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Original poster

How long after receiving mortgage offer to completion for a new build?

27 replies

zuza96 · 30/03/2023 13:36

We've just received our mortgage offer today and I wanted to ask from your experience how long has it taken from receiving the mortgage offer to completion on a new build? When we bought our first property which was pre owned in 2019, it took two months and a half to complete after receiving the mortgage offer but since there is no chain with a new build will this be quicker?

OP posts:
Candleabra · 30/03/2023 13:38

is the house built? Completion can only happen when the house is finished and ready to move into. What completion date have the builders given you?

Original poster
zuza96 · 30/03/2023 13:40

Candleabra · 30/03/2023 13:38

is the house built? Completion can only happen when the house is finished and ready to move into. What completion date have the builders given you?

The roof has gone up on it about a week ago- they estimate it will be complete in June/July

OP posts:
CatOnTheChair · 30/03/2023 13:43

I reckon you'll move August then.
It's totally dependant on the house being completed. Nothing else should hold things up longer than that on the timescales given.

Original poster
zuza96 · 30/03/2023 13:45

CatOnTheChair · 30/03/2023 13:43

I reckon you'll move August then.
It's totally dependant on the house being completed. Nothing else should hold things up longer than that on the timescales given.

so completion can't happen if the house is not ready to move into correct? so our buyers will need to wait to complete the same time us ours? sorry this is all new to me as we have't sold and bought a property at the same time

OP posts:
Bluevelvetsofa · 30/03/2023 13:50

You’ll be expected to exchange fairly soon and that might mean you’ll need to exchange and complete on your current house. I agree that an estimate of August for completion is probably right. Some of it will be weather dependent too.

What many people have to do when buying a new build, is to rent for a time, between selling and completing on the new one. Your buyers might not want, or be able to wait until the summer, so you might have to find a short term solution if you don’t want to lose them.

CatOnTheChair · 30/03/2023 13:55

Yeah, don't complete until it's ready to live in!
You could exchange and complete on your current house, and move somewhere else for a bit.
Or you all exchange early on the current chain because that's what the builders will want) and complete at a much later date.

As soon as you complete, you need to move out of you current house as you no longer own it.

PicturesOfDogs · 30/03/2023 13:59

As others said, on a new build legal completion can’t occur until ‘practical completion’ has occurred, which means the house is signed off as habitable.
I recall there are warranty certificate that must also be signed off before legal completion

Saisong · 30/03/2023 14:00

My SIL is buying a shared ownership house. Mortgage arranged last November, exchange was scheduled for end of Feb, but has been delayed and delayed. They are now promising June. House is fully built and I believe fitting has been done, but they are waiting on various sign offs from electricity to water. Its a painful process - she is of course concerned about her mortgage offer timing out. Its caused no end of problems with her current rental too.

Aftjbtibg · 30/03/2023 14:02

You can’t complete until they’re literally ready to hand you the keys

Original poster
zuza96 · 30/03/2023 14:06

Bluevelvetsofa · 30/03/2023 13:50

You’ll be expected to exchange fairly soon and that might mean you’ll need to exchange and complete on your current house. I agree that an estimate of August for completion is probably right. Some of it will be weather dependent too.

What many people have to do when buying a new build, is to rent for a time, between selling and completing on the new one. Your buyers might not want, or be able to wait until the summer, so you might have to find a short term solution if you don’t want to lose them.

Our buyer actually said that she is pretty flexible as we explained from the start we're getting a new build and she's living with her parents so not in a rush, so might be able to complete our current house and new house at the same time?

OP posts:
stopringingme · 30/03/2023 14:13

@zuza96

Be aware that they might get things done quicker and they will expect you to complete when it is ready.

You should have paperwork which tells you everything.

Our house was ahead of schedule and we ended up paying £40 per day for 10 days for them not to put it back on the market as our buyer was mucking us about.

We ended up borrowing the money off of our parents to pay off our old mortgage to complete on our new build as it turned out our buyers would not be ready for 6 weeks as going through a divorce.

This was 20 years ago so things might of changed, read all the paperwork you have signed with the builders.

Candleabra · 30/03/2023 14:23

Huge push on us to exchange (10% deposit) no less than 6 weeks after reservation. Exchanged on new build same day we completed on our old house. Then spent months renting as new build house not ready. Completed over 6 months later. It’s not the easy buying option I thought it was!

Original poster
zuza96 · 30/03/2023 14:50

Candleabra · 30/03/2023 14:23

Huge push on us to exchange (10% deposit) no less than 6 weeks after reservation. Exchanged on new build same day we completed on our old house. Then spent months renting as new build house not ready. Completed over 6 months later. It’s not the easy buying option I thought it was!

so we reserved about a month ago, and they want us to exchange on the 21st of April, could we exchange contracts at the same time with our buyers? and also complete at the same time in the summer? considering our buyer knew that's when we're wanting to move and said she is flexible and does't mind? also if completion was to be at a different date for the house we re selling and the house we're buying would legal fees, estate agent fees be paid when we complete and move in ourselves or when we complete the sale of the house we're selling?

OP posts:
CatOnTheChair · 30/03/2023 16:01

It would be very wise to try and exchange on your sale at the same point as exchanging on your purchase - otherwise you risk ending up with your buyer pulling out and 2 houses.

