new build, buying off plan

alibongosoup1912

Hello everone
I really hope someone can help me,
my wife and i are wanting to move properties, we currently have a shared ownership property which we cannot buy outright.
we have seen a local development of new build houses close to where we live and have seen a particular style of house we want to buy.we have been and visited this style of house on other new build sites so made up our mind this is the one we want. we waited until the price release date and then went to the site office as soon as it opened. when we inquired about the particular style and plot number on the plan the first question we where asked was have we sold yet. well no we havent as we wanted to use the capital out of our part share about 18000 plus 10000 we have in savings as 5% deposit plus 20% goverment scheme to buy the new build. we where told we could not reserve a property.please does anyone know what proof we need to reserve a new build property i know we need to have sold our house but what do we need to prove it to the new build company as the whole first phase of this new build is already sold out so we dont want to miss the next phase. any help would be very much appreciated.

chanz4

if you cant stair case, yours will likely be hard to sell

miss_sparkle

I have just bought a new build, we bought off plan and are just waiting to exchange now after our first buyer pulled out.

using help to buy equity, before we reserved we had to speak to their broker just for a chat to see if they thought we would qualify, & then we had to give the details of our estate agent & the sales office must of confirmed the sale with them.
We were not allowed to reserve until we had a buyer for ours, in the end they pulled out & we had to find new buyers but the builders still held the house for us

SelenaLouise

Some developers will ask for proof of funds/ bank statement before they will let you reserve because there is usually a 28 day period in which the reservation will be valid, which means that they won't market or sell the property to anybody else in that time.

I think if you already have a house, which you need to sell so you can use the cash from that sale to buy the new house, this might take you outside of the 28 day period, which is why they might be reluctant to let you reserve as it means them finding another buyer.

Best to speak with Financial Advisor who deals with the purchase of new build using help to buy.

Little_Miss_Shopaholic

I am due to complete on my new build in a few weeks. In order to reserve I had to have a buyer for my house, which they checked with the estate agent to confirm the chain was complete and prove I had the finances to proceed with the sale by speaking to their mortgage advisor even though I had a decision in principal. I also had to be in a position to exchange contracts within 28 days of my solicitor receiving the paperwork from them. I think we exchanged on day 30 in the end as by buyer wasn't contactable. This was about six weeks from the reservation date as it took two weeks for the papers to arrive.

One thing you need to consider is there can be a long delay between exchange and completion, I exchanged at the end of October and my new hose isn't finished yet! I completed on my old house at beginning of November and have been living with family since then otherwise I was concerned I would loose my buyer.

AbbieCadabra

what would happen if you're wanting to buy off plan now for a property that won't even be expected to be ready for another year? we'll have ours to sell but surely the builder can't stipulate that you've got to have a buyer in these circumstances? we'll be happy to put at least a 10% deposit/reservation fee down now & then we'll put our house on the market approx. 3 months before the new property is supposed to be ready (no new mortgage or other finance required).

Millerdog

From the developers point of view, they would not be too keen to accept a reservation or even 10% deposit based on todays prices for a property that wouldn't be ready to complete for 12 months. The reason being that in their mind they could increase the price in a years time so why limit themselves so early on. Hope that makes sense.

lazysundays

From my limited experience, the new build developments we visited were all very strict on this and unsympathetic. Like you say, if the first phase sold out quickly, they won't be too interested in accommodating your needs. It's harsh but all they care about is money & as little hassle as possible. Maybe you could get it on the market now & think about moving in with a parent/renting until your new one is built?

AbbieCadabra

Millerdog wrote: »

From the developers point of view, they would not be too keen to accept a reservation or even 10% deposit based on todays prices for a property that wouldn't be ready to complete for 12 months. The reason being that in their mind they could increase the price in a years time so why limit themselves so early on. Hope that makes sense.

agreed, the market has been pretty steady for the past 18 months or so but we fully expect these apartments to be up for a lot more when completed. we were hoping to get one off plan with a small discount, i think we may be hoping for the impossible!

lazysundays wrote: »

From my limited experience, the new build developments we visited were all very strict on this and unsympathetic. Like you say, if the first phase sold out quickly, they won't be too interested in accommodating your needs. It's harsh but all they care about is money & as little hassle as possible. Maybe you could get it on the market now & think about moving in with a parent/renting until your new one is built?

it's just one block of apartments, but in a popular seaside location, which puts things even less in our favour.

we're visiting the area next week & will call in at the sales office (they have various developments all over the local area) to ask what their general guidelines are in this situation. they've said that they're definitely selling off plan, but the details haven't been released yet.

we could have the option of keeping our current home & renting it out for up to a year, but again i suppose we'd have to prove we'll have funds available (on paper, & will take a lot of financial juggling) to go ahead with the purchase before they accept a deposit/reservation from us.

there will always be another apartment (there are lots already on the market & new ones being added all the time) if we can't get one of these, it's just that this new development is in a great location & would really suit how we want to live.

AbbieCadabra

i've contacted an estate agent who's selling another new build that's just been released for off-plan, completion early next year. they've just confirmed that they wouldn't accept any reservation/deposit from us until we've sold our current home.

i can't see the developer on the one we're interested in being any different, so that's that plan gone!

ethank

You need to have sold your property or be Sold STC before they will let you make a reservation. You are a dependant buyer. You need equity from your current property to buy another.