Selling House & Buying New Build - Deposit Tired in Sale

briggers19861986

Hi everyone!

I'm really struggling to get the answer i need....and had no clarification from my solicitor or developer. I will give you a run down of our plans to sell and purchase:

Currently living in shared ownership property with Flagship
Found a buyer for the property who is currently living in rented accommodation
We have found a new build property with a developer who offer 30 day reserve at £500
The new build will not be ready until Sept/Oct/Nov and we have no where to live other than in the property we are selling

The issue i have is the amount we have made in the property we are selling (£29,000) is what we would use to cover the legal fees and the deposit on the new build. However, I'm struggling to know how we can sell to receive money to use for initial fees and the deposit and still live in our current property until the new property is built?

I'm not quite sure how the 'exchange' and 'completion' process works?

Also how will this work with the developer with reserving for the period given and when they would like the 5% deposit (£11,500) paid in these 30days?

Ive explained this to my solicitor who states its the same as a chain and would work the same. But i think it may differ due to buying from a developer....he gives 30days to reserve and the deposit has to be put down in this time frame with the intent to have the house built in Sept./Oct/Nov.

I feel like i'm losing my mind haha. All i need to know is what the likely process would be and whether this is feasible before i start paying out to reserve the plot, the first lot of fees to solicitor ect.

Please, if anyone can shred some light on this i would be so very grateful!!!!

kingstreet

Your buyer's cash deposit passes up the chain so it's a smaller percentage of your purchase price, but this is acceptable once solicitors have agreed it with their clients.

Your solicitor is right. It works like any other chain.

briggers19861986

Than you for your response

The buyers deposit is £3,600. how would this work if ours is £11,500 and this is what the developer has requested?

Also should I be reserving the plot now or try to wait? Do we have to exchange and complete within a certain time?

Sorry, i'm still confused haha

kingstreet

Solicitors will agree the difference when you are in a chain. We are newbuild specialists doing hundreds of cases a year and have never once had a client say they had to find extra money.

You will usually be required to exchange contracts within 28 days of making your reservation. Completion will be 'on notice' when the build ends. They will tell you you have two weeks to complete once they've finished building.

Sorry, you need to reserve when you need to reserve. Not one I can answer. Until you do so, it can be sold to someone else like any other property without an agreed offer on it.

Lioness_Twinkletoes

briggers19861986 wrote: »

However, I'm struggling to know how we can sell to receive money to use for initial fees and the deposit and still live in our current property until the new property is built?

I'm probably misreading this, but it looks like you want to sell to release the equity but stay in the property until your new build is completed (and they are often subject to delay so it could be 2018). Where are your buyers - who would own the property on completion - live?

briggers19861986

Thank you for your reply

Yes we would hope to sell to release the equity to use for the deposit on the new build. The buyers are aware of the situation with the new build property and when it is likely to be finished. I wasn't sure what it would mean in regards to who owns what and when?

kingstreet

Unless you sell and move out you are not going to get any money until completion.

Assuming you intend to live in your current property until newbuild completion, what I've said is what will happen.

briggers19861986

ok makes sense. So we will need to put down the deposit by other means as equity will not be available until completion?

Many thanks

kingstreet

No. Your builder will accept that your buyer's cash deposit passes up the chain so it's a smaller percentage of your purchase price.

Don't get fixated on this £11,500. All they care about is your commitment. As long as they have that, they will fit the property out to your spec.

alex_163163

Try negotiate with your buyers on not completing until you new house is ready.

Until recently I was also in the process of buying a new build, with 5 months left until anticipated finish. And I had no where else to go whilst it was being built, apart from remaining in the flat I was selling.
I made it clear to all who viewed my flat that we were buying a new build, and would not be completing on the sale and moving out until we completed on the new house. The buyers I found were happy with this as it meant more time for them to save up for furniture.

briggers19861986

Thank you everyone for all your advice and informative replies, much appreciated

I feel very happy with going ahead with the selling and purchase now after reading your advice.