To ask about exchange of contracts on a new build not yet built?

[Helppppp123]

Hi

Currently interested in a property not due to be ready until December. Is it normal to exchange contracts within 28 days of reserving? What happens if the house is delayed with completion, does that mean mortgage offer etc can expire and having to start whole process again or risk loosing deposit. FTB so researching everything at the minute x

It's very normal to exchange contracts before the house is built. Mortgage offers do expire but most lenders will be able to extend this at their own criteria. It would be best checking with your lender whether they offer this, but assuming you can still get a mortgage even if you do extend, there should be no reason to lose your deposit.

Hope this helps 😊

We bought a new build a few years ago. We might have been told we had to exchange within 28 days of reserving but in practice it took much longer than that to complete the searches, get the plans and deeds actually done right (the developers kept missing bits off. Like the driveway or even the actual house). Even though we went over, the developers wouldn’t have wanted to start again from scratch with a new potential buyer. In our case it was more to make sure that we got things moving so that once the house was ready, we could exchange and complete very quickly (couple of days)- the developers like that because they usually rely on the money from the sales to continue financing the rest of the development that is still being built.

Our house was ready within 3 months of reserving though (as was expected), so we didn’t have a problem with mortgage offers etc expiring. The reservation fee was only £99 or so, which is a drop in the ocean and we wouldn’t have been too bothered if we had lost it.

Thanks to you both for replying. The plot we want has not yet been released as it isn’t within 6 months but she did say she will pull strings and get it released earlier. Looked the other day and it literally just has the ground wood/brickwork at the moment so still nowhere near ready. I just feel with it being ready near winter then it could cause delays and we could be in a tight mess running round for a new mortgage deal.

We exchanged before ours was built , never again . Left us with loads of problems and all I suspect because they knew we had exchanged and didn’t care.

We reserved on a brand new development and had to exchange with 28 days, in reality it took about 6 weeks with the back and forth between solicitors.

Regarding mortgage, usually the offer is only valid for six months then you have to apply for an extension. Our solicitor was able to get it written in to the contract that if the estimated completion date slipped and our mortgage offer was rescinded then we would not be liable and would receive our full deposit back. We are meant to complete in July some time.

We bought a new build a long way in advance of it being built. It took longer than 28 days to exchange but not that much longer. We exchanged in August and I think completed in February. Like @BigBadBarryatemyboat our solicitor put a clause into the contract that if for some reason we were unable to get a mortgage (we didn’t even bother applying until closer to completion time, though we’d been approved in principle) then we could get out of the contract and receive our full deposit back.

Thank you both, very interesting to read. I will definitely look into having this Claus written into the contract as this is what I’m worried about, loosing my hard earned deposit if everything was delayed and we couldn’t get a good deal again. Wonky what happened if u don’t mind me asking?