Author Topic: Reserving a new home and deposit on exchange of contracts  (Read 1487 times)

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Willis

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Reserving a new home and deposit on exchange of contracts
« on: July 01, 2021, 01:18:43 pm »
Looking at purchasing a new home. My existing home is under offer and proceeding well.

Questions: This builder expects exchange of contracts within six weeks. Even though I have a mortgage in principle - porting existing mortgage, the earliest appointment with Building Society to fill in application forms is 3 weeks away. This makes it unlikely that an exchange can happen in six weeks. Bearing in mind, solicitors are still backed up.

Next question is: I am relying upon deposit from my sale to put deposit down on new house. This also is going to be a problem as my buyer does not want to exchange until near completion.

Do builders expect everyone in the chain to exchange at the same time so that my purchase can go ahead? Although there is no chain below my buyer. Its a bit like every one in a chain has to jump to the builders tune!

Where do people actually get 20 or 30 grand from to put down a deposit on a new house?

Spoke to someone at TaylorWimpey  (not going with them) who said they wait until my home is sold before they expect deposit although they do expect exchange in 7 weeks.

Minefield or not. Didn't know this forum existed and seriously rethinking the new build.

Thanks and hope I make sense.


Matron

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #1 on: July 02, 2021, 11:50:21 am »
You don’t mention which builder you’re referring to but we were in a similar situation when we bought our Bellway home 6 years ago. We didn’t make the 6-week deadline but they were prepared to wait fortunately.

I honestly thought we would have lost the house but our sales rep just kept in touch with us weekly and we could reassure her everything was going through with our buyer as quickly as possible. She even spoke to our solicitor (not Bellway recommended) and I think he confirmed there wouldn’t be any problems. Hopefully you’ll be given some extra time as well. Just have the conversation with the sales rep.

Tim Fee Snagging Inspector

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #2 on: July 05, 2021, 12:33:07 pm »
It is not uncommon for housebuilders to require exchange of contracts in 28 days!
Six weeks is quite a long time.
It can be an issue to find 10% of the purchase price before your existing home also exchanges.

In a dead market the new home buyer can be given more time. In the current market someone else will come along in a few days and buy your chosen plot. probably at a higher price if you cannot proceed.

A builder has cake and can eat it situation!
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Willis

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #3 on: July 25, 2021, 08:31:12 pm »
Thanks for the replies, guys.

Dropped the new home but have settled instead on a 2-year old home. The seller is now going with a new build, Seddon Homes and has been given the 4-week exchange deadline.

Here again is the problem. My buyer can exchange in 4 weeks. I have a mortgage appointment in a few days which cuts the deadline down to 3 weeks. I am porting my current mortgage. I have been told that it is unlikely that from application to underwriters to survey and offer of mortgage will be more likely after the deadline.

Anyone know if Seddon Homes extend deadlines?
My solicitor says it is unusual for a builder to withdraw if it shows that all people in the chain are working toward an exchange. There is just the buyer below me and the seller above that is purchasing the new home so no long chain.

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #4 on: July 28, 2021, 01:22:15 pm »
No housebuilder would ever sell a house that is subject to a chain if they weren't flexible to some extent.
However, your seller should be able to find the 10% for his exchange independent of who is buying his house.

Bear in mind you will need a home buyer's full structural survey and that will take time too.
OKJ I know the house is 2-years old (with a limited 8-year warranty) but what could have been missed by everyone?
Weak mortar being one thing that would concern me.

Finally, ask yourself why are the owners selling just as the builder's warranty liability is ending?
Are the neighbours OK? Barking dogs? Parking issues? 
It is worth knocking on some doors on a Saturday and having a chat.

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Willis

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #5 on: July 29, 2021, 07:22:34 pm »
The sale is genuine. Three teenage girls fighting over small bedrooms and buying with new partner.

Unfortunately looks like my purchase is not going to happen. The property is subject to a Section 106 and my lender will not lend on the property. Have sought the service of a mortgage broker and they cannot find anyone on the market at the moment willing to lend.

Have asked the sellers estate agent for the name of the sellers lender as that may be an option but they will not ask the lender. Said all questions have to go through solicitors. My solicitor will not start the process unless I can obtain a mortgage.

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Re: Reserving a new home and deposit on exchange of contracts
« Reply #6 on: August 07, 2021, 09:18:52 am »
Sounds like a nightmare. Section 106 agreements should not affect a single home though. Unless perhaps that the builder hasn't complied with it and the home cannot be occupied!
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.