Buying a new-build property is a popular choice for many homebuyers. You can benefit from the ability to choose fixtures and fittings if you agree to purchase at an early enough stage in the build. In addition, new homes are highly energy efficient. You may also benefit from a chain-free purchase which can make the home moving process easier. There can be competition between buyers for properties on popular developments, so it is important that you do your best to stand out to developers as a strong buyer.
The conveyancing process for a new build property is exactly the same as buying an established property but there are some additional considerations which you should bear in mind.
Reservation fees
Most homebuilders will require buyers to pay a reservation fee and enter into a reservation agreement in order to reserve their plot for them. This fee can range anywhere from £500 to £2,000. The fee will be deducted from the balance due when the sale completes, but it is non-refundable if you don’t complete the purchase in the timescale required by the developer.
It is usual for the developer to set a strict timescale in the reservation agreement for the exchange of contracts, the legal step which commits the buyer and seller to the transfer of the property. Reservation fees are very unusual outside of new build transactions.
Be mortgage ready
It is especially important when buying a new-build property to have a mortgage agreed in principle. Mortgage applications can take some time, and you may not be able to borrow as much money as you wish. It is vital that you take mortgage advice before you agree to buy a property but especially so in the case of new builds.
Failure to have a Mortgage in Principle (also known as a Decision in Principle [DIP], Agreement in Principle [AIP], or a mortgage promise) before you agree to buy can put your ability to go ahead with a purchase in danger, meaning that you could forfeit the reservation fee you have paid. Secondly, many builders set out a tight timetable for the exchange of contracts and completion of the purchase which it can be difficult to meet if a mortgage is not already agreed in principle.
OneDome offers Mortgage Passport, an online tool which helps you get a Mortgage in Principle. You can use your Mortgage Passport to show a homebuilder that you will have funds in place to be able to go ahead with the purchase. Our mortgage advisors are able to give personalised advice to help you find the right mortgage. For more information on how OneDome can help you with getting a mortgage, get in touch with our advisors on 020 3868 6262 today.
Choose a conveyancer
You should choose a conveyancer who is experienced in dealing with new-build properties. New-build developments can be complex legally and you need a trusted conveyancer to help you find your way through any pitfalls and insert any required wording in the contract to keep your money safe.
Buying a new-build property often involves legal agreements for the estate roads, water supply, and drainage, all of which need to be properly reviewed. OneDome can help you to find a conveyancer with the required experience on an online platform, available 24/7, which makes it easy to track the progress of your transaction and message your conveyancer at any time.
Buyers who choose OneDome can be confident that by moving everything online and in one place, home movers and estate agents can track the progress of the transaction in real time. The conveyancing process is accelerated, meaning that home movers can often move into their new-build property faster than with traditional conveyancing methods. Another key benefit to conveyancing with OneDome is getting our complimentary completion insurance. This form of buyers protection insurance (provided by Surewise) helps cover your costs by up to £2,250 in the event of a property transaction falling through.
Can OneDome help with buying a new-build property?
Interested in some of the latest new-build properties in locations across the UK? Take a look at our selection of available new-build properties. If there’s anything there that takes your fancy, give our new-build team a call on 020 3966 7857 and they’ll help with any questions you may have about buying a new-build property.
Your home may be repossessed if you do not keep up repayments on your mortgage.