When Do You Exchange Contracts on a New Build: A Guide for Homebuyers
Buying a new build property can be an exciting and daunting experience at the same time. It’s a significant investment, and you want to make sure that everything is set up correctly.
One of the most crucial steps in the process is exchanging contracts. This is where both you and the developer agree to the terms and conditions of the sale and make a legally binding commitment.
But when exactly do you exchange contracts on a new build? Here’s what you need to know.
The Reservation Period
When you decide to purchase a new build property, you’ll typically reserve it by paying a reservation fee. This fee will take the property off the market for a limited period, usually 28 days, giving you time to carry out your due diligence, such as property surveys and mortgage applications.
During this time, you’ll receive the contract documentation from the developer’s solicitor outlining the terms and conditions of the sale.
Once you complete the necessary checks and agree to the terms and conditions, you can proceed with exchanging contracts. This is where you and the developer will sign the contract and make a legally binding agreement.
At this point, you’ll need to pay a deposit, typically around 10% of the purchase price, which will be held by the developer’s solicitor until completion.
The completion date is when you take ownership of the property and pay the outstanding balance, including any final adjustments.
Typically, the completion of a new build property is around two weeks after the developer has issued the notice to complete. This notice will be served when the property is ready, and all the necessary checks, such as building regulations, have been completed.
After completion, you’ll receive the keys to your new home, and the developer will release the deposit to your solicitor, who will pay the outstanding balance.
In summary, exchanging contracts on a new build property typically takes place after the reservation period ends, and you’ve completed all your due diligence. Once exchanged, you’ll need to pay a deposit, which is held until completion, which typically takes place around two weeks after the notice to complete has been issued.
Make sure you work closely with your solicitor and the developer to ensure everything is set up correctly and that the process runs smoothly. With proper preparation and communication, you’ll soon be the proud owner of your new build property.