How does buying a new build work?

DoraDunebug · 2023-02-26T13:19:03+00:00

When you buy a non-new build, I guess you just have to have said your deposit by the time you exchange? I seem to think for new builds you need a deposit sooner, or exchange sooner or something…?

Bluevelvetsofa · 26/02/2023 13:23

You have an initial deposit to reserve the plot and then there’s a time limit on exchange, which is why your property needs to be under offer before they accept you as a buyer. At least, that’s been our experience.

Our house went under offer, we reserved the plot we wanted and exchanged a few weeks after. That doesn’t mean the house is ready to move in too though. They give you a timescale, so we knew there would be six months between moving out and moving into the new one.

Original poster

DoraDunebug · 26/02/2023 13:29

We’re first time buyers. Is the initial deposit usually a set percentage?

OP posts:

ChittyChittyBoomBoom · 26/02/2023 18:05

I remember rightly, our deposit was about £500.

Cupcakequeen75 · 26/02/2023 18:23

We had to be SSTC before they would allow us to reserve (£1k refundable) and then we had to exchange (both sale & purchase) within 42-days. The 10% deposit was expected to come up the chain (ours didn't so we funded it ourselves). After that we had to wait the nearly 12-months until the new house was ready to complete.
The biggest sticking point for most people (those selling, would not apply to a FTB) is that having exchanged on the sale, your buyer will be chomping at the bit to complete and move into your old home so most move out into temp accommodation. We arranged a 5-month delay between exchange / completion and then moved into my late parents home for the rest of the time.

FeigningConcern · 22/05/2023 23:30

Cupcakequeen75 · 26/02/2023 18:23

We had to be SSTC before they would allow us to reserve (£1k refundable) and then we had to exchange (both sale & purchase) within 42-days. The 10% deposit was expected to come up the chain (ours didn't so we funded it ourselves). After that we had to wait the nearly 12-months until the new house was ready to complete.
The biggest sticking point for most people (those selling, would not apply to a FTB) is that having exchanged on the sale, your buyer will be chomping at the bit to complete and move into your old home so most move out into temp accommodation. We arranged a 5-month delay between exchange / completion and then moved into my late parents home for the rest of the time.

I know your post was a while ago but can I ask a question?

Having to exchange within a short time frame isn't always possible. What happens if you don't exchange within the 42 days?

stardust40 · 22/05/2023 23:32

We didn't exchange within 42 days with our new build

stardust40 · 22/05/2023 23:34

Sorry didn't finish! We didn't exchange in 42 days .... nothing we could do about it.... solicitors here work at their own pace! There were no repercussions though!

Goldpanther · 23/05/2023 07:43

We had to pay £500 to reserve the house, then exchange with a 5% deposit within 42 days.

If you are using a Lifetime ISA you can keep saving into it (and getting the government bonus) and use the rest as your completion deposit.

House builders do seem to be really flexible, my sister exchanged with less than 5% deposit, and then made up the 5% as a Completion deposit.

Cupcakequeen75 · 23/05/2023 08:51

Our developer said we needed to exchange in 6-weeks but another local developer we looked at said 4-weeks.
As it turns out we were a bit late (held up by our non-proceedable buyer and lying EA) and we were getting bombarded with calls & emails from the sales office (some verging on aggressive) threatening to re-market the house but when we spoke to the solicitor (recommended by the developer) they were more chilled out and said that we were so close to exchange they wouldn't pull the plug on us.
Think it was 10-weeks in the end but it was very stressful, the grief coming from the sales team (who I have never forgiven) and the delay being purely down to our EA who lied about our buyer.

DorotheaFrazil · 23/05/2023 14:45

We didn't exchange within the required 6 weeks either. All the literature was very specific about the 6 weeks and I was bracing myself for a horrible few weeks of being complacent stressed out. But in reality, the developers didn't seem overly concerned. They were happy that things were proceeding and could see that we were doing our best to keep things on track. So it seems to depend on the developer and I suspect the individual people you're dealing with as to how much they are going to chase you.

DorotheaFrazil · 23/05/2023 14:46

*completely stressed out. Not complacent!