Here’s a free and easy to understand guide to buying a New Build house/ property.
Mortgages and how much you can afford
The first thing to do when you are buying a property, is to decide how much you can afford. Remember its not just the price of the house you need to think about, but also things like council tax, legal fees, factors’ fees etc. If you need a mortgage and don’t have a mortgage advisor, please let us know and we can put you in touch with a reputable company. You should ask your mortgage advisor if you have a mortgage in principle. This means that the mortgage company would in principle be willing to offer you a mortgage, but they can only begin the process properly, once you have a specific property to buy.
When you find the New Build property you want to buy
When you find the New Build property you want to buy and have paid or are about to pay your Reservation fee to the Site Office on the New Build Development site, then give us a call and we will explain the next steps to you. There is usually a fixed purchase price. The builders will ask their solicitors to contact us and send us their written offer to sell the New Build House/ Property. Our dedicated team will give you advice and discuss with you, all the relevant factors.
ID and Source of Funds
We will ask to see two pieces of ID from you at the outset. If you are providing a deposit, we will need to know at the beginning, where the money is coming from eg savings or a gift from a family member and we will ask you to provide evidence of the source of funds, such as bank statements, wage slips etc.
Mortgage offer
As soon as you have paid your Reservation Fee to the Site Office, you should contact your mortgage advisor. They need to submit your mortgage application to the lender, so that you can get the mortgage offer as soon as possible. Tell them if you are getting a gift towards your deposit.
If we also act on behalf of your mortgage lender, the lender will send us the mortgage offer as well as to you. We will let you know what documentation you need to sign. Later in the process, when we are ready to, we will request your mortgage funds from the lender in time for the date which your transaction will settle.
Missives
Some Builders will want the Missives (Contract) concluded months before your move in date, and some will be more flexible with timescales. Some will offer to take your house (called a Part Exchange) as part payment of the Purchase Price and you then only have to pay the remaining balance of the Price. The written offer received sets out the terms and conditions of the contract. Often the Builders’ Solicitors will not accept changes to these terms and conditions. We will explain what they mean to you. (The Date of Entry is usually not a fixed date, but a date after the house has been passed as fit and habitable by the Council).
We will then send the Builders’ Solicitors a written acceptance. At this stage the Missives are then concluded. The offer and the acceptance form the contract (otherwise known as the Missives) to purchase the property.
When this happens, it means that you and the Builder will have entered into a binding legal agreement, from which you cannot withdraw without incurring penalties, apart from in certain circumstances.
Checks on Title Deeds and Reports
As part of the process, we will check the title deeds pack on your behalf that the Builder’s solicitors will provide to us. There will be some Reports and Searches that we will need to check, that the Builder’s Solicitors don’t send to us. We will need to order them at your cost. We will also send you a copy of the title deeds so you can read through them yourself. If anything unusual comes up throughout this process, we will let you know.
Payment
The Builders sometimes expect a deposit to be paid to their Solicitors by us, on your behalf on conclusion of Missives. Conclusion of Missives and therefore payment of the deposit, can sometimes take place months before your move in date. We will request the funds from you, before we need to make payment.
We will send you a breakdown of what you need to pay us in advance of when you move. This will include not only your deposit, but also our Fees, VAT and outlays and any other costs the Builder’s Solicitors tell us you are due to pay. Once we have a more definite date of when you will move, the Builder’s Solicitors usually send us a Statement breaking down the amounts due. We will ask you to pay us by bank transfer to us, no later than one working day before you move.
Settlement
On the Date of Entry and once we have received your mortgage funds from the lender and also the deposit from you, we will pay over the purchase price to the Sellers’ solicitors on your behalf. We will then tell you when your house purchase has completed and when you can get the keys to your new home.
Steps after your New Build House/ Property Purchase has completed
We will register you as the new Home Owner and send you a copy of your new Title Deed called a Title Sheet. This step can take time.
We hope you have found this guide easy to understand and that it will make the process easier for you.
Contact our Conveyancing Solicitors, Glasgow, Coatbridge and the whole of Scotland
Please call our Property Law team today on 0141 404 6575 or fill out our online contact form.