Brand new home buying procedure

Reservation
Buying a new home from a developer or builder is different from buying a second hand home. Once you have chosen your new home you will normally be required to pay a non-refundable reservation fee. This is typically Ł300 to Ł500. Some developers allow you to include this payment as a contribution towards the cost of your new home. At this time you will be asked to sign the developer’s reservation form and will be given a copy to take away. Some of the larger builders provide you with a Homebuyers file to keep all documents relating to the sale in one place. Your selected new home is now taken off the market and is at 'Reserved' status.

Once you have reserved, the clock is ticking! It is not uncommon for many builders, especially the larger well-known nationals, to require you to 'exchange contracts' within a set period, typically 28 days. If this is not met the plot is usually put back on the open market, sometimes at a higher price!

The following sequence assumes you have either sold your existing home, have a part-exchange deal or do not have a property to sell.

Week One

Instruct a solicitor
The sales advisor can sometimes provide you with a list of local solicitors who may already be familiar with the development. Some of these may have even already carried out Local Authority searches to save time. Your solicitor will act on your behalf, looking after your best interests throughout the purchase of your new home and the sale of your existing home should you have one. Once you have made an appointment to see your solicitor you will need to stress the importance of meeting the builder’s exchange deadline. Confirm that you have funds available for the deposit on exchange of contracts. Take with you the reservation form and a cheque for the search fee.

Arrange a Mortgage

It is most important to get independent financial advice as the mortgage market is very competitive and there are various products available. Your IFA will be able to advise you which product is best for your personal circumstances and requirements.

Make an appointment to see Building Society, Bank or Mortgage broker. You will need to take with you:

1	Six month’s payslips

2	Proof of residence……….. Council tax or utility bill

3	Proof of identity……...…… Driving licence/ passport

4	Proof of age………………. Birth/marriage Certificate

5	If living in rented……….…. Landlord’s name and address

6	Details of any loans

7	Bank details and six month’s previous statements

8	Cheque for arrangement and valuation fees

9	Details of any endowment policies

10	Solicitor’s name and address

Week Two

Check the progress of the written mortgage offer. Has the survey been done? If not, chase the mortgage provider or your broker. Advise solicitor of mortgage offer as soon as it is received.

Week Three

Check the progress with your solicitor
Has the search been received? Has the mortgage offer been issued?

Organise funds for the deposit for exchange of contracts (typically 10% of purchase price) Building Society cheque or bankers draft.

Week Three/Four

Arrange an appointment with your solicitor to go through the draft contract and sign.
Take your deposit for exchange of contracts.

Exchange Contracts.
Your solicitor will make all necessary enquiries to obtain all information concerning all factors that may affect your new home before exchanging contracts. Once exchanged, the property transaction is legally binding and the status changes from 'Reserved' to 'Sold'. After you have exchanged contracts, ask your solicitor to send you your NHBC Buildmark documents.

Arrange a professional removal company

Many people hire a van and move themselves. However if you have a lot of belongings, it is well worth paying for professional removers. Get at least three quotations, ask for personal recommendations from friends and family and remember that the cheapest company isn’t always the best. Like everything else you get what you pay for. Make sure you request enough boxes of varying sizes for all your belongings and check that your insurance covers your contents whilst they are in transit during the move. Also check that your removal company has adequate insurance and is a member of the British Association of Removers. It is probably easier (and less expensive) to do the packing yourself. Consider starting this several weeks ahead of the move. Do not forget the loft, the garage or garden shed.

Selections and Extras

Some builders allow you to select your personal preferences from the ranges available for kitchen units, worktops and wall tiling for example, on or near the time of reservation. However, many builders do not act on these until after exchange of contracts, especially if the selections could be contentious should the sale fall through. Now is the time to firm up your selections and to personalise your home, selecting any optional extras you would like the builder to carry out, thus avoiding the inconvenience of having additional work carried out by tradesman after you have moved in.