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Buying Off Plan and Preparing For Completion
28th September 2016

Preparing for Completion

Speak to a financial advisor before you do anything:

You won’t be able to get a mortgage offer until about six months before completion, however it depends on which lender you use. A financial advisor will give a good steer as to what can be borrowed and when you should begin the formal application process. You should speak to a financial advisor to make sure that you will be able to procure a mortgage when the time comes.

Decide what your aims are:

Are you looking to live in the property or is it an investment?  If it’s an investment, are you looking for a solid rental yield or long-term capital growth, or both?

Find an appropriate development and then select the right apartment:

There are a huge variety of locations and price points available.

Pay your deposit:

Once you have agreed a price, you will need to pay your reservation deposit which takes the property off the market and goes towards the purchase of the property. You will also need to fill out a reservation form and appoint a solicitor. If you do not have a solicitor, there is often a suggested solicitor who is familiar with the specific process for that development, which can make exchanging contracts simpler.

Let the solicitors do their job:

The exchange process usually takes around 3-4 weeks.

Time to exchange:

You will usually be required to put down 10 per cent of the purchase price (minus your reservation fee already paid). Depending on the development, there may be further staged payments due before completion.

Watch and wait:

Now you can sit back and watch the building going up, and your property being constructed. The developer will often send updates during this period to let you know how construction is progressing.

Get your mortgage sorted:

After you have exchanged, check with your financial advisor when you should start your formal mortgage application process. It depends on the lender but generally it is around six months prior to completion.

Completion:

When your property is ready, you will be sent a completion notice telling you how long you have to complete on your purchase – usually about two weeks. You just need to let your mortgage company know and your solicitor will do the rest. You will be able to collect the keys on the day of completion.

The Benefits of New Build Homes

New build homes are appealing to home buyers for a number of reasons:

Many people like the fact that they will be the first to live in the property

Repairs and redecoration costs should be minimal for the first few years

Buyers can often select fixtures and fittings to tailor the property finish to their taste

New properties usually come with guarantees. As well as NHBC’s 10-year warranty, other companies provide warranties and insurance for new homes, such as BLP’s housing warranty insurance

Homeowners can enjoy lower running costs and energy bills

Always…

Compare the new build home you are looking at with similar “old” properties in terms of value, space and rental value in the local area. Check the price per square foot, and compare it with the resale market so you understand the extent of the premium you will be paying.

Negotiate with the developers. Find out what other properties on the site have been sold for on Zoopla or Rightmove. There can often be deals to be done at the end of their financial year, or when there are only a few properties left to be sold.

Shop around for good deals. Many developers offer incentives to differentiate them from other local developers, such as free furnishings, a car parking space, or by paying your legal fees or stamp duty. If you can’t negotiate money off the price, the offer to pay your stamp duty is probably the best freebie to take up as it will probably save you the most money, but be aware that any incentives offered by the developer over about 5% will impact on how much your lender is willing to hand out.

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