A guide to buying a new build home
Buying a new home can be an immensely exciting prospect but there are quite a number of details that need to be addressed and considered before reserving your dream new build. Here we’ve put together our top tips to help you get the buying process started and to put you in a far stronger position as a buyer, both with developers and estate agents.
Understand your credit score
To ensure you are offered the best possible range of mortgages and interest rates, you will need to have a good credit rating. Checking your credit rating with a site such as Experian will give you the information you need, which may be required by a mortgage adviser at the next stage.
Get your paperwork in order
To present yourself to developers and the estate agent as a serious buyer, you will need to provide a mortgage broker with various documents, from your passport and P60, to payslips and a backlog of bank statements in order to prove your identity and borrowing capacity. It is a good idea to find out in advance what you will need to supply and get this ready before an appointment with a financial adviser, as it will help to speed up the process.
Mortgage in Principle
A Mortgage in Principle is a document or certificate from a lender that states, based on basic financial information provided, that they would be prepared to lend you a certain amount of money, in principle. You will then know your borrowing capacity and can start looking at properties in your price range.
New Homes Developers and estate agents will often recommend a financial adviser that they regularly work with on new build schemes. These advisers will have their finger on the pulse with the latest new-build mortgage products available and specialise in finding the best deal as well as understanding incentives and schemes such as Help to Buy.
Listen to your New Homes agent
Your new homes estate agent is an expert in new build developments and the local property market. If you have explained your needs and requirements to your agent, then they will try and find solutions for you.
Try and be open minded and you never know what you’ll find – your dream home might be waiting for you in a slightly different guise to your initial vision.
Once your offer has been accepted you may be asked for a reservation fee to secure the property, this is then deducted from the final purchase price. Most developers and estate agents subscribe to the Consumer Code for Homebuilders which will be explained in full during the reservation process.
The reservation fee indicates to the developer your intention to buy and will take the property off the market.
Instruct a Solicitor
Do a little bit of homework in advance with regards to conveyancing solicitors. The developer may also be able to recommend a conveyancer who has previous experience with legal contracts for the development. A fixed price is usually offered for their services so that you don’t have any unexpected costs throughout the conveyancing process. Of course, you are under no obligation to use the recommended solicitor, but it is worth considering all options.
When an offer is accepted on a property by the developer you will need to be in a position to advise them of your solicitor’s details as soon as possible.
Your mortgage lender will want confirmation the home is worth what you’re paying for it. They’ll organise the valuation for you – this will usually involve a fee. The survey checks the condition of your new home or if buying off-plan, the lender will arrange a surveyor’s valuation based on the plans and development specification.
Exchange of Contracts
Developers will sometimes stipulate a period to exchange contracts, this is usually within 28 days of reservation. An offer on a property is not legally binding until contracts are exchanged. The exchange can only happen when the mortgage company has completed their survey and the solicitors have everything they require for each party including searches, title documents and lease details in order to draw up the contracts. Once contracts are signed they are then exchanged by solicitors, and it is at this stage that a purchase becomes legally binding.
This entails the developer identifying and making good minor issues, such as touching up paintwork and adjusting appliances, prior to the buyer moving in. Some developers will then invite you to your New Home Tour, where they take you round your new home and show you how everything works.
Completion is the legal transfer of ownership of a property from one person to another where all monies and documents have been distributed. This is also when the developer’s solicitor will instruct the estate agent to release the keys.
Bright, clean, shiny and new. All mod cons, no chains, part-exchange, 10-year warranty, energy efficiency, personalisation and maybe some enticing incentives to ease the move. These are just some of the excellent reasons you may prefer to buy a brand new home and we’ve lots for you to choose from.