The Process of Buying a New Build

Before Buying a Home

Before you even think about buying a new build property, there are lots of things to consider so you don’t get in too deep and realise you can’t make the commitment.

1. Budget

The first place to start is your budget. What do you want to spend on your new home and how much can you afford? Before you get to the stage of considering monthly payments, first you need to work out if the money you have got saved will cover all of your fees pre-buying. This may include stamp duty, legal fees, deposit, survey, home insurance, any furnishings and more.

Once you have assessed your current financial status, you can work out your monthly outgoings and what you can afford to spend on bills and mortgage payments. This will help you to establish what you can afford, prior to meeting with a mortgage advisor. It is recommended that all prospective buyers speak to an independent financial advisor to get financially qualified before reserving a home.

2. Mortgage in Principle

Before viewing any homes, it is good to have a mortgage in principle in place. This provides a fair assessment of your financial situation and shows sellers and estate agents that a bank is in a position to offer you a mortgage, based on the information you have provided them with. You can do this online or speak to a mortgage advisor who will be able to give you more in-depth information, specific to your situation.

By having a mortgage in principle before viewing any homes, you have a good idea of how much you can borrow and what your monthly payments are likely to be. It also means that you could make an offer as soon as you’ve viewed a home that is more likely to be taken seriously if the seller can see you will likely have the funds available.

 3. Viewing

Now the fun part begins! Viewing potential new homes is really exciting as you can begin to visualise where you might be living in a few months time. If you are buying a new build home, you will likely be shown around a show home which will give you a good feel for the home you are planning to buy. The house and plot you are interested in may not even be built yet so the show home is there as an example. However, it is important to remember that not all developments have show homes but you may be able to enjoy a virtual 360 tour or site walk through instead.

If you do fall in love with the show home and want to make an offer on an unbuilt home in the development, this is called buying off plan. There are lots of benefits to buying a home off-plan and some important things to consider too.

• Your home can be customised to suit your taste and style
• Check what is included in your new home – kitchen fittings, carpets and customisable appliances are not always included so make sure you check what is included in your new home so you know exactly what you’re buying
• Some mortgage lenders don’t like off-plan properties so make sure your mortgage lender is happy to offer you a mortgage for an off-build home
• Ask and agree on the schedule. At Castle Green, we work to a seasonal schedule. So, we will provide an estimation such as Spring or Summer 2022 upon reservation and an estimated date of completion once the property has been plastered. However, every developer works differently so be sure to understand the schedule you are working to.

4. Make an Offer & Pay The Reservation Fee

Once you have made an offer, agreed on a purchase price and understand exactly what is included in that price, you will pay a reservation fee for your home and the plot. This is usually somewhere between £500-£2000 and will reserve your home for anywhere between 28 days to 8 weeks. Within this time, you will be expected to appoint a solicitor, secure a mortgage offer, pay the deposit, exchange contract and the developer should give you a written reservation agreement.

Buying Your New Home

Once you have chosen your new build home and paid the reservation fee, it’s time to start all of the legal work.

5. Appoint a Conveyancing Solicitor

You will need to instruct a solicitor to carry out the conveyancing process. They will cover all of the legal points and ensure the contract is not working against you at all so that you are protected and the purchase can go ahead without any problems. 

Developers often have their own solicitor that they may try to encourage you to use but you are always free to choose your own solicitor.

6. Mortgage Offer

Even though you have a mortgage in principle, you need a guaranteed mortgage offer in order to buy your home. You can obtain a mortgage offer by going back to your mortgage advisor or, if you prefer to shop around, you can go through a mortgage broker to try and find the best deal for you.

The important thing to remember is the mortgage must be specific to buying an off-plan home if it has not been built yet. Once you have received an offer, your mortgage provider will complete a valuation survey based on the plans and specifications provided by the developer.

7. Pay the Deposit

Once you have accepted your mortgage offer and your solicitor has reviewed all of the contracts, plans and legal documents, it’s time to pay your deposit. This is usually 10% of the purchase price but it can be anywhere up to 30%. You will pay the deposit directly to your solicitor who will then transfer it to the developer’s solicitor on your behalf. 

Check if your developer is registered with a warranty provider like ​​NHBC Buildmark or Premier Guarantee as this will protect your deposit up to 10% of the purchase price. If they are, you will be covered if the developer goes bust or you have to withdraw from the buying process due to unreasonable delays such as still not completing 6 months after the long-stop date.

8. Exchange Contracts

From the moment you pay a reservation fee, you will have 28 days to exchange contracts. During this time, it is your solicitor’s job to check:

• The terms of the contract and draft transfer/lease
• The title deeds for the property
• Planning documents
• All other documentation

They should also ask questions and clarify any information with the developer’s solicitor if they need to and send you any paperwork you need to sign.

Completion

9. Complete

This is probably the most exciting day of the entire process. Once you are happy with the standard of your home build and have paid your solicitor’s fees, it’s time to complete on your home. This means that you can collect your keys, start moving in and make your new build house a home.

It may seem like an extensive process, but the more prepared you are for buying your new build home, the easier the process will be. Thinking of buying a new build home now? We have a lot of Castle Green developments in progress and our sales team are always happy to answer any questions and help you find your new home.