When you purchase a new-build property directly from a developer, there are a lot of additional pressures on you as a buyer in comparison to an ordinary purchaser of an existing property. The main one being that the developer will usually put an exchange deadline on the transaction, usually 28 or 35 days, beyond which they reserve the right to withdraw from the transaction and put the property back on the market.
There are a number of tips we can offer that can assist a buyer of a new build property:
- Stay in regular communication with the site office in order that you remain updated on the construction of your property and the proposed completion dates being offered by the developer. The developers do tend to get nervous if their buyers go quiet or ‘off the radar.’ If you have bad news perhaps relating to a related transaction you have, it is important to let the developer know as soon as possible.
- If you have a property to sell, it is always worth asking the developer if they would be happy to buy your property in part-exchange for the new property. If they agree to it, however, they are likely to offer you a lower price than one you would get on the open market. There is an advantage of a part-exchange, in that there is no chain, and no other parties/properties or solicitors involved, just you and the developer.
- Although there is a lot of paperwork being provided, it is important at the outset to read everything that the sales advisers are giving you, as you will be asked to sign to confirm your agreement to the contents of the reservation. This would also include any extras that you are looking to purchase and other options/discounts being offered by the developer.
- It is advisable to have made progress with regard to any mortgage that you are looking to take out for the purchase as early as possible. As the time scales are tight with these kind of transactions, it is always a good thing to have commenced the procedures regarding a mortgage, even more especially if you are intending to use the government Help to Buy scheme. There is extra paperwork and time involved in this, so the earlier it can be put under way the better. The sales office will be able to offer a preferred financial advisor if this is something you would like to take them up on.
- If you are putting any monies towards the purchase of the property that require time to be liquidated or available for use as a deposit, it is key to have such funds available in good time and so a start should be made on this.
- As with the developer information above, it is important again to read all the property information sent to you by your conveyancing solicitor and discuss with them anything that you do not understand or need further explanation on. Any issues that you have with the documentation need to be ironed out prior to exchange of contracts. Prompt attention to the documentation and the return of signed papers is key.
- Whilst the developer will offer you their recommended conveyancers for the transaction, you do not have to instruct them. It is absolutely your right to choose the conveyancer that you want to. All solicitors will be able to meet the deadlines from the developers in order to ensure that you are able to purchase your property.
Alison Fielden, Andrew Merritt and Phil Stephens have many years of experience in acting for purchasers of new build properties from developers. For a professional legal service please contact us at Alison Fielden & Co on 01285 653261.