Buying a newbuild

bigfreddiel

I'm buying a new build, only the foundations have been laid - its the last on the plot, so will not be ready till next spring (March 2011 approx).

I'm guessing that the procedure is much like any other property purchase with one difference - the time between exchange of contract and completion.

I presume once agreement has been reached on the price and the building you exchange contracts and hand over 10% of the purchase price.

When the build is complete and been inspected etc (snagging survey) March 2011, then you complete and handover the remaing funds.

Is that correct?

Cheers

fj

betmunch

are you about to exchange contracts now?

or have you just paid the reservation fee?

I dont see how you can agree a price now for what a house will be worth in March 2011, and that assumes the build is completed on time

betmunch

just seen your othe thread - your buying in cash so obviously you can spend yor money however you like

bigfreddiel

betmunch wrote: »

are you about to exchange contracts now?

or have you just paid the reservation fee?

I dont see how you can agree a price now for what a house will be worth in March 2011, and that assumes the build is completed on time

Well spotted, yes cash buyer - and I read your second answer.

Your point on knowing what the proeprty will be worth next year is exactly what I thought.

I guess you could negotiate the price now to track the fluctuations in house prices between now and next year - if it goes down I pay that percentage less, if it goes up I pay that percentage more, or as I expect the developer and I will agree a price and thats it - either of us may benefit from the house price movements.

So, lets assume i have negotiated a price - what happens next -

Pay a reservation fee?

Exchange Contracts?

Complete?

So what is it, when do the above happen and what are the payments?

I envisage agreeing a price and completion date with penalties for late completion.

Pay 10% on exchange of contracts.

Pay remainder on completion next year.

Or is it something else?

Cheers

fj

bigjl

I will never buy a new build again, bought for £250k in 2007, now valued at £200.

Some of my neighbours bought in 2006 at £270k.

The developer then started building nicer developments round the corner with house preced at £215k.

Nop, never agin, though everybodies experience will be different and good luck with your new purchase.

Kyrae

We agreed a price, paid a fee to reserve the plot (about £100 I think), then a few weeks later paid the 10% deposit and exchanged contracts, then once the house was built we completed and paid the rest of the money. Think that was pretty normal as far as buying a new build goes

G_M

Build dates/Completion will be left vague. And can slip. If you're agreeing a price, make sure there are penalties (price reductions) for the builder if he delivers late.

And be wary about what will be around your spanking new house. You might be surrouinded by a building site, the access road might still be a dirt track......

bigfreddiel

All good advice and points - some people have bad experiences and some good - understandable.

Point 1 - the guide price, in my case its valued correctly - I have been looking into the area and market for some time - i'm happy with the price.

Point 2 - only 5 houses in this development and on the development area boundary of the town - so no more to be built. This is my only area of concern so I will check with the planners that no more development can happen - never say never tho'!

Point 3 - I'm buying the last house so it won't be a building site when mine is completed.

Point 4 - The law about completion of new builds was tightened up last April so developers should be tied down to complete on an agreed schedule.


so I think its as risk free as possible now.

thanks to all that replied

fj

Doctor_Gloom

I can't believe anyone is seriously contemplating buying off-plan after what's happened over the last few years. It didn't take long, did it.

bigfreddiel

Doctor_Gloom wrote: »

I can't believe anyone is seriously contemplating buying off-plan after what's happened over the last few years. It didn't take long, did it.

Not entirely sure what you are implying - two of the five properties are complete - not sold tho' so maybe they are over priced!

I guess you mean the developer will go bust or the houses are over valued.

I must admit i'm beginning to change my mind now.


cheers all

fj

nearlynew

Ignoring the fact that prices are falling....


The "contracts" that you "exchange" contain the terms of the sale.

You and the seller can put whatever terms you like in there.