Exchange of Contracts, new house

Bellyhull

My girlfriend and I have just reserved a plot for a brand new property which is in the process of being built, we have paid the upfront fee and signed the reservation however the property is not due to be completed until November 2010, after we had signed the sales rep stated that they would need an exchange of contracts in June which we thought was odd as it will be at least another 5 months until the property is even ready to step foot in.

We have an apointment to speak to a solicitor in the coming weeks but was wondering if anyone can shed some light on what exchanging contracts actually entails and if this actually the norm exchanging so early when the actually property has not been seen?

Also we are first time buyers, any help/advice would be greatly appreciated.

Dan_1976

It is the norm for off plan and should be outlawed. Once exchanged you are legally abliged to complete the purchase or be taken to the cleaners.

In my opinion you should take this guy/girl to task and get all your money back and walk away. If you lose your mortgage offer or anything happens they will still expect you to complete. They should have told you this before you parted with your cash.

Thrugelmir

Other than see a house you like and pay a reservation fee. Have made enquiries as to whether you can actually obtain a mortgage?

Ditch_Crawler

Recently, my daughter was about to do something similar, but she realised that her mortgage offer would expire before the planned completion of the building work.

She became the one who was putting the pressure on, and the builders finally exchanged contracts with a completion date to fit in with my daughter's mortgage offer.

My daughter's solicitor was amazed at the result, and still insists that she has heard of nothing similar before or since.

If ever you meet my daughter, be afraid...

Senior_Paper_Monitor

Dangerous (and in my opinion immoral on the part of the builders/developers) territory this.

Even with a mortgage 'in principal' in place valuation becomes an issue - and fouls up many such deals.

Some lenders offer extended offer validity period for new builds (and/or will grant extensions) - but not all, and 7 months is the builder/developer 'taking the !!!!' in my opinion.

Have 'someone what knows' read your agreement ASAP and be prepared to use any cooling off period.

Think long and hard about the 'new build route'.

Ditch_Crawler

Senior_Paper_Monitor wrote: »

Even with a mortgage 'in principal' in place valuation becomes an issue - and fouls up many such deals

That reminded me - my daughter also realised that her valuation would expire two weeks before the mortgage offer, and the completion date is actually tied to the expiry date of the valuation.

DC

badmoon

Ditch_Crawler wrote: »

That reminded me - my daughter also realised that her valuation would expire two weeks before the mortgage offer, and the completion date is actually tied to the expiry date of the valuation.

DC

I've got the same on my agreement and contract with my developer. I was given a mortgage offer which expires on 31st July back in November last year, with the solicitor's assistance, we've negotiated a long stop date of 23rd July.

Wasn't a hassle at all thankfully for me in getting the developer to agree to it.

Not getting too emotionally involved with the NB in case it all goes wrong but looking like it'll be built and ready for completion end of June.