Author Topic: Buying a newbuild - when do I need to sell existing home  (Read 12227 times)

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newbuild_newby

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Buying a newbuild - when do I need to sell existing home
« on: May 12, 2016, 01:02:44 pm »
I've never wanted a new-build property until now, but now I'm set on the idea. I've been told the houses are planned to be released at the end of June and I'm expecting the development to be popular.
So I'm doing all my research and planning now so I'm fully informed. I still expect to be buying off plan though, and wait 4 months for the houses to actually be built (Redrow development phase 1 of many).

So, the one bit I haven't got my head around yet is when do I need to put my current house on the market?

My current understanding is the time-scales are along these lines:
End of June - Houses released, reserve one
End of July (28 days later) - Need to exchange contracts and pay deposit - Presume mortgage needs to be agreed for this
Mid - Autumn - New house should be built for moving into

Ideally some of the equity in my current house will form part of my deposit, but then I'd be homeless whilst the new house was built - plus I'm not ready for it to go on the market yet

If I could find the deposit another way, could I put my house on the market at the end of June, assume I can sell it over the summer, and put off exchanging contracts on this until the new house is built, or at least as long as possible (without loosing the buyer) to reduce any rent required.

Or are there any more options to consider (I do need to sell though!) - I'm not sure I want to part-exchange.

Sorry - this is probably quite a confused post - but I really want to know exactly what I'm doing before even speaking to the developers, so if any one can help me I'd be really grateful.

Sarah

PS - I do have a 6 year old and a 3 year old and a husband to consider in all of this too!


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Re: Buying a newbuild - when do I need to sell existing home
« Reply #1 on: May 13, 2016, 10:16:36 am »
First of all I would advise strongly against buying any new home. You have found the forum and presumably the main website and my Blog  which is a good start.

The good news is Redrow would appear to not be as bad as most of the housebuilders, although they lost a star in the customer "satisfaction" rating last year!  That said you still need to be very careful.
Follow the advice on the Do's and Dont's  This Redrow article might interest you too!

Regarding build timescales, you will need to be 100% certain when construction is due to be started on your chosen plot. From then, the Consumer Code for Home Builders requires Redrow to keep you informed of progress and give estimated (but not guaranteed date that the home will be ready for occupation.
These dates must be considered as a guide only!

With a decent site manager, reasonable weather and normal construction, it should take between 16 and 24 weeks to build the average 2 storey new home. Townhouses and flats can take longer.

What to do with your existing home?
If Redrow offer it and only if the valuation is right, I would suggest part-exchange.
When you exchange contracts, you will need to pay the 10% deposit.
If you haven't got this money to hand, I don't know how it is done using Help to Buy etc.
I would suggest that the buyer of your existing home exchanges contracts and you use their 10% towards your 10% on the new home. Another option would be a bridging loan, but this may be expensive if Redrow drag their heels building your new home.
No doubt the sales person will advise you how to do it as it must be a common problem.

As for selling your existing home, I would put it on the market as soon as you are certain and have reserved the new one. If you get a buyer, it can be stipulated that completion cannot take place until your new home is ready. Most first time buyers and cash buyers will be happy with that as the price is fixed and in a rising market your old home will be worth more by the time they move in but wont have cost them anything yet!  Be warned if the market crashes, they may pull out if they haven't exchanged.
New Home Blog - New Home Expert is committed to providing help and advice for people having issues with their new homes and difficulties with house builders as well as helping potential buyers reduce the risk of possible problems if they do buy.


newbuild_newby

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Re: Buying a newbuild - when do I need to sell existing home
« Reply #2 on: May 19, 2016, 12:24:40 pm »
Thanks for your response.

I've read most of the pages on your website, and am doing all I can to ensure I am fully informed - I have even read the job description for the sales people at Redrow so I know what they are out to try and achieve!

I do understand the pitfalls of new build, but for the next phase in our lives this is the most appropriate type of house. But thank you for your website and this forum, as I feel that I am much better prepared to make the process work well for my family.


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Re: Buying a newbuild - when do I need to sell existing home
« Reply #3 on: May 19, 2016, 01:39:32 pm »
Thanks to my campaign there will be even better protection and help after the APPG Inquiry publishes its report next month!

Preliminary announcement of findings and recommendations of the APPG Inquiry into the Quality of New Homes include a New Homes Ombudsman and a "Mandatory Right" for buyers to inspect, or have a professional inspect, their new home before legal completion.  Contact your MP and ask for this.

This might even help you if they get it implemented quick enough.
New Home Blog - New Home Expert is committed to providing help and advice for people having issues with their new homes and difficulties with house builders as well as helping potential buyers reduce the risk of possible problems if they do buy.