we want to buy a new build and have some questions?

Question

We have seen a new house we would like to buy and the builders want £500 to reserve a plot then 10% of the total 5 weeks later (£24000). Is this normal procedure? If the sale on our existing house hasn't gone through by then, how would be the best way to raise the capital? What recommendations would people have about where to live between seling our current home and our new one being finished?

Thanks!

Answer 1

I guess it depends on the demand in your area == for example, if it's Central London, a house for £240,500 seems a good bargain & so I guess the builder can get away with his demands ..

To finance it you will have to get a Mortgage on it .. problem is (of course) that the Mortgage Company is going to want to see some work done first :-)

I assume you would be buying 'off plan' (and that the planning permission has already be granted ?) .. even so, I would not expect your first payment to be made untill the foundations have been built .. but as I say, if the demand is there, then they can get away with it ...

What's always a problem is that once a builder has some of your money, the pressure to do work on your property evaporates .. and new builds are notorious for running over schedule ..

If you sell up your existing house to provide the finance, you will need to consider where you are going to live for the year or two it takes to complete the build ..

Answer 2

24000 seems like an awful lot to be paying a builder.....I presume its one of the national builders well able to afford to have less of a deposit?...I would try and get the buyer of your house to have as late entry date as possible, if unable the possibly taking a short term rent/lease or stay with a relative and put your stuff into storage. best of luck!