Buying a new build from a farmer

typeractive

Hi all,

A farmer has decided to develop a small portion of his land for a handful of houses. I've been to have a look at the site and luckily bumped into him and another person who is buying a house from him (they seemed a happy customer and rated him as a bloke).

Currently there are 2 of the properties in development stages, the others aren't up yet - which is one of the appealing factors as the buyer I bumped into has modified the plans to suit them, something that appeals to me greatly. I've been looking for somewhere to buy and then tailor to needs, though this could be a great opportunity - basically a self build with someone doing the work in a way, essentially getting it right first time.

However there's a lot on my mind:

• Getting the mortgage for something that isn't up yet.
• What if he goes bust / can't afford to finish the build - where do we stand there? What do I need in place to safeguard me? Despite big companies going bust, it feels more risky with an independent person.
• I know the others' have bought their house for the advertised price with the added modifications and 'pick any finishes they wanted', though he was keen to put the price up when I mentioned I wanted the same - tips on negotiating this without being rude.
• Having a building guarantee on completion.

These are just the things I've initially thought of but I'm sure there will be more. Any of you that have been in this position can you share your wisdom?

:beer:

G_M

http://www.ebuild.co.uk/

https://forum.buildhub.org.uk/

http://www.the-self-build-guide.co.uk/self-build-forums.html

https://forum.buildhub.org.uk/forum/48-general-self-build-diy-discussion/

https://www.self-build.co.uk/

https://www.homebuilding.co.uk/advice/

davidmcn

typeractive wrote: »

[*]Getting the mortgage for something that isn't up yet.

Perfectly normal for a newbuild, not a problem.

[*]What if he goes bust / can't afford to finish the build - where do we stand there? What do I need in place to safeguard me? Despite big companies going bust, it feels more risky with an independent person.

Put in a longstop date so you are entitled to walk away if it hasn't been completed by a certain date. Don't give him money in advance of completion.

[*]Having a building guarantee on completion.

Is he offering one? One-off builds don't always provide them (varied opinions on how useful they are anyway), but mortgage lender will at least want an architect to have signed it off.

typeractive

Wow G_M - now it's a case of where do I start!!!!

davidmcn wrote: »

Perfectly normal for a newbuild, not a problem.


Put in a longstop date so you are entitled to walk away if it hasn't been completed by a certain date. Don't give him money in advance of completion.

Is he offering one? One-off builds don't always provide them (varied opinions on how useful they are anyway), but mortgage lender will at least want an architect to have signed it off.

Thanks David!

He mentioned a 10% deposit...so maybe this is a bad thing (I wouldn't part with any money without having some kind of contract between us as that's a lot of money to lose). I have a copy of some architect drawings, though these are for a different plot to the one I want and I'd want modifications - something I need to speak about. The work that I seen did look very good - I have to say. I think the other buyer has not paid any money yet, though needs to on settling the kitchen - perhaps because it's bespoke.

I'd hope the mortgage lender would show him I'm good for the money based on the agreement in principal etc (or maybe it is a bit of a different system for a new build). Would the mortgage company release funds based on the architect sign off / building inspector and these would go to the developer or me?

If it is advisable to not give a deposit of any kind then it might be the case that I need to sit it out until a house is built (no guarantee to my spec) as he might not want to do that as I could be a risk to him. It's finding that safe balance of: yes I can pay, but only when it is safe.

No mention of any guarantees, but I hadn't got that far - it was more of a look around.

davidmcn

I'd advise against giving him a deposit, as you won't see that money again if he goes bust. You can let the solicitors sit on a deposit if you must. Admittedly you might need to take a view on the costs for bespoke kitchen etc. Some developers think they can use gullible buyers as a source of funding for their build.

The mortgage funds go to your solicitor and are paid to his solicitor at completion. They may need their surveyor to reinspect first (don't think that's the norm for NHBC-registered builders)

ProDave

If the houses are not yet built, I would have a serious discussion about buying a bare plot.

Then you can choose the house design, choose the construction method, choose the builder, choose the finishes, and get the house you really want.

typeractive

Well the plot is there, and the foundations are down. I!!!8217;m unsure if the foundations dictate the layout of the house (basically you can see the shape of the rooms in concrete).

I!!!8217;d like to get it built myself and do all that, but I honestly just think !!!8216;where would I start?!!!8217; And having the time to make all those decisions. Let alone the finances which could spiral out of control. Potentially a negative mindset here!