Buying a home is a large investment and the process can feel overwhelming if you don’t know what you’re doing. When purchasing a new-build property, you’ll find the procedure differs from that of traditional homes and that there are different types of incentives available.
If you’re unsure where to start, we’ve got you covered. Here we’ll talk through the whole process, from dealing with delays to organising your finances. In no time, you’ll be able to move into that new build home you’ve always wanted.
Sort out your finances
Like with any home, you’ll need to make sure you can afford it. Try to calculate your financial situation, including the amount you have in savings, any debts you may have and your credit score. All of these factors will determine whether you will be able to get a mortgage or at least one with a reasonable interest rate. It’s best to talk with your lender and see what options are available.
It’s important to consider whether now is the right time to buy a home – you might need to build your credit score or start earning a higher wage should you wish to borrow a higher amount. Bear in mind you are also responsible for maintaining the home, which is a large financial commitment if you have only rented previously.
Choosing the right property
Aim to compare the new-build property you have your eyes on with similar ‘older’ properties in the area. Look at factors like value and space and check the price per square foot. By comparing it to the resale market, you can identify the extent of the premium you will be paying.
When purchasing a new build, you may have the option to buy ‘off plan’ – essentially, this is a home that has not yet been built. The best thing about this opportunity is that you have free reign over how the property will be customised, including the fittings and fixtures. However, it’s best to assume that you won’t be able to move into the property for a while.
Make sure to have a good look around and see if any developers are offering incentives with the purchase of a property, such as free furnishings or no stamp duty. Remember, there’s no harm in trying to negotiate on the price.
Reserving your home
If you’ve finally found the home of your dreams and feel confident that you’ve made the right decision, you’ll likely need to reserve the property. This usually requires a reservation fee that will be deducted from the overall price, should you go ahead with the sale.
The buying process
The process of buying a home can be the most daunting, especially if you don’t have a background in law or finances. In this case, you’ll need to appoint a conveyancing solicitor, who will help with the legal aspects, including the paperwork.
Next, you’ll be tasked with working out your financing. If you’re worried about being approved for a mortgage, there are several schemes available to help you out, particularly if you’re a first-time buyer. Whilst the deposit on a home is usually around 10%, new-build developers may ask for up to 30% and will want proof that your mortgage is guaranteed. Developers may also offer shared ownership schemes, which can be highly useful if you are unable to buy a home outright.
Finally, exchanging contracts is where all your hard work will pay off and everything becomes official. Since you only usually reserve the home for 28 days, this process can occur quite quickly, so it’s important to be well-prepared.
Now it’s time for you to check your property is as advertised and all the appliances work properly; then, you can begin to move all your belongings into your new-build home.