Buying off plan process?

Catherine21_2

Hi we have looked at a house that is not due to be completed till next March, what is the process financially if we decide to buy?
I guess mortgage offers dont last that long and yet I think they talk about completing within a month? Can someone explain this in plain english to me please???

Thanks
Catherine:j

poppysarah

You buy something that doesn't exist and hope they don't go bust and actually build it.

I've always thought it's a bit mad - but apparently people do it all the time. Don't expect to haggle.

Get a good solicitor who'll tie them in firmly with appropriate consequences for them if they don't finish on time AND sort out so your mortgage is all tied up. Possibly impossible at the moment though.

badmoon

I'm buying off plan and about to complete actually (well hopefully). Mine's been a fairly long process which started back in October/November.

Exchanged at the end of November, and the mortgage offer was issued in November and expires at the end of July. It's run fairly close to the wire but I had a longstop date put in for a week before the mortgage offer was due to run out so that if it wasn't all ready to complete by the date, I could walk away (i'd lose valuation fees etc.,)

I'll know more in a couple of weeks as to how it's worked out for me and will update then. Hopefully it's all to the good.

Good luck to you.

Kyrae

Hiya! Bought off-plan last year and moved in a couple months ago, and it was very stressful but totally worth it in the end My post here might help: https://forums.moneysavingexpert.com/discussion/2295261

googler

A lot depends on the financial security (or lack of security) of the builder/developer. It was fine in a healthy market, where there was no doubt that the developer would sell all the units, no doubt that he'd have the money to do so.... but today?

As previous poster said, you're committing to something which hasn't been built yet, and, depending on the way the markets go, may never be built.

You need your own solicitor to ensure you have the appropriate exit strategy should the developer go belly up.

Richard_Webster

I would tell the builder that you have seen lots of second hand properties in the area that are a lot cheaper and you might just consider theirs if they gave you a substantial discount.

I hope you are not trying to sell something as well, because if you are your buyer is unlikely to wait.

silvercar

The downside is that a lot can change between when you exchange and when you complete - including the completion date.

You need to tie the builder to a reasonable timescale, so that you can walk away if the build is delayed massively.

Remember you will be agreeing a fixed price now for something that will be worth market value at that time. That could leave you paying over the odds.

Also think about your mortgage. You will be unlikely to secure a mortgage with an end date more than a few months away. So you will be relying on getting a mortgage nearer the time. Your situation and the mortgage market may change in that time. You need to allow for that.

I would also insist on an assignable contract. That way you have the option of selling the property before you complete. It's a further safeguard against the unlnown.