If you complete on your sale before you buy, you will pay the estate agent fees from the sale money. And the Solicitors sale fees.
You won't pay the Solicitors purchase fees until that completes.

owiz · 30/03/2023 16:19

You'll need to exchange contracts same time as your buyer, so basically you are expecting them to exchange in April but not move until you are ready, so you need to be mindful of what an ask that is on them, we personally broke the chain and went into rented so our buyer wasn't impacted by our build.

How long are yours and your buyers' mortgage offers? You'll have a long stop completion so whilst they might say June/July they are not legally bound to that, it can be delayed, so you need to be happy your mortgage offer will last.

Candleabra · 30/03/2023 16:48

What we did was combine the house sale completion and house purchase exchange. I would only exchange on the new build once all the monies from the sale were in the bank on completion. It was too big a financial risk otherwise (depends on the sums involved in your transaction though)

Day 1 House sale - exchanged
Day 2 House sale - completed (morning) AND house purchase - exchange (afternoon)
6 months later - House purchase - completed

Original poster
zuza96 · 31/03/2023 15:03

owiz · 30/03/2023 16:19

You'll need to exchange contracts same time as your buyer, so basically you are expecting them to exchange in April but not move until you are ready, so you need to be mindful of what an ask that is on them, we personally broke the chain and went into rented so our buyer wasn't impacted by our build.

How long are yours and your buyers' mortgage offers? You'll have a long stop completion so whilst they might say June/July they are not legally bound to that, it can be delayed, so you need to be happy your mortgage offer will last.

I did explain above that before accepting the buyers offer we asked our buyer is she was flexible and willing to wait until summer to move in and she said yes as she is living with her parents so that won't be a problem.
Our mortgage offer is available for 6 months I assume hers is the same. I do believe June/July is realistic as we've seen the progress the house made so far. If there will be further delays we can break the chain and move out and complete on our sale in July if the house won't be ready by that time. We spoke to our solicitor and asked for exchange and completion to be done simultaneously with our sale and purchase and he said that he'll do that so hopefully it won't be an issue

OP posts:
TwoManyKids · 31/03/2023 15:17

Candleabra · 30/03/2023 14:23

Huge push on us to exchange (10% deposit) no less than 6 weeks after reservation. Exchanged on new build same day we completed on our old house. Then spent months renting as new build house not ready. Completed over 6 months later. It’s not the easy buying option I thought it was!

Ours was the same. Hounding me to exchange. In the end, that and them telling me I had said I would break the chain when I hadn't, led to me having a break down.

owiz · 31/03/2023 15:26

@TwoManyKids oh god it was so awful, I was in tears everyday in those last couple weeks, such a horrible process. It was totally worth it in the end for us but so unnecessarily cruel.

TwoManyKids · 31/03/2023 15:57

@owiz Begins with P?

OhhhhhhhhBiscuits · 31/03/2023 16:07

As a buyer I wouldn't exchange now and complete in July/August. Too many things could happen to the property in those months and I would be legally responsible for it as we would have exchanged contracts. You are also advised to get home insurance from when you exchange. Paying home insurance for all those months would piss me off.

If you want to keep your buyer, move out and exchange and complete on the sale and then carry on with your purchase.

Original poster
zuza96 · 31/03/2023 18:43

Candleabra · 30/03/2023 16:48

What we did was combine the house sale completion and house purchase exchange. I would only exchange on the new build once all the monies from the sale were in the bank on completion. It was too big a financial risk otherwise (depends on the sums involved in your transaction though)

Day 1 House sale - exchanged
Day 2 House sale - completed (morning) AND house purchase - exchange (afternoon)
6 months later - House purchase - completed

What do you mean by the financial risk?
If we were to exchange the sale and purchase in May complete the sale and purchase simultaneously in June/July why would that be a risk?

OP posts:
123ZYX · 31/03/2023 18:59

Ask your solicitor if the builders are suggesting a long stop date - no one mentioned it to us until our solicitor saw the contract.

Basically, it says that completion will be up to x date, or earlier with 10 days notice. If it goes beyond x date you can pull out without risking your deposit (I think we'd have lost the initial deposit, but not the deposit paid on exchange).

It caused us issues because the long stop date was after our mortgage offer expired. Our house was close to finished, so we took the risk, but it is a significant risk especially if you've only just got a roof and mortgage rates could increase if you need to get a new offer, or there's always a risk you won't get a new mortgage offer at all and lose your deposit

Candleabra · 31/03/2023 20:03

What do you mean by the financial risk?

@zuza96 sorry I should have said … the financial risk.. to me. Your situation may be different.

My new build was significantly more than the price of the house I was selling. The deposit for the new build was 10%. I couldn’t pay it without the proceeds of the full house sale. If I’d paid on exchange I’d have had to put in additional cash, which i wasn’t prepared to do just in case my house sale collapsed after exchange (unlikely but possible). Maybe I was over the top in being risk adverse, but that was my decision.

I really had no idea how complicated and annoying buying a new build is if you have an existing house to sell. It seems to be pretty much impossible to tie in completion of both properties together. (Though it sounds like your buyer is more relaxed than mine was).

user143777534 · 31/03/2023 20:12

If things like simultaneous exchange are important to you, make sure you instruct your solicitor to that effect in writing, not just verbally.