How do people manage the six week deadline for new build bungalows?

[Whataflippincircus]

Since DH died, I’ve been thinking about downsizing to a bungalow. I love a new build and there are some lovely bungalows being built near me. However, if you reserve one they give you six weeks to sell your property and be ready to complete. If you can’t proceed, you lose your deposit. This is madness. How does anyone manage to buy a new build?

@Whataflippincircus have you talked to them about it?

They will give you longer than that, surely

otherwise, they could only sell to people currently in rented

Yes I’ve talked to them. They offer an assisted move, where their agent sells your house for you but I don’t qualify for that.

They said there is some leeway, if you’ve secured a buyer. There’s absolutely nothing selling round here.

I think this is fairly normal for any house purchase. No estate agent would recommend accepting an offer from someone who is not proceedable ie not needing to sell a property (ftb, cash buyer etc) or with a buyer for their property. We didn’t even look at houses until we had a buyer - no point in wasting everyone’s time and getting stressed about houses we were in no position to offer on.

You need to have accepted an offer on your property before you choose your new one. I know lots of people who have successfully bought new-builds.

Often, the new-build is late being finished and people have to move into temporary accommodation and put their furniture in storage.

The developers don’t make it easy, and there’s a lot to be said for buying an older property, but I do understand the appeal of a brand new one. A good friend of mine recently moved into one (yes, it was late - she had to move in with her mum and pay for storage) and it’s really nice.

I’m scared of putting my house up for sale and by the time it sells, there’s nothing left for me to buy.

Well, you can pull out of your sale if you can’t find anything. But really if you need to sell in order to move, you need to get an offer first. Otherwise it’s bridging loans or massively underselling to a “quick buy” company. No one will reserve a property for you for years while you try and sell yours. You could be massively overpriced or otherwise unsellable, particularly in the current slow market.

It’s the norm for any new build. So makes it hard unless you’ve sold already or can part exchange. I am buying a new build and am renting so made it easier, but I know someone had provisionally reserved mine but hadn’t sold, so I trumped them and reserved it. I exchanged after 8wks as was some issue with the searches as first ones to sell on the estate.

New builds are notoriously difficult for current homeowners to buy for this reason. I would echo previous advice to get yours on the market asap and have a sale agreed prior to putting down your reservation on the new build.

However, I’d also say that the house builder won’t be strict on the 6 weeks. If they can see that the sale is progressing and moving forward then they aren’t going to cancel the sale just because you hit 6 weeks.

Finally, you won’t lose your 10% deposit unless you have exchanged and then subsequently fail to complete. This is where the main sticking point comes in because it is highly unlikely that any ‘normal’ sale (ie the sale of your property) is going to be ready to exchange and complete in 6 weeks. However, if you haven’t exchanged on the bungalow the most you will lose is your reservation fee.

Is the bungalow ready to move into or is it still being built? If the latter you probably have a bit more wriggle room.

Saying that, when my parents were looking at a new build I did warn them off due to these exact complications. I think buying a new build only truly works if you are in rented (having already sold you home) or part exchange with builder.

The developer will say that you need to have a proceedable chain before they will even accept you putting down a reserve on a new property, whether it's a bungalow or otherwise.

so putting your house on the market now is a risk and may or may not result in you getting an offer and a chain being viable.

Just as an example, we are interested on a property on a new estate, that isn't due to be ready for at least a year, so our house is on the market now. If we don't get the plot we want, we have 3 others on the same development as backup plans depending on our sale.

beware of developers taking your current property as a part exchange, they'll want to give you a rock bottom price, much less than the open market, a bit like part-x on a new car, you never get the true value, due to the convenience of handing over the keys and not having to find a buyer. You're giving the risk to the developer, so you have to pay for that,

I think buying a new build only truly works if you are in rented (having already sold you home) or part exchange with builder.

that's what we've decided we are willing to do, to decouple our sale from our purchase. A few months of inconvenience for the long term benefit is worth it to us.

If the plot you want isn't even built yet the whole thing takes much longer than you expect. They won't tie you to the 6 weeks as long as things are progressing.

