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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 as more complex compared to previously owned buildings.
Before finding the perfect conveyancing solicitor for the job, it would be wise to familiarise yourself with the conveyancing process for new builds so that you’re aware of what to do and when. 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.
The new build conveyancing process is quite different from previously owned properties and is often thought of as more complicated. For example, to start the transaction and make an offer, you’ll have to reserve the property by paying a reservation fee which 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 will have to commit to the sale without seeing the finished house. 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.
As with any conveyancing process, it’s important to look around and compare quotes to find the perfect solicitor or conveyancer for you. During your search, ideally, you’ll want to find someone who specialises in new developments and the complexities of the tasks at hand. Due to the higher workload 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, especially within 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 than usual and so the more help you have the better.
One of the major stages of any conveyancing process is conveyancing searches. To ensure quicker results, your solicitor will request searches fees which should be paid as soon as possible to avoid delays. If the searches are delayed then so is your mortgage as your lender will not issue a mortgage without the necessary information from the results, so it’s important that the searches go as smoothly and quickly as possible.
The conveyancing searches will provide you with as much information about the property as possible and help you determine whether it is worth the asking price making it a worthy investment. They also ensure that the developer is constructing the property legally and correctly. Your conveyancer will also look at planning permission and building regulations as well as any warranty schemes and information about the management company.
The deposit is usually paid to your conveyancer who will then transfer the funds to the developer’s solicitor upon the exchanging of contracts. You will be asked to pay between 10%-30% of the total price. You will also be asked to sign a contract agreeing to buy the property at the advertised price and to pay off the balance during completion.
By this stage, you should’ve agreed to a mortgage in principle and so now is the time to finalise the arrangements. Your mortgage lender will request a surveyor to conduct a mortgage valuation to determine the property’s overall value. If the house is still unfinished, then the valuation will be based on the plans and specifications provided.
As a buyer, it would be wise to get a mortgage offer before the exchange of contracts so that you know you can afford the purchase. But it’s important to keep in mind the expiry date of your mortgage offer. Many offers expire after 6 months and so it should be long enough for you to get to your completion date. However, if for any reason this is not the case or your offer expires earlier, you will have to re-apply or risk losing the mortgage.
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 just yet. The completion date can only be fixed once the house is finished.
During the completion period and when the house is fully-built, it would be wise to create a snagging list to conduct any final inspections. A snagging list is like a property survey for new builds but is more thorough than a mortgage valuation as it identifies issues or damage that needs repairing. It’s possible to do this yourself but it’s recommended to hire a reliable snagging surveyor to conduct a more thorough inspection. Some of the issues that could be found are:
Once you’ve uncovered these issues, you can take your snagging list back to the developer and request everything to be repaired before completion. If they are highlighted after this stage, it could be argued that the damage was due to wear and tear or even by carelessness whilst moving in.
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. To ensure the house is up to your standards and meets expectations, you should conduct a snagging list to see the finished product before the final payment is made.
The day of completion is usually 10 days after the house has been fully built and the contracts exchanged. The snagging list should be completed and the mortgage funds released. During this stage, the keys, building logs and owner’s manual are all issued and you’re officially given ownership. Don’t forget to ensure that you’re given copies of everything, including the guarantees relating to your new build.
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, overall, the process should be a lot quicker.
The conveyancing process for new-builds is usually much quicker than the usual length for previously owned properties. If you’re ‘buying off-plan’ you will usually be given 28 days after you reserve a new build to complete the legal process and exchange contracts. The conveyancing searches can take up to 3 weeks to complete, taking up most of the time used.
However, a freehold transaction can take up to 8 weeks to complete whilst a leasehold transaction can take up to 12 weeks due to more work having to be done. It’s important to find an experienced conveyancer, preferably who specialises in new-build conveyancing, to help with this process so that you can exchange contracts in time to save your reservation deposit.
Now that you’re aware of the conveyancing process for new build properties, it’s time to find a reliable and experienced conveyancing solicitor to lend a hand and offer advice. Compare My Move can connect you with up to 4 fully-licensed conveyancers in your local area. All you have to do is fill out our quick and easy form to begin.