Buying a new build home in plain English.
Here's a brief glossary of words and phrases used by the builders, estate agents and solicitors as you navigate your exciting 'new build' purchase.
Completion of the legal transaction with all monies and documents having been distributed. This is also when the developer’s solicitor will instruct the estate agent to release the keys. There is usually a “long stop” date by which they must have completed all works.
The agreement sets out the main terms that have been agreed – for example, price, address and names. Two copies are drawn up, and each party signs one in readiness for the exchange of contracts.
The part of the purchase price which the buyer pays on an exchange of contracts. Usually 10% on standard purchases and 5% on Help to Buy purchases.
Not to be confused with your 'reservation fee', you may have been asked to pay a fee to reserve your plot or unit at the initial stages of enquiry and purchase.
The swapping of signed contracts by the solicitors (together with the buyer’s deposit). After this, the contract is legally binding, from which neither party can withdraw without financial penalties.
Energy Performance Certificate; this contains information on energy use, energy performance, carbon dioxide emissions, and fuel bills.
Your insurance requirements will be different depending on whether you intend to live in the property or let it. You must ensure that your insurance provides sufficient cover for your new property as part of your mortgage agreement. If you’re letting your property you will require specialist landlord insurance.
The Government department that records who owns what land, and under what conditions.
A longstop date is the date works should be completed. If a developer fails to finish the property by this date, you may be entitled to withdraw your offer to buy the property without penalty.
This document records the fact that both the buyer and developer have agreed to the transaction. It can also be called a Notification of Sale. It usually records the details of the price being paid, the details of the developer and buyer and their respective lawyers.
If there are any conditions to the sale (e.g. exchange by a specific date) then this will form part of the Memorandum of Sale.
A formal written offer made by a bank or building society to lend an approved amount to purchase a property. Needed for exchange of contract if buying with a mortgage.
After you sign and exchange contracts with the developer, your solicitor will receive a Notice to Complete, which will give you the date that you must complete the purchase by, typically 10 working days. If you’re buying your new home “off-plan” and the building is yet to be completed, the time between exchange and notice to complete being issued may be significant. It is important to be aware of the timescales and plan your accommodation to allow for this. In particular, we advise that you do not give notice on rented accommodation until you are certain of a completion date for your new home, and you have liaised with your solicitor.
Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.
Deposit paid when reserving your property off-plan.
Checks of local authorities and utility provider records for planning applications, restrictions and issues.
A tax, paid by the buyer, that is calculated on the percentage rate applicable to each portion of the sale price. Click here for our handy Stamp Duty calculator.
An inspection made by a qualified surveyor. There are three main types of survey: Valuation Report (for mortgage purposes), Homebuyers Report (also comments on general condition) and Full Structural Survey (examines structural detail). The two latter surveys are not necessarily required on new build properties. These are carried out at the buyer’s discretion.
Legal documents that prove ownership of land/buildings, and the terms on which they are owned.
We hope this article was useful, if you would like to discuss anything our New Homes team will be happy to help.
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