buying off plan

gkahome

Hi
we are considering buying a new build off plan. Do builders still expect you to exchange contracts within 28 days i.e. months before it is built? We don't want to sell our house just yet (we sold last year but it fell through twice, and therefore know we should be able to sell within a month) but that could mean exchanging contracts with the builders before we even market our property.
How would this affect our mortgage company's valuation as the house isn't yet built?

The builders say they offer part exchange if we cannot sell in time to move or if our buyers pull out. Do you still think we could negotiate on the builders asking price this far in advance - oops sorry, wanting to buy a house June/July. We are worried that if we wait until we sell our house, say March/April that all the plots may be reserved by other people.

Any advice would be really appreciated.
Thanks

poppysarah

Are there no already built new builds you like?

gkahome

unfortunately we cannot move til after mid June as my daughter is taking her GCSE exams so need to live local to her school.

poppysarah

gkahome wrote: »

unfortunately we cannot move til after mid June as my daughter is taking her GCSE exams so need to live local to her school.

Well why not wait until after her GCSEs before looking?

gkahome

we are concerned that the plot would all be reserved by then

CloudCuckooLand

Some builders want exchange, others taking holding deposits. You need to know their Ts&Cs before you make any decisions, so ask.

gkahome wrote: »

(we sold last year but it fell through twice, and therefore know we should be able to sell within a month)

It could fall through twice again..? Then you would have to part-exchange, accepting their offer which reflects your inability to decline..?

gkahome wrote: »

How would this affect our mortgage company's valuation as the house isn't yet built?

Lenders change their policy quite frequently. Products booked that change 48 hours later and so on. Having a delay of months and you multiply the chances of product/valuation difficulties.

Personally, I would not do off-plan with months to wait after exchange.

Putting down a holding deposit is ok, if its money you don't mind losing.

Off-plan should be pretty heavily discounted already. Compare to similar finished places. If its not, get a finished place?

poppysarah

gkahome wrote: »

we are concerned that the plot would all be reserved by then

Is it the most special place in the area?

I'd really not want to buy a house not yet built.

I'd want to see how it related to the other houses, what the neighbours were like.

Richard_Webster

DO NOT COMPARE THE PRICE OF THE UNBUILT HOUSES with those the builder has already finished on the same estate - but with 5-10 year old similar houses nearby.

If you really want to buy anew house you do not need to tell the site office that - you are comparing them with other second hand houses and judging the value - you tell their site office people that there could be all sorts of awful things happening over the next few months that could depress house prices and you do not want to take the risk to the price must be discounted to reflect that.

Seriously though, why are you so keen to buy new off plan when there must be second hand probably better houses which are better value?

spud211

I bought off plan last year - reserved in may, completed 16th december.

I read lots of horror stories, but really for me it was really simple and relatively painless. I bought off plan on the first day that properties were up for sale on this estate - in fact 50% were reserved day one! (only 23 properties on the estate in total), but mainly as it was the best plot on the development..large garden, waterfront etc. I had seen a shell of my housetype, but not a finished one.

I had to pay a £500 reservation fee at the time of reserving, and then had to exchange within 28 days, paying a 5% deposit.

Valuation was done prior to exchange and came in at the builders asking price - lender in this case was Santander.

I did have an issue around my mortgage in that the product expired, however Santander just replaced it with another (actually better!) product and extended it for me, had no problems at all there.

The builder was Taylor Wimpey - now moved in and very happy with the house.

There are lots of risks, and in your case i'd be a little more cautious (I was a FTB) due to your need to sell your house, but best advice I can give is that if you really want that plot (and most good plots are bought off plan still), then have a chat with your solicitor and broker about the risks from their POV and how it can be mitigated.

Kyrae

My partner and I bought off plan last year, and it all went well for us! The builders offered us an assisted sale, which meant they arranged the estate agent for us and paid their fees to sell our old house, and then we moved into a rental property until the new house was built. That was by far the easiest way to do things as we had the peace of mind of knowing our old house was sold and problem free... though I admit it was a bit stressful having to move house twice!!

Do be wary of the mortage arranging though, as your mortgage offer could expire before your new house is ready and if you've already exchanged contracts then you have to complete even if you don't have a mortgage... meaning the builders can take you to court to get their money. We got around this by making the builders agree to a clause in our contract saying we could pull out and get our deposit back if our mortgage offer expired and we could not get a new one. You can also try and get the builders to agree to a long stop completion date giving you the option to pull out of the sale if the house isn't built before this date... think that clause is harder to get the builders to agree to though!! Few more hints and tips here that I wrote while going through the new build buying...

https://forums.moneysavingexpert.com/discussion/2295261

Good luck!! There's a lot of horror stories out there, but some of us have great experiences with no problems so it's not all bad!!