Early bird red row?? First time buyer confusion

Grlee

Hi,

I am currently in the very early stages of buying a new red row house. The sales person dealing with our plot doesn’t seem to explain the steps involved in buying a house that is not yet built. I am a first time buyer so I am just asking has anybody been through this process recently and is there any advice you could give?

We currently have around £5000 as a deposit and we are looking to take advantage of the government help to buy scheme. We still need another £5000 for deposit but how quick do we need the deposit if we have at the moment only signed for an early bird on the plot. The house has not been ‘release’ yet as our sales advisor has told us and is not likely to be released for anywhere between 1-3 months with the date of the completed build being after Christmas (again this was sketchy).
My understanding is that the 5% deposit on any given house does not need to be given until just before exchange. But according to the sales advisor once the plot has been released with a given price for the house then we have 28days to have the 5% deposit and our mortgage in place.

Any help would be great as I really don’t understand this process.

Thanks

thedalmeny

Ignore it, builders always put that exchange has to occur within 30 days of reservation.

The 'Help To Buy' process takes quite a while.

I reserved beginning of April and they put 30 days for exchange on mine, due to Help To Buy taking so long and some general delays in getting contracts from builders i'm only now at the point of exchange.. Over 3 months later..

okborednow

I've gone through the process recently with Barratt so here goes...

1) Early bird reservation. This ensures that you get first refusal on the plot when it becomes available.

2) The plot is released and price is agreed with you. At this point you pay a reservation fee of £250-£1000 depending on the builder but this should be counted towards the purchase of the house.

3) From the day you reserve you have 28 days to exchange contracts or the builder reserves the right to sell the house to someone else.

4) When the house is ready you complete, you should ensure that any mortgage offer you get does not expire before this time.

That's the process but a few additional points. We're now on 7 weeks since reservation and we haven't exchanged due to a backlog at the help to buy scheme. As we used Barratt's recommended brokers and solicitors they have said they're fine to wait so it's not set in stone. As your property won't be ready for a while they may be prepared to give you some more breathing space. Also i didn't have my deposit ready for exchange so Barratt agreed I could exchange on £1000 and have the rest ready for completion so there is room for negotiation.

Hope that helps