Do we need to sell our house before we can reserve a new build Home?

taconite2

So according to the builders website - 

Do we need to sell our house before we can reserve a Bellway Home?

If you are reliant on the sale of your home to finance your new Bellway home, you must have sold your property before you reserve a new Bellway home. This is to ensure that contracts can be exchanged 28 days after reservation. (England only) If you have not sold your house and wish to buy a Bellway home, we offer a Part Exchange Scheme and Express Mover Scheme both of which are available to help make your move as hassle free as possible.

Baring in mind the house isn't built! Estimated 12 months - could be more - building materials storages, delays, weather etc! 

They aren't offering part exchange due to Covid

It's racking my brain how this works - is it just a case they can do this because someone somewhere will agree to these terms?

Some pointers -

1) House is £400k highly unlikely it would be a first time buyer therefore most buyers will have a chain

2) We go into renting for 12 months+ so we can avoid the chain issues and can reserve - but then there's always the chance of missing something and you're stuck then

3) Second mortgage? I could afford this temporally but there's stamp duty on second homes etc I've heard this is quite expensive compared to first homes

4) A nice buyer who's willing to wait (they claim it happens) - but what happens after 6 months they get fed up and it falls through?

Anyone got experience of all this?

user1977

Yes, lots of people - see umpteen previous threads. Selling first and finding somewhere else to live in the interim is the obvious solution.

Or you could just buy a house which already exists!

eddddy

taconite2 said:

4) A nice buyer who's willing to wait (they claim it happens) - but what happens after 6 months they get fed up and it falls through?

If you offer a good deal, you might find a buyer.  i.e. The deal would be "We'll sell you the house a little bit cheaply, if you're prepared to wait 12 months+ before you complete."

I guess it's possible that you might find, say, an FTB who wants to secure their place on the property ladder at today's prices, but is happy to wait a year before moving in and taking on heavy mortgage payments.

The deal would be that they exchange contracts at the same time as you - so they can't walk away after 6 months.



But it's still a big risk for your buyer - their mortgage offer would probably last 6 months,  so they'd have to exchange contracts 'hoping' that they can get a new mortgage offer nearer completion.

But then you'd be taking a similar risk - as your mortgage offer would usually last 6, but some lenders allow 12 months for a new build. (Although you might get a 12 month offer, combined with a 12 month long-stop date.)



Edit to add...

Have a chat with a few local estate agents to see what they say about the likelihood of finding a buyer like that. 

andyf1980

Is there a specific reason that you are keen to buy the new build?

We are just in the process of selling ours after five years. We have been happy here but had lots of snagging issues which took time and effort to get resolved. We were also delayed by more than six months and had to reapply for a mortgage from scratch. 

I’d probably consider buying new again but only if it was the perfect design/plot. 

taconite2

user1977 said:

Yes, lots of people - see umpteen previous threads. Selling first and finding somewhere else to live in the interim is the obvious solution.

Or you could just buy a house which already exists!

user1977 said:

Yes, lots of people - see umpteen previous threads. Selling first and finding somewhere else to live in the interim is the obvious solution.

Or you could just buy a house which already exists!

user1977 said:

Yes, lots of people - see umpteen previous threads. Selling first and finding somewhere else to live in the interim is the obvious solution.

Or you could just buy a house which already exists!

Might be the obvious one! But most risky on my part! Was hoping to see if there's something esle

taconite2

andyf1980 said:

Is there a specific reason that you are keen to buy the new build?

We are just in the process of selling ours after five years. We have been happy here but had lots of snagging issues which took time and effort to get resolved. We were also delayed by more than six months and had to reapply for a mortgage from scratch. 

I’d probably consider buying new again but only if it was the perfect design/plot. 

No specific reasons, there's 18 properties in the area I'm looking, last year I'm told there was 200+ def a lack of houses! Everyone is outbidding each other on the ones that do come up within hours and they are all going for stupid prices. Others have been on the market for ages due to the amount of work needed on them. There's def a raising trend for fake grass I've noticed!

Our situation is much more simple - it's too small! Recently married, want to start a family etc. The house needs no work doing.

I've had a new build before had no real problems - had the usual snagging list but it was all dealt with over time

taconite2

eddddy said:

taconite2 said:

4) A nice buyer who's willing to wait (they claim it happens) - but what happens after 6 months they get fed up and it falls through?

If you offer a good deal, you might find a buyer.  i.e. The deal would be "We'll sell you the house a little bit cheaply, if you're prepared to wait 12 months+ before you complete."

I guess it's possible that you might find, say, an FTB who wants to secure their place on the property ladder at today's prices, but is happy to wait a year before moving in and taking on heavy mortgage payments.

The deal would be that they exchange contracts at the same time as you - so they can't walk away after 6 months.



But it's still a big risk for your buyer - their mortgage offer would probably last 6 months,  so they'd have to exchange contracts 'hoping' that they can get a new mortgage offer nearer completion.

