speak to before I see the developer on Tuesday morning! There is no way I will be exchanging before having the mortgage agreed. Fortunately we do have a big deposit.

Claremac

Spoke to the mortgage lender and he said that they do an initial valuation while being built and a second valuation when it is finished (wonder who pays for those!!!!!!). Spoke to the solicitor but it was very noisy. I think she said that the developer would expect exchange within 3-4 weeks (eek!) but I couldn't figure out whether she was saying that you exchange before receiving a mortgage offer. Speaking to developer tomorrow.

marcg

You can exchange whenever you like. 3 to 4 weeks would be the soonest from instruction of solicitor.

Developer will take a deposit to make any changes to existing design. Otherwise they may be abortive.

Parking won't be an issue unless it is in a conservation area. Conversion of an internal garage to living accommodation is permitted development. Check with local planning office to be sure.

If you are going ahead with it then you need to make sure that the developer finishes the house as well as he would do if he didn't have a buyer. There are independent snagging companies that you could agree he would have to satisfy in order to release the final 10% of funds.

In fact, if the developer has subcontracted the build to someone else then he will be retaining 5% from the contractor for 12 months for the defects liability period. You may ask to retain 5% from the developer for 12 months for the same reason.

Your solicitor isn't going to like these ideas since they just want a quiet life but consider that if you don't retain any money there will be no leverage to make the developer do what he ought to since (a) he has all of his money (b) he's only a small guy so doesn't need to worry about bad publicity unlike Bellway.

Check also that the houses will have full NHBC warranties. No reason why not - small builders can register with the NHBC the same as big builders. Registration was £600 when I left a small developer last year.

Richard_Webster

Check NHBC - but solicitor should also check that planning conditions have been complied with. This is a particular problem with small builders and small developments. There could be conditions requiring soil remediation if it as brown field site. When you come to sell, buyer does an environmental search and it fails but this can be rectified usually be showing that remediation conditions were complied with. Trouble is Council often is slow to check this kind of stuff so seller's solicitors have to be pushed to push Council (and builder has to comply!). Once builder off site more difficult for Council to secure compliance....

I've got a case at the moment where the builder was supposed to put a hard surface on the small stretch of road serving the newly built houses and hasn't done so and the local Parish Council is making a fuss and asking the district council to take action, In this case we have checked it and it isn't a problem for my buyer client (who is not the first purchaser) but it is the kind of thing that can crop up and needs checking.

Large national builders have a reputation to keep up and usually have a sales office somewhere on a new estate nearby where you can camp out and complain loudly about the problem with your newly built house whenever a potential buyer appears - more difficult to do this with small builders who don't have onsite sales offices and may not be building anything locally for sometime!