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Deposit on new build
chelseablue
Posts: 3,303 Forumite
We are thinking of buying a new build house.
Price around £550,000
We would need to pay the reservation fee of £5,000 which is fine.
Then 10% is required on exchange.
How does it work if you don't have £55,000 cash in the bank?
We would be selling our current home which has over £200k of equity but obviously we don't see that it just goes towards our new house on completion.
I'm guessing that not everyone 40 grand+ in the bank so how is it done?
Sorry if its obvious, I've never purchased a new build before
Price around £550,000
We would need to pay the reservation fee of £5,000 which is fine.
Then 10% is required on exchange.
How does it work if you don't have £55,000 cash in the bank?
We would be selling our current home which has over £200k of equity but obviously we don't see that it just goes towards our new house on completion.
I'm guessing that not everyone 40 grand+ in the bank so how is it done?
Sorry if its obvious, I've never purchased a new build before
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Comments
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The deposit will be passed up the chain.
How much will your buyers be putting down?0 -
Our house isn't up for sale yet but I would guess the standard 10%?
I *think* on a new build after you reserved your plot they go for exchange within 28 days.
But selling our house and getting to exchange would take longer than that I'm guessing? Last time we sold and purchased it took 3 months!0 -
You won't be able to reserve until you have a readily, willing and able purchaser for yours. Your sale and purchase will have to exchange at the same time, with completion on-notice.
Solicitors can usually agree on the deposit from the bottom of the chain being used by all, becoming a smaller percentage of this higher purchase prices as it passes up the chain.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »You won't be able to reserve until you have a readily, willing and able purchaser for yours. Your sale and purchase will have to exchange at the same time, with completion on-notice.
Solicitors can usually agree on the deposit from the bottom of the chain being used by all, becoming a smaller percentage of this higher purchase prices as it passes up the chain.
Thank you
The developer says that after the reservation fee is paid, they work towards exchanging in 28 days
What happens if we have a buyer for ours but exchange cant happen that quick?
Especially as I presume there will be a chain below us, we currently have a 3 bed semi valued at £430,000 so not a typical first time buyer place0 -
You see if the developer will negotiate or you drop the price of your house to the amount that it sells tomorrow.0
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So what's the issue? Getting from here to an agreed sale, or from an agreed sale to exchange of contracts in 28 days?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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The 28 days is wishful thinking on their part and they damn well know it. This was the first thing my MB told me when I called him. And it was true, later confirmed by the developer sales drone.chelseablue wrote: »Thank you
The developer says that after the reservation fee is paid, they work towards exchanging in 28 days
What happens if we have a buyer for ours but exchange cant happen that quick?
Especially as I presume there will be a chain below us, we currently have a 3 bed semi valued at £430,000 so not a typical first time buyer place
It took 2.5 months for me as a FTB and although they moaned several times, were happy to extend the "deadline" several times, as long as there was progress on the case and completion is still a month or two away.
The 5k reservation fee seems a bit steep, from my experience it's usually around £500, I hope it's going towards the deposit.0 -
kingstreet wrote: »So what's the issue? Getting from here to an agreed sale, or from an agreed sale to exchange of contracts in 28 days?
I'm forseeing the issue being getting from accepting an offer to exchange, when we last purchased our offer was accepted in the November and we exchanged in February.
It might be easier to sell our house and rent a place until the new place is built0 -
The 28 days is wishful thinking on their part and they damn well know it. This was the first thing my MB told me when I called him. And it was true, later confirmed by the developer sales drone.
It took 2.5 months for me as a FTB and although they moaned several times, were happy to extend the "deadline" several times, as long as there was progress on the case and completion is still a month or two away.
The 5k reservation fee seems a bit steep, from my experience it's usually around £500, I hope it's going towards the deposit.
The £5,000 goes towards the deposit0
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