Urgent advice needed please!

okborednow

Hi Everyone,

As i said in previous posts my fiance and I are looking to buy a new build property using help to buy later this year. We found a house we were interested in but it's in a later phase of the development and weren't expecting it to be released for a few months giving us time to get enough for our deposit.

Today however the sales woman from the development has called and said it's available now! I initially said we were sad but we couldn't proceed as we simply didn't have the money in place to exchange in 28 days which i believe is standard with these purchases. She called back and said that she had permission from head office that we could exchange on a much smaller amount and would only need the full amount when the house was completed in Nov or Dec.

I'd love to believe her as we really want this house but from what i've read a sales person will generally swear black is white if it gets them a sale. Can you all give me your thought on how i should proceed please?

Thanks

pinkshoes

Make sure you get EVERYTHING in writing BEFORE handing over any money, and read the small print carefully.

Are they having a cash flow crisis and need to exchange on a few properties to get some cash?

I bought a newbuild, but didn't exchange until the building had been signed off as complete! I just paid a £1000 "holding" deposit.

There's no way I'd exchange that far in advance.

I'd also want to know what the penalties are if they don't complete by December. So many newbuilds fail to complete on time!! It could easily be 6 months late!

okborednow

Thanks for the quick reply pinkshoes It's good to know that at least you did reserve without stumping up the full 5% 28 days later so it's not completely out of the ordinary. The builder is Barratts and I know their year end is June so maybe they need to do some accounting jiggery pokery listing the house as sold at a profit even though they won't get the money til later. How did you do with negotiating? I was hoping to get some stuff thrown in but feel quite pressured now

pinkshoes

Mine was a small builder and 17 flats. Negotiation was a no go area as it was the peak of the market and properties were selling in weeks! They actually put the price up of all the flats they didn't sell initially!!

To be honest I'm rather suspicious of their tactics. I'd negotiate VERY hard on the price if they want you to exchange now. Make it in line with similar older properties in the area. Stuff thrown in is so cheap to them!!

okborednow

That's good advice thanks. I think i'll have to ring up tomorrow now i've had time to think and get more info on exchange deadlines, amounts etc.

dgtazzman

Also keep in mind that most mortgage offers are only valid for x amount of time (6 month after principle I believe is standard) and I have read here that people couldn't get a mortgage for a newbuild before the actual foundations had been laid.

I'd be making a fair amount of enquiries before jumping on the sweet talk. The 'exchange' she is talking about, actually does just sound like a holding deposit.

I'd also be making very sure you'll have the money available when the time comes, as you said you haven't got it available right now, you don't want to find you don't have the money for the deposit when the time comes...

okborednow

Thanks for your reply i'm going to call her today now i've had time to calm down and think and try and nail down a few details. In terms of the deposti obviously in the future nothing's certain but i'm fairly confident we would have been ready to proceed in a few months as we're putting away 1k a month at present.