Reserving a Property

Legacy_user

1. At what stage do developers (new build) allow you to reserve a property? What do they need?

2. Does it cost money generally to reserve a property?

3. Will they hold it for you even if there are delays in getting certain documents to prove income etc?


Cheers.

Jess716

Just needed our names, addresses, Id, proof of address

It cost £1000 to reserve on our development

They hold it for 30 days, it took us that just to get the offer but as we have the offer they are holding now as it is effectively sold to us

libf

If you're selling a property then you generally need to be under offer, and they expect exchange within 28 days, although how strictly that is enforced by depend on build stage and popularity of the development.

If you're using HelpToBuy then the max reservation fee is £500, and even if it's more then this is refundable less 'administration costs'.

I needed to have been through my finances in enough detail with their broker for them to be happy that I would qualify for HelpToBuy and get a mortgage.

System

libf wrote: »

If you're using HelpToBuy then the max reservation fee is £500, and even if it's more then this is refundable less 'administration costs'.

I needed to have been through my finances in enough detail with their broker for them to be happy that I would qualify for HelpToBuy and get a mortgage.

How long will they hold it for under the £500 reservation fee for Help To Buy scheme?


I am in the early stages of trying to purchase a property - I am awaiting the all clear from Help To Buy and will be speaking to a Mortgage advisor later who will hopefully 'qualify me'....

Then I will be able to reserve the property....

If I do that I am 100% dedicated to buying the property.

But I am thinking that I may need to request documentation such as Bank statements, SA302 form, P60 + Payslips and I'm concerned that the Developers/lender won't wait for me.

Not sure how long it takes for these to come through, but hopefully in my case - not too long.

libf

Depends on the builder and the build stage of the property.

I reserved at the end of May, but as the house won't be ready until January 2016, and only one lender will issue a mortgage with that long a timescale, I didn't even apply for my mortgage until the end of July. That came through in August but thanks to solicitor delays I only just exchanged last week, after a few letters from the developer setting deadlines for exchange that weren't possible due to missing information.

Request those things now and then you'll have them to hand when needed.

Humphrey2012

For us, we could reserve a plot once we were under offer. They say 28 days to exchange, but in reality they will give you some extra time if needed, as long as they can see things are under way like a full mortgage application and survey for instance.

They said that they enforce the 28 days a little stronger if they know the buyer is a cash buyer or first time buyer as 28 days should be plenty of time to exchange in those circumstances. If you are selling a house they are more flexible.

This is a Taylor Wimpey development and it's very popular but they still have flexibility.

kingstreet

dburford9 wrote: »

How long will they hold it for under the £500 reservation fee for Help To Buy scheme?

I am in the early stages of trying to purchase a property - I am awaiting the all clear from Help To Buy and will be speaking to a Mortgage advisor later who will hopefully 'qualify me'....

Then I will be able to reserve the property....

If I do that I am 100% dedicated to buying the property.

But I am thinking that I may need to request documentation such as Bank statements, SA302 form, P60 + Payslips and I'm concerned that the Developers/lender won't wait for me.

Not sure how long it takes for these to come through, but hopefully in my case - not too long.

FWIW you can't get the "all clear" from HTB until you submit a property Information Form and Reservation Form for which you need to make a reservation first.

Your broker needs to do the HTB Affordability calculator first, then obtain an agreement in principle from a mortgage lender.

Then, you should be able to reserve and the HTB paperwork can be submitted. It's a four working day turnaround for the issue of the Authority To Proceed.

Developers don't want/need evidence of income. That is required by your broker or mortgage lender when you submit a mortgage application.

Ask your professional advisor to explain the steps to you as you don't seem very well informed about the process.

This is the way we do Equity Loan cases in England;-

Check HCA Affordability Calculator
Obtain agreement in principle
Preliminary reservation done with builder and solicitor selected
Property information form and reservation submitted
HTB - EL Authority To Proceed issued (ATP)

All the above is done in the first week.

Formal reservation completed and fee paid
Full mortgage application submitted
Lender valuation done and supporting docs submitted
Mortgage Offer issued
Solicitor submits docs for Authority to Exchange (ATE)
Contracts exchanged with completion "on notice" when build over

All of the above is done within 28 days of ATP issue.

Property finished and kitted out to buyer's spec
Demonstration visit and snagging inspection
Notice given
Solicitor submits forms for Equity Loan release
Completion takes place, keys and money change hands and mortgage payments commence.

All of the above several months later and can be upto nine months from ATP, upto six months from ATE.

fairyloveheart

We paid £500 to reserve property - they requested an exchange in 4 weeks, but said they understood with HTB it could be more like 6 weeks....well we are 6 weeks on and still haven't exchanged..... I haven't contacted them as decided probably best to wait till they contact me. They have regular updates from our broker - whom they wanted us to use - on the progress.
A lot of new build developers prefer you to go through their preferred broker, in fact before they would let us reserve we had to speak to the broker over the phone to get the all clear to progress, even if we then didn't want to use their services. The developer suggested strongly that they preferred us to use them so they could 'be in control!', but then if it means they are not calling me all the time for an update, that's a good thing. Our purchaser and we are still waiting for mortgage offers.

I think they will reserve the property for as long as it takes, providing it is isn't ridiculous - they deal with this every day and understand that chains don't always run smoothly and to a timescale. It is totally out of the buyer's control if the building society is slow, providing you have submitted everything in a very tmely manner and done all that is required of you. We have made sure we submitted everything the day of request, instructed our solicitor from day one (I know some people wait but we wanted to show commitment whilst our mortgage app was in).
Ours benefitted from an early exchange carpet contribution but I don't think we will get that now, although I haven't discussed it with them

airyfairy76

I reserved a new build end of February, under the Help to Buy scheme and as a first time buyer. They made me speak to one of their brokers to assess affordability at the time of reservation, but I went on to use my own broker.

My mortgage was secured in April, but due to the delays in getting documentation from their solicitors, I didn't exchange until five months after reservation, in July! Sales office did get a bit shirty around thei half year in June, but as it was them that had caused all the delays, there was nothing really they could do.

System

Is the reservation fee paid back to you if you follow through with the purchase?

airyfairy76

Yes. Mine gets knocked off my final solicitors / stamp duty / extras bill