What is the process of buying a new build home? Here is how it differs from regular conveyancing
Buying a new build home is incredibly exciting, but it does come with a unique set of challenges.
The process can be complex and daunting, especially when you are required to pay an upfront reservation fee and agree on a purchase price on a home that may not yet have been built by the house builder.
As a buyer in this environment, pressure can mount, especially when the developer is pushing you to meet very short exchange deadlines coupled with the threat of the loss of your reservation fees.
There are also multiple and unique steps relevant to these transactions, such as building regulations approvals, planning permission and planning regulations, as well as NHBC certificates.
The process of buying a new build home can lead to many questions arising, and the conveyancing team at Eric Robinson are experts at coordinating new build purchases, especially those that are dependent upon the sale of an existing property.
We have put together this article to give you a run-through of the process of buying a new-build and how it differs from regular conveyancing. We also cover how you can avoid any further complications and issues from arising.
Why is conveyancing more complex for a new build?
The process of buying a new build home is more complicated than other types of conveyancing because there are more risks of things going wrong when it comes to a new build. Some of these issues could include:
- Homes not being built to a satisfactory standard or in accordance with the original plans
- Non-compliance with the planning regulations
- Developers failing to complete arrangements for the surrounding areas, e.g. roads and sewers
- Negligent NHBC inspections
Our mindful and experienced conveyancing solicitors at Eric Robinson can help you handle these issues that can arise when purchasing a new build property.
We can help you identify the issues mentioned above and also ensure the contract has your best interests at heart. When working with Eric Robinson Solicitors, we aim to reach your desired outcome.
We will seek to ensure that your deposit is protected and that there is a ‘long-stop’ completion date. If the developer fails to have the property finished by this completion date, then you have the right to cancel the contract and have your deposit returned to you.
It is also common for the developers’ sales team and their solicitor to rush the completion date so that it reflects better on them, showing that they have hit their targets. Our quality solicitors will not give in to this pressure and they will seek to ensure that the transaction is ready for completion before agreeing to any completion date.
What is the process of buying a new build property?
The overall process of buying a new build property goes as follows:
- Appoint a conveyancing solicitor
- Getting your mortgage
- Paying your deposit
- Exchanging contracts
Appointing your conveyancing solicitor
By appointing one of our experienced conveyancing solicitors, you will receive the relevant help with the inevitable legal side of buying a home. They do a lot of the paperwork and communication for you in order to ensure the process runs smoothly.
Getting your mortgage
This is the process of getting your finances together to put towards your mortgage.
If at any point you are feeling nervous about securing your mortgage for a new build or you feel like you may have some difficulty in paying the complete mortgage, there are a few schemes that can help you, especially if you are a first-time buyer.
Examples of these are the Help to Buy Equity Loan and the London Help to Buy scheme. They are both aimed exclusively at new builds. There are shared ownership schemes available for new builds, which can be a helpful first step if you cannot afford to buy a home outright.
Paying your deposit
Most commonly, your deposit will be 10% of the overall price of the home, but with new builds, this can be a bit more. A developer can request anywhere between a 10% and 30% deposit, with an agreement to pay the remainder upon completion. They will normally want proof from the lender that your mortgage is guaranteed.
Once you exchange contracts, this is when the whole process becomes official. You then pay your deposit which can then be lost if you back out of this agreement by this point.
You normally have 28 days between reserving your home and exchange, and this process can come around quite quickly, so you must ensure you do your due diligence beforehand.
There are usually new build warranties, like NHBC or Premier Guarantee. This helps you to protect your deposit after the exchange should anything go wrong with the building development. Your conveyancing specialist should help you go through this.
Is the legal process for buying a new build property different to buying a non-new build property?
The simple answer is the process is identical. When buying a new build property, your solicitor is required to thoroughly investigate the property to ensure that all legal aspects are in order.
The only difference is that because the property has not previously been owned by someone, the focus will be on ensuring that the site and/or development has been properly configured and set up. This will involve checking things such as rights of access and sewerage.
How can Eric Robinson Solicitors help me reserve my new build property?
A good conveyancing solicitor will seamlessly guide buyers through the new build conveyancing process, and they will ensure that the exchange of contracts occurs in accordance with the requirements of the house builders reservation agreement.
Our team of specialist new build conveyancing solicitors offer a bespoke service to parties purchasing new build properties so that they achieve the stringent demands set by developers.
There are many matters that will need to be resolved prior to your completion date. These can include considerations such as whether the estates’ roads are finished, whether the buildings will attract future management fees to maintain communal areas, or whether there is a risk that builds will be delayed by weather conditions.
Your mortgage lender could also raise issues over planning permissions or your build guarantee. Should the need arise, we will seek to vary your contract price, and we will look to amend any agreements that do not work in your favour.
Contact Eric Robinson Solicitors today for expert advice on 02380 218 000, or simply fill out our contact us form.