What are the stages of purchasing a New Build Property?
The stages of buying a new build: Explained
Stage one: Reservation
When you reserve a new build plot you will be asked to sign a reservation agreement and pay a reservation fee to the developer.
At this stage you will need to instruct a conveyancer to act for you on the purchase. Here at RWK Goodman we have a dedicated team of experts in our Bath, Oxford and Wiltshire offices who specialise in new build purchases and can assist you every step of the way. We will guide you on the matters noted below and more.
Stage two: Preparing for Exchange of Contracts
Once the contract pack has been issued by the developer’s conveyancer you will be given a deadline to exchange contracts – usually within 28 days, although some developers allow for example 6 weeks. This period of time is often referred to as the reservation period.
It is important that you do everything you can do to try and be ready to exchange contracts within your reservation period. If you require a mortgage you should apply as soon as you can and deal swiftly with any requests being made of you from your Solicitor, Lender or Mortgage Broker.
If you are not able to exchange by the deadline you should discuss this with your Solicitor and you may wish to ask for a formal extension to the reservation deadline or demonstrate what milestones you have reached to show your commitment to the purchase in other ways. There is a risk that the developer may withdraw your plot and you will lose some of your reservation fee if there are delays.
You will need to provide evidence of your ID and funding to your conveyancer as soon as possible so that compliance checks can be completed.
Relevant searches will need to be ordered quickly and will need to be in date on completion (no more than 6 months old). If completion is likely to take place after this then provided it is acceptable to your mortgage lender an indemnity policy can be put in place.
The contract pack will be reviewed by your conveyancer and any enquiries raised with the developer’s legal team. Key areas that your conveyancer will consider are:-
- Rights, restrictions and covenants affecting the developer’s existing title.
- Planning permissions and any planning obligations.
- Building regulations.
- New build warranties.
- The status of the roads and sewers within the development.
- Management land.
- The sale contract.
- The transfer wording (if you are buying a house) or the lease wording (if you are buying a flat) and the accompanying plans.
The contract, transfer/lease, mortgage deed, stamp duty form and any other relevant documents will be sent to you for signature and you will receive a property report from your conveyancer.
Stage three: Completion on notice
Depending on the progress of construction, completion will either be on a fixed completion date (agreed on exchange of contracts) or if the property is not yet build complete, completion will be on notice.
For completions on notice your plot, providing the developer is responsible and following industry guidance we will be given an anticipated completion date together with a longstop date or termination date. Once the property has been signed off by building regulations and the new build warranty provider, the developer’s conveyancer will serve your conveyancer with the notice to complete giving you a certain number of working days notice of the completion date (usually 10 working days).
We recommend that you do not give any notice on a rental property or make any financial commitments in anticipation of completion until the completion date has been fixed. This is because notice to complete can be served at any time following exchange of contracts meaning completion can be earlier or later than expected.
Stage four: Completion
Once we have received your notice to complete we will confirm the completion date to you and request any mortgage funds from your lender (or as we set up completion for a fixed completion date). The developer’s conveyancer will usually provide us with a completion statement showing the balance due on completion. This will take into account your reservation fee and any deposit already paid. Where there is a management company on the site you may also be asked to pay an apportionment of the service charge.
We will also send you your completion statement and request any balance money due from you or show you any proceeds due to you. You will need to provide us with the balance of any completion funds no later than 24 hours before the completion date.
On completion we will send the balance of the purchase price to the developer or their conveyancer and once it is received by them you will be able to collect the keys from the site office.
Following completion we will apply to Land Registry to register your new property title. Please note due to long delays at Land Registry it could take a year or even two for Land Registry to finalise the application but when we do have your new title register and title plan we will send them to you by email.
Stage five: Linking a related sale
We would be happy to assist with any related property transaction you may have when purchasing a new build property. Please see our article about purchasing a new build with a related sale.
Call the new build team today
New build property conveyancing solicitors
We have dedicated new build experts and streamlined processes. We are here to help you exchange contracts as soon possible.
Buying a new build property can be more complex than buying a ‘second hand’ property. This is why we have a specialist team to handle new build property transactions. Often time frames can be critical, so a knowledgeable and direct point of contact is key.