Buying a house
BUYING a new build house is always a daunting prospect and the current challenges brought on by Covid-19 have made it even more challenging. However, the core process remains the same.
In this article, we’ll take you through some of the considerations of buying a new build.
Understanding the Process: You should discuss the property in detail with your estate agent. Current lockdown restrictions will limit your ability to visit showhouses but ask your agent if they are hosting virtual walkthroughs or can show you a video.
A clear inventory list of what is included e.g. appliances and features should also be put together. If in any doubt, discuss with your solicitor.
BER Certificate: The Building Energy Rating (BER) Certificate provides a rating of the energy consumption of the building and lasts for 10 years. Before completion, a provisional BER Certificate will be available and on completion your solicitor will ensure that the final BER Certificate is furnished with the rest of the completion documentation. Many lenders are now offering mortgages with favourable rates for energy efficient houses, which is another reason why you should consider a new build.
Permissions for alteration: Check if there are any “allowances” towards tiling, kitchens, fitted wardrobes etc. This can differ greatly from development to development, as some new builds have restrictions on any such alterations being made to the house. It’s worth comparing if there are a few new developments in the same area at once.
Deposit and contract: You should be clear with the agent on what booking deposit is payable on agreeing the purchase. This will generally be between 3-5% of the purchase price. This payment is refundable if you don’t proceed with the purchase before signing a contract.
Once this deposit is paid, the contract and building agreement should then issue to the purchaser’s solicitor, who will go through all title items in detail.
As solicitor for the purchaser, it is our task to check the terms of the proposed contract and review the title documents carefully. This involves examining for any issues which may affect the type of ownership that you as a buyer will enjoy such as planning issues, rights of way, mapping issues, etc.
Loans: You should arrange for your loan to issue as soon as possible. This can take quite a lot of paperwork so it’s best to get it arranged promptly.
If you’re happy to sign and proceed with the purchase, at this point you also pay over the rest of the deposit amounting to 10% of the contract price or as otherwise agreed. It is only when the contract is counter signed by the vendor and returned to your solicitor that a binding contract comes into existence.
Inspections: As a purchaser of a new house, you should bear in mind that there can then follow a period of some months or even longer when the house is being completed. Lockdown restrictions will also had an impact on construction timelines.
When it is completed, the builder’s solicitor will write to your solicitor giving you 14 days to complete. You then need to engage an Architect/Engineer to inspect the property and draw up a snag list. When the snags have been completed to your satisfaction, the loan can be drawn down and completed.
There are currently strict rules and procedures in places in relation to access to sites therefore you should have your snag organised in time so as to ensure your architect / engineer is given access to the site to carry this out in a timely fashion.
Insurance: At this stage, you must ensure that your life cover and fire cover are in place and that details of same have been forwarded to the bank. In relation to life cover it is helpful to arrange for the terms of the cover to be accepted prior to signing contracts.
On completion, the closing documentation comprising all of the title deeds, the signed deed transferring ownership and the keys are exchanged for the balance of the agreed purchase. The transaction will then complete and you have ownership of the property. The title documents are then stamped and registered and returned to you or your bank.