Buying new property

Tinkerbell55

We are 6 years from retirement and are hoping to buy a new property. We are finding this incredibly difficult as upon going to view new developments we are told we cannot put an offer in or a deposit on a property as we still have our existing home to sell.
Apparently we have to sell our home and incur the added expense of moving in to rented accommodation and storing our furniture until the new house is ready which can be up to a year away.
The explanation seems to be that the developers want to exchange contracts within 28 days and receive our 10% deposit on a property that sometimes hasn't even been started!
Is there some way around this?
Do all developer operate this sharp practice?

Noctu

You can't really make a proper offer on a house with just the hope that your property will sell. You're not in a proceedable position right now.

I'm guessing from your post that you're looking at new builds - if so, have you considered the option of part exchanging your current property with them? Or asked about the options of reserving a property?

To be fair if you were buying a second hand house noone would accept an offer from a non-proceedable buyer anyway - what if it then takes you a year to sell? What if you got much less than you anticipated and couldn't afford the new house? etc etc.

If you wanted to sell quickly you could look at auctioning, however as you've mentioned you'd need to rent before you could move into your new home... aren't there any new developments in your area with almost-finished homes which you can part ex on?

Gwhiz

Agree with Noctu.

The developer may deal with you once you have exchanged though. I'd focus on getting your house sold and then start looking..

Tinkerbell55

Yes we did ask about both these options.
They would only part ex if we were buying a larger property-we are downsizing- also wouldn't entertain us reserving a property if we put a deposit down to reserve would have to exchange within 28 days as per their t&cs.

kataklysm

That's what we've always been told. You can reserve as long as you are 'under offer', but you'd still need to rent or stay somewhere unless you had a very patient buyer (ie waiting 6 months plus).. and there is always the possibility of the sale falling through meaning you would lose your chosen plot etc. In my mind, I'd prefer to get the selling out of the way, find a place to rent for a while, then see what can be reserved. It is convoluted, but if you are certain that you want to be in a particular development, I'd like to think that it's worth it in the end.

Perhaps it varies from place to place, but is that how everyone who purchases a new build does it? As in, right now there are thousands of displaced families up and down the country living in cheap studio apartments waiting for just the right plot to appear? It's like a secret society

Poppy9

Glad you've ruled out part ex as they will not give you a fair price.

Twice I've looked at new builds, once as a cash buyer as we had sold and were in rented and again as an option for downsizing (which we did not need to sell our house to proceed). Both times decided against as while we could downsize to the smaller house we couldn't down size to living on top of our neighbours with a drive way that was barely wide enough for OH motorbike or parking outside our front window.

I have to say having seen the 3 estates we were interested in after completion I am glad we didn't proceed. I find it hard to visualise plots into completed streets. Where I live land is scarce for new builds so they pack them in.

The other thing with new estates is they attract young families, do you want to be living on an estate where children are playing out on their bike, football etc. One person I work with made this mistake. She's early 60s and is annoyed at kids kicking a ball against her boundary wall.

If you are dead set on new build do you have a mortgage on current house or is it all equity. Can you release the equity to buy a new house without selling? Renting is dead money and if you rent for over a year it's going to cost you at least £6000 in rent.

Mobeer

28 days to exchange and 10% deposit sounds fairly standard. You need to agree a sale before making a reservation, then progress to exchange on the sale before\when exchanging on the purchase. And expect the completion dates won't line up quite right and hence figure out where to live in the short term.

Your solicitor might be able to get a more precise date than "up to a year", but it will only be an estimate on completion.

The only other approach would be to exchange on the purchase without yet exchanging on a sale, which would be an absolutely huge risk to take on.

Little_Miss_Shopaholic

Hi OP

I have recently reserved a new build due for completion in January, I am selling my house and was unable to reserve my plot until my house was sold subject to contract, which they checked with the estate agent and my financial situation was checked by their financial adviser even though I had a DIP.

As soon as the papers are received by my solicitor I have 28 days to exchange. My buyer will not want to wait until January until completion so I will be moving in with family until then.

I think what you have been told is fairly standard, my developer would not entertain any reservation until I was in a position to proceed and even then they made it very clear I was in a risky position as it's linked to a sale and I need a mortgage!