Changed mind about new build

[Sparkles2295]

Hi,

if we exchanged contracts on a new build which isn’t ready till June 2025, they haven’t asked for a deposit yet. Is it possible to pull out or will I still have to lose my deposit?

advice appreciated

thank you

I imagine you will lose your deposit. That's the point of them.

Yup. You have already exchanged contracts and paid the deposit. Speak to your solicitor on case there is a clause that allows you to withdraw by a certain date/point but I'd be surprised if there is one.

We’ve not paid the deposit yet, nor have they asked for it?

I doubt you've managed to exchange contracts without paying a deposit.

If you've exchanged contracts you're committed to buying and pulling out tends to mean you'll forfeit your deposit (or the value of). Have you actually exchanged contracts?

You won’t have exchanged contracts without a solicitor.

If you have a solicitor ask them if you can pull out.

Something very strange about this so I think you may have the wrong end of the stick. Exchange normally happens close to moving in and requires a deposit.

What does the contract say?

Are you sure you've used the right words op? I think more likely you've reserved a house rather than exchanged contracts. As others have said ask your solicitor if you've got one. If you haven't got one you won't have exchanged contracts.

Op I agree, are you using the right words here, what exactly have you done. Have you simply reserved or have you contracted? Is there anyone you can ask who can help you understand?

With a NB it is very normal for exchange & completion to be up to 12-months apart but usually there is only a few weeks between reserving & exchange.
A nominal (returnable) deposit is usually required on reservation but in the current market this may well have been dropped.

If you have exchanged (with no deposit, very unlikely) then you are contractually obliged to proceed or forfeit your deposit.
You must have employed a solicitor to have reached this stage, what do they say?

I mean no one on here can possibly know what you have signed, so it's impossible to know whether you will face a penalty or not.

But generally the whole point of signing a contract is for the buyer to get a house reserved in their name and a builder to get some guarantee of sale. So it is pretty likely that some sort of penalty may be due on withdrawal by either party.

Otherwise it would not be much of a contract.

Weve instructed the solicitors to exchange contracts, but haven’t paid deposit.

Email your solicitor now so they will get the email tomorrow, and ring them in the morning persisting until you manage to speak to them. Tell them you are NOT ready to exchange.

Exchanging contracts is a huge deal.

However surely no solicitor would advice to exchange contracts 8 months before completion? I mean, what if your circumstances change?

Most people, if they can no longer afford their home, they can sell it. But you can't sell a house that isn't built.

So how is it fair that you have to commit to something so far in the future?

I would talk to your solicitor. I've signed our contracts but our solicitor said they won't exchange until we consent (as in on the day). It's possible your solicitor has the forms but hasn't actually exchanged yet.

If you have paid a reservation fee you stand to lose some or all of it. I've just purchased a new build. The reservation fee was £1,000.

So you have not exchanged just reserved?

Many people buying anything other than their first home commit to a 10% deposit on exchange rather than paying the money. The house builder, unless very small will have the means and motivation to chase you for it legally so you'll end up paying it if you pull out.

@GettingThemFromHereToThere
However surely no solicitor would advice to exchange contracts 8 months before completion? I mean, what if your circumstances change?

Quite normal with a NB.
We reserved and then had to exchange within 6-weeks but completion was not for another 12-months.
Meant we had to exchange on the sale of our existing house although we did request a gap of 5-months before completion (which our buyer was happy to comply with) before moving into another house we owned to tide us over until our NB was ready.

We were completely unaware of the process (it had been years since we moved and had never owned a NB before) but the more we investigated the more we discovered that it was completely normal.
Of course this is when you are buying off-plan (which gives you the advantage of watching the build, timely ordering of accessories, changes to socket positions etc etc), if you buy a NB that is already (or nearly) built then the timescales are much shorter.

It all depends on whether the deposit is non refundable or not.
I'd say it's refundable.

Hey guys thank you for your responses after speaking with our solicitor the 10% percent is due on exchange. And there is no cooling off period once you agree we are legally binded so will be going along with the sale otherwise we will end up losing the deposit. Thank you all for your help :)

I don’t think reservation fees are usually returnable, unless there is something unforeseen and once contracts are exchanged, you’re committed to 10% of the house price if you withdraw.

You are legally bonded AFTER exchange not before so you can pull out before that

If you mean reservation fee then yes you will lose that but usually it's only £1000 ish

Check your facts if you aren't sure