The procedure when buying off-plan
Reservation fee
You will need to pay a non-refundable reservation fee of between £1,000 and £2,000.
Insurance
Before paying your reservation fee, ensure that the developer is NHBC or registered with Zurich. This means that they are insured against lost deposits and will have to build to certain standards before the development is signed off. You will be safe in the knowledge that you will have ‘snagging’ and structural guarantees.
Solicitors
Make sure you use a solicitor you have confidence in and trust. Developers often have a preferred solicitor who may be able to offer you discounted legal fees.
Exchange
This generally takes place within 28 days. You will lose your deposit if you fail to exchange.
Completion
A completion date will be set, but this is a target time and is likely to change even though the developer wants to keep to this date as much as you do!
Hand-over
You will be notified two weeks before completion is due to take place. If this is not convenient there’s not much you can do – if the developer wants to complete and the property has been signed off by the NHBC (if covered by them) you won’t have much choice.
Stamp Duty
This is payable on completion, as with all property purchases.
Snagging
Snagging is a thorough inspection carried out on a property to ensure the builders have completed their work to the required standard. Although the property is new, it could still have many faults and it’s up to the developer to put these right within a two-year period of the completion date.