Conveyancing for New Builds
Hiring a conveyancer is a required service when buying or selling a property. This is especially so when purchasing a new build property as the process is often considered complex compared to previously owned buildings.
Before finding the perfect conveyancing solicitor for the job, it would be wise to familiarise yourself with the new build conveyancing process so that you’re aware of what it entails. Each stage is just as important as the last.
Compare My Move has created the ultimate guide to help you research what’s involved when buying a new build property. Step by step, we’ll help you understand the new build conveyancing process and why each stage is so important.
1. Reserving the Property
The new build conveyancing process is different and more complex compared to previously owned properties. For example, to start the transaction and make an offer, you’ll have to reserve the property by paying a reservation fee. This is often non-refundable but deducted from the final price. The property will usually be reserved for 28 days once this has been paid and so the conveyancing process must begin immediately.
It’s important to note that many new build properties will be purchased ‘off-plan’, meaning you'll have to commit to the sale without seeing the house finished. You’ll have to rely on looking at show-homes and the specifications provided to you. If this is the case with your process, make sure you’re completely happy with the design of the building before committing to the transaction.
This reservation period is also a great opportunity for you to begin asking questions about the development.
2. Find A Experienced and Qualified Conveyancer
As with any conveyancing process, it’s important to compare quotes to find the perfect solicitor or conveyancer for you. During your search, you’ll want to find someone who specialises in new build developments and the complexities of the tasks at hand. Due to the additional work required, you’ll notice that conveyancers charge more for new build properties so comparing quotes is the best way to begin.
It’s recommended to hire a conveyancer as it’s much easier to get through the legal requirements with a trained and experienced professional. This is especially so when you consider the strict time constraints you’re under with a new build property. Many solicitors believe that the conveyancing process for new developments is much more complex and so the more help you have the better. It's also important to ensure you instruct a professional who can highlight any restrictive covenants on the property before you commit to the purchase.
3. The Conveyancing Searches
One of the major stages of any conveyancing process is conveyancing searches. To ensure the results are received quickly, your solicitor will need to apply for the searches ASAP. It is therefore important that you make payment of the search fees to your solicitor at an early stage to help avoid delays. Some solicitors might offer a fixed fee conveyancing service, but this typically doesn't cover the searches, just their legal fee.
The conveyancing searches will provide you with as much information about the property as possible. They'll also help you determine whether it's worth the asking price making, it a worthy investment. They also ensure that the developer is constructing the property legally. Your conveyancer will also look at planning permission and building regulations as well as any new home warranty schemes and information about the management company.
4. Securing Your Mortgage and Paying the Deposit
Before exchange of contracts can be achieved you will need to obtain a mortgage offer. Your mortgage lender will request a surveyor to conduct a mortgage valuation to determine the property’s value. If the house is still unfinished, then the valuation will be based on the plans and specifications provided.
It’s important to keep in mind the expiry date of your mortgage offer. Most mortgage in principle offers expire after 6 months and so it should be long enough for you to get to your completion date. However, if construction of the property is delayed beyond the offer expiry date, then you will need to obtain an extension or a new mortgage offer.
The deposit is paid to your conveyancer who will then transfer the funds to the developer’s solicitor after exchanging of contracts. The deposit is usually 10% of the sale price. If the developer asks for more than 10% then you should be wary and seek advice from your conveyancer before agreeing to pay it.
5. Exchange of Contracts
As previously mentioned, it’s common to be given a deadline of 28 days from reserving the property to the exchanging of contracts. Competition is usually quite high for new builds and so, as a buyer, you’ll want to find a reliable conveyancer quickly to get to this stage. This is when your conveyancing solicitor will check the contract, the title of the property, the planning documents and any other important paperwork. You’ll also be asked to sign any necessary documents.
The exchanging of contracts means that the house will officially be yours when built. However, it doesn’t necessarily mean that you’ll have a concrete completion date yet. The completion date can only be fixed once the house is finished. Most new build contracts provide that completion will take place 10 days after the developer confirms the property is ready. This is known as ‘completion on notice’.
6. Find a Snagging Surveyor
Once the developer confirms the house is ready it would be wise to inspect the property and create a snagging list. A snagging list is like a property survey for new builds. It's more thorough than a mortgage valuation as it identifies any issues with the ‘finish’ of the property and items of repair. It’s possible to do this yourself but it’s recommended to hire a reliable snagging surveyor to conduct a thorough inspection. Some of the issues they could find include:
- Defects with decoration or fixtures
- Sloppy paintwork
- Cracked tiles
- Leaking boilers
- Broken fittings
- Large cracks
- Poorly fitted appliances
Once you’ve uncovered these issues, you can take your snagging list back to the developer and request everything is repaired .Its important that the snagging list is prepared before you move into the property. If they're highlighted after you’ve moved inthen you run the risk of the developer claiming the issues are due to wear and tear or even carelessness whilst moving in.
Most new build contracts make provision for snagging and that the developer will be responsible for making good items on the snagging list. The developer will be given a reasonable time to rectify the snagging items but they will not be obliged to repair everything on the list before you move in if they are considered ‘minor’.
A snagging list is a good excuse to view the property before completion day. Most new builds will be unavailable for viewings as they are under construction.
The day of completion is usually 10 days after the developer confirms the house and all agreed furnishings have been completed. The snagging list should be completed and the mortgage funds released. On the completion day you will be able to move into the property and be given the keys, building logs and owner’s manuals
It’s important to note that the developer might not always be able to give a concrete completion date. It all depends on the property’s condition, the results of the snagging list and other external factors. However, new build properties still have a smaller property chain and so the process should be a lot quicker.
How Long Does Conveyancing Take on New builds?
The conveyancing process for new builds is usually much quicker than previously owned properties. Most developers will insist upon a 28 day period for you to exchange contracts after you have paid the reservation fee. The completion date will vary, depending upon how advanced the construction of the property is at the time you reserve it. The developer will give you an estimate time frame for completion.
It’s important to find an experienced conveyancer to help with this process so that you can comply with the developers deadline to exchange contracts. It would be recommended to find a conveyancer who specialises in new build transactions.