Reservation Agreements

Kdclee

We have been asked by our lender to provide a reservation agreement. The one we have been provided with states no conditions. Literally just the amount, our names, purchase price, reservation agreement deposit, solicitor details and broker details.
No mention about what happens to the deposit, no details about covering of associated fees if someone pulls out. Does this sound standard or should we be requesting some clauses? Or is this something we shouldn't really be to worried about and we should just get on with it?

The developers have also agreed to pay for some of our legal fees as an incentive, should that be mentioned in the reservation agreement?

diggingdude

i'm wondering what difference that makes to the lender, they won't be supplying money to cover that part of the purchase

Kdclee

I think it might actually be for the Help To Buy part, not for the lender.
We passed out onto our broker and they advised it should say least have Target Exchange and Completion dates.

katkatmachine

Yeah, you won’t be able to get the Authority To Exchange from Help To Buy if the reservation form is missing details especially exchange and completion details. Your developer needs to give you a complete form. 

bucksbloke

If you are buying a new build, you will normally give a copy of the reservation form to your mortgage broker and your solicitor (it really is just a form rather than an agreement) and your solicitor will normally complete the CML incentives form which will go to the Lender. 

Sammyd159

Is this a small developer? In my experience they have no clue what they are doing.  
A reservation form should have res date, exchange date, res fee, amount of deposit required. terms of the reservation ie 28 day exchange, how much of the res fee can be retained by the developer. Both parties full details, purchase price and incentives.  Then they should fill in a CML and this goes to the lender. It has the same info on and more about the number of units, leasehold etc etc.