But then you'd be taking a similar risk - as your mortgage offer would usually last 6, but some lenders allow 12 months for a new build. (Although you might get a 12 month offer, combined with a 12 month long-stop date.)



Edit to add...

Have a chat with a few local estate agents to see what they say about the likelihood of finding a buyer like that. 

This is the part I don't get though, this buyer could still pull out the day before the completion of my new build.....regardless of how long they've had the offer in for

I remember years ago you could offer 10% deposits to secure it all

andyf1980

Makes sense. 

We have bought a wreck this time so one extreme to another!

eddddy

taconite2 said:

eddddy said:

taconite2 said:

4) A nice buyer who's willing to wait (they claim it happens) - but what happens after 6 months they get fed up and it falls through?

If you offer a good deal, you might find a buyer.  i.e. The deal would be "We'll sell you the house a little bit cheaply, if you're prepared to wait 12 months+ before you complete."

I guess it's possible that you might find, say, an FTB who wants to secure their place on the property ladder at today's prices, but is happy to wait a year before moving in and taking on heavy mortgage payments.

The deal would be that they exchange contracts at the same time as you - so they can't walk away after 6 months.



But it's still a big risk for your buyer - their mortgage offer would probably last 6 months,  so they'd have to exchange contracts 'hoping' that they can get a new mortgage offer nearer completion.

But then you'd be taking a similar risk - as your mortgage offer would usually last 6, but some lenders allow 12 months for a new build. (Although you might get a 12 month offer, combined with a 12 month long-stop date.)



Edit to add...

Have a chat with a few local estate agents to see what they say about the likelihood of finding a buyer like that. 

This is the part I don't get though, this buyer could still pull out the day before the completion of my new build.....regardless of how long they've had the offer in for

I remember years ago you could offer 10% deposits to secure it all

The buyer will have exchanged contracts with you (after 28 days) - so they will be legally committed to buy your house, so they can't pull out (without being in breach of contract and suffering large financial losses).

Just like you'll have exchanged contracts for your new build house - so you can't pull out either (unless you have a long-stop date).

Flick85

I’m doing this exact thing atm with Bellway, I reserved a plot yday. At least in my area, the houses are selling quickly so they need you to be proceedable before they will let you reserve because someone else will be in that position so why shouldn’t they sell to them? The advantage of new build is that you can’t get into an offers war - the base price is the base price. The disadvantage is that for a popular development, there’s not a lot you can do to make yourself the preferred buyer. So, you have to do what they ask.

I managed to sell my apartment to an investor, who I am hoping will agree to exchange quickly and complete on notice with a long gap in between. Worst case scenario, he doesn’t agree to that and either I agree to complete earlier and go into rented. Or, I go back on the market and find someone to buy who will wait. If I do the latter, I expect my sale price to be lower, but we’ll see what happens. However, I know that my flat will sell quickly if I have to put it back on the market because this time it went in less than 24 hours, above asking price, after a bidding war between 2 investors. I also have some financial flexibility, as I can afford to accept lower for the flat. 

But basically, with the way things are at the moment, most developers aren’t offering part exchange because they don’t need to. If you’re not selling to a first time buyer or investor, I expect you’ll need to break the chain, as a whole bunch of people exchanging quickly and then waiting to complete on notice is going to be hard to manage. Also, you can’t reserve until the chain is complete, and they check the chain details before you are allowed to make the reservation apppintment.

During my reservation appointment, 3 people claiming to be proceedable phoned up to ask about the property I was reserving. And, another actually came to the office itself. So, while you may think they’re just being difficult and claiming they have no issues selling, at least where I’m buying, it does seem to be fairly true.

Also in my case, I knew the house I wanted was going to become available “at some point this week”, and that there were other proceedable interested parties. The reason I managed to secure it, rather than others, was that I did absolutely everything they asked me to - even something that seemed a little redundant. They asked me to phone them everyday they were open at 10.00 for an update, and for 4 days they said “sorry, not available yet, keep an eye on the website as might go up today, but try calling tomorrow”. I did exactly that. And, when I called on friday they said “it’s not available yet, but will be in the next few hours, and as you have done everything we asked you to, we will phone you back as soon as it’s available”. So, I got first refusal basically as I had made my reservation appointment before the house was on the website. If I hadn’t phoned everyday, and done their financial checks and had a solicitor lined up, I would not have been in that position. It’s a bit silly, but they do have the power atm. So, you need to go through their hoops. 

Good luck!

Thrugelmir

taconite2 said:

andyf1980 said:

Is there a specific reason that you are keen to buy the new build?

We are just in the process of selling ours after five years. We have been happy here but had lots of snagging issues which took time and effort to get resolved. We were also delayed by more than six months and had to reapply for a mortgage from scratch. 

I’d probably consider buying new again but only if it was the perfect design/plot. 

Our situation is much more simple - it's too small! Recently married, want to start a family etc. The house needs no work doing.

There's no rush. A baby requires minimal space.