We bought a new build, had an offer on our house in Feb, reserved a house in March. We completed in July and had to spend 3 weeks living with my dad because the property wasn't ready until August. We really had to push them to even get that - my husband started a new job in the area 3 days after we moved in. This sort of delay is standard with a new build it turns out, they are often not ready to the builders own timeline!

You don't progress with the sale unless you've started a purchase.

I disagree about part exchange - it can be worth exploring. When I was looking at a new build we had 3 estate agents around who valued between £345-£350k. Part ex offered £335k but obviously with the advantage of no estate agents fees and less hassle. We decided against the new build so went to market normally and achieved asking price of £350k. However, when the chain broke down (not due to us) we also re-marketed and because we needed a quick sale not to lose our onward purchase we ended up accepting £335k, but obviously had to pay estate agents fees out of that. So my view is that the part ex was reasonable considering all the hassle it removed!

I’ve bought new builds a couple of times and never ever again will I buy from a builder. Even when I’ve been procedable there has been constant hassle and threats to pull out.
6 weeks is a really tight timescale, you definitely would need an offer on yours first and it will be stressful- sorry

This is standard with any onward purchase. The only way you can avoid it entirely is to sell, go into rented and then find somewhere to buy. With a new build you’ll need an offer on the table before you can reserve, then you’ll be expected to exchange within 6 weeks with a long stop completion depending on when the build is due to complete, so you need to be transparent with your buyer and hope they’re not in a chain because the 6 weeks is pretty challenging.

That's normal for new builds here, not just bungalows. You have to be ready to proceed, as in sold subject to contract stage.

Thanks for all the replies. I’d love one of these bungalows, they are almost finished and look lovely. There are two for sale. I don’t think it’s going to work out though. I foresee so much hassle trying to sell quickly and move forward.

Since DH died I’ve not dealt very well with any stress and this feels a bit overwhelming.

The other way round this is to wait a couple of years and buy one when one possibly comes up for resale. These brand new bungalows might not sell as quickly as you think giving you time to sell. Go and have another chat with them if this happens.

Are you sure they said 6-weeks to be ready to complete or 6-weeks to exchange as they are very different things?

When we bought our NB it was 6-weeks to exchange (stretched to neatly double this) but it was then a year before we completed and moved in.
During this time we agreed a long period between E&C on our old house (several months) and then moved into another property we owned for 6-months. Our NB popneighbours said they did similar (stayed with family, rented, owned a second property etc).

In that case you dont go ahead with your sale

When resold, they are often quite a lot cheaper as they lack the "brand new" label.

By that time, some of the building faults will also have been repaired.

I don't know the specifics of your situation so I cannot comment (ie how much you might have achieved on the open market, what the economy was like at the time you transacted, all important context), but the scheme that our developer is running (Something like Speedy Mover) involves very aggressive valuations by two estate agents on the basis of "valued for a quick sale". In other words it's a Fire Sale, rock bottom price with the goal of attracting a buyer in 6 weeks. The higher the value of the property the more you could potential lose in this scheme (notwithstanding that the value is only what people are prepared to pay).

the EAs like it because they get quick revenue out of it, but doing the sale at such a pace, the only one losing is the property owner, who will probably have to take out more mortgage to cover what they might have achieved on the open market to afford the NB.

of course you can always spin on your heels and walk away if you don't agree with the valuation but it's worth being aware of how these developers work. They want sales and they're not in business to care about how much someone gets for their current property or how much mortgage they need to take out.

On our development, not one of the bungalows (which have been completed for 3yrs+) has yet come up for resale. When new, each bungalow had a waiting list of hopeful buyers.
Any houses that have come up for resale have all SOLD for more than the new price.

Bungalows are very popular with older people but they don’t build many new ones. There’s more money to be made out of houses, which take up less land.

How long is it since you were widowed?

I was the one who managed the bulk of finances/admin and was still successfully in full time work but I found house/home stuff really difficult to deal with for a long time when I was widowed. I think it was partly anger/resistance to the idea that it was just me and not both of us but I struggled even to choose paint - something which I’d have done in seconds previously.

You may be best to take more time and take stock and rather than thing “ooh new bungalows” focus on what you want for yourself in the coming years both housing and lifestyle wise. Consider future proofing the existing house, different types of housing options and make lists of pros and cons. It can help you focus more objectively.