Buying a new house – what to expect and not expect?
To receive contracts quickly after you put down your booking deposit with the agent.
The developer’s solicitor will usually have the contracts and title documents ready to issue . Frequently the solicitors require them to be signed and returned within 21 days of receipt. This is not always the case. Be sure you have your loan approval in place and are ready to proceed. Frequently, the property you wish to buy is only a site. Eensure you have obtained all the relevant information about your house from the agent, visit the show house and the suppliers of any contents (e.g) kitchen and appliances.
To receive not one but two contracts.
Legally you are buying a site from the developer (Contract for Sale) and then employing the developer to build the house for you (Building Agreement). The two contracts may be combined but they should both still be there. Some developers issue one contract, being the Contract for Sale only for a new property. This is not acceptable as it does not afford the purchaser the protections included in the Building Agreement.
To receive plans, maps and list of specifications of fitting and finishes in the Contract.
You should review these with the brochure the agent provided and the showhouse specification to ensure everything that you were promised is in the Contract.
To have an exact completion date for the property in the Contract.
If you are buying a property that is being built, the developer will not commit to an exact completion date. Instead, the Contract allows the developer 18 or 24 months, from the date of signed binding contracts, to complete it. The completion date will be defined in the Contracts as 14 days after a completion notice is served on your solicitor. So, when you put your deposit down and sign the Contract you may have an approximate date of completion from the selling agent, but don’t expect that to be legally binding.
- To inspect the build before the completion notice is served on your solicitor. This means inspecting it when the house is finished.
Your Contract to be conditional on you having your mortgage in place.
Most contracts that issue do not have a loan conditionality clause in them.Your solicitor should request a the standard Law Society loan conditionality clause to be put in the Contracts if you are getting a mortgage. If the property takes more than 6 months to complete, the loan offer may expire before drawdown of the mortgage. If the Contracts are subject to loan approval, this gives you the possibility of exiting the Contract if, so some reason, you cannot get another loan offer after it expires.