Author Topic: Exchange....but why?  (Read 50 times)

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l33nap

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Exchange....but why?
« on: November 27, 2018, 04:25:44 pm »
Hi forum - I am a new member! 
I'm a little confused and wondered if someone could clarify something for me.

I currently own a property which I live in. The new build we want to purchase doesn't even have a show home up yet but we are well informed from looking at the planning permission details on the council website. 

We have been told by the builder (in this case Bellway) that we should come along on the day of opening to reserve our plot.  I have sought some advice from a mortgage advisor today and the mortgage won't be an issue however she did mention that the house builder might push to exchange asap.  And if we don't exchange then the reservation will be lost the plot can be sold. 

How on earth are you expected to exchange when you haven't sold your current home and haven't even seen the inside of the walls yet?  Thanks in advance for your help.


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Re: Exchange....but why?
« Reply #1 on: November 28, 2018, 07:34:42 am »
Nearly all housebuilders expect buyers to exchange contracts with 28 days. This means paying 10% deposit, which is non-refundable if you back out for whatever reason afterwards.

The exchange 10% deposit would be made up of your own savings and/or the exchange deposit from your existing home which you would need to sell first if you haven't got savings.

The home isn't built yet and you are buying off-plan. By the sound of it you haven't even seen Bellway's brochure yet.  The price could and often does go up as the home is constructed so buying off plan means you benefit before even moving in. But be ware you could be locked into buying at a HIGHER price is the market falls which is could do with all this Brexit going on.

You may have an opportunity to book an "early bird" where you get first refusal on a particular plot when it is released for sale. This might give you time to at least exchange on your current house.
You may even be able to get a housebuilder to part-exchange on your existing home.

My advice would be NOT to buy one of the first homes on a development.  Even better, not to buy a new home at all until a New Homes Ombudsman is set up by government.
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