Yorkshire law firm’s warning over new home sales

Having a solicitor to guide you through the conveyancing process, from reserving your home to getting the keys, is vital. Khal Shahjahan, who leads the New Build conveyancing department at Harrogate-based Berwins Solicitors, says unwitting buyers could risk losing money by not knowing the six crucial steps.

1. Find a good solicitor

According to the HomeOwners Alliance, your first step should be to find an experienced conveyancing solicitor to oversee your purchase.

"It's easy to think that buying a new home is more straightforward but actually, there is more that can go wrong than a conventional purchase. Whether that's the property not meeting planning standards, or a lack of definition about who is responsible for maintaining common areas, there are a number of factors to watch out for" explains Khal. "At Berwins, we can help make sure your deposit is protected, that the builders agree to complete the property by a certain date and that the contract works for you.”

2. Secure your home

Some developers ask for reservation fees of at least £500 when an offer is made, to begin the legal process – this sum will be taken off the final purchase price, but it is non-refundable if you pull out, so make sure your mortgage is agreed in principle before handing over the cash.

"Once you do, you should receive a reservation agreement which lays out exactly what is included in your purchase price, as well as any future management fees or service charges," says Khal. "It's best to have already done your homework so make sure you see all the specification details for the build to know exactly what you're getting – and be aware of what's included in the price, like appliances or stamp duty costs."

3. Pay the deposit

When you exchange contracts, the buyer should pay the developer's solicitor a deposit of between 10 and 30 per cent of the total price; you'll also be asked to sign a contract agreeing to buy the property at the current advertised rate.

"This is where problems can arise," Khal adds. "If property prices fall between the time when the mortgage lender has valued the property at the start of construction and when the home is completed, you might not be able to get your mortgage and you could even forfeit your deposit. We would urge buyers to establish at this stage what will happen if prices rise or fall before completion."

4. Do the research

Conveyancing solicitors will do the legwork when it comes to searches before the final purchase, including checking that appropriate planning permission has been granted, and that the building complies with regulations; checking if the property is freehold or leasehold; and any restrictions or charges included in the lease, like building an extension.

5. Look for snags

"I would also recommend that buyers have a snagging provision written into their contracts," advises Khal, “this is a means of listing any defects to pass to the builder to repair them. "It's a good idea to carry out a snagging survey before making the final payment, so any issues have to be addressed by the developer, though bear in mind that they are still responsible for any issues in the first two years."

6. Taking the keys

Once the new house is finished, your solicitor will arrange the official handover of the keys and any logbooks or owner manuals. "Don't forget to get the guarantees for anything relating to the property, from the cooker to the boiler; the windows to the roof," he adds.

For help and advice on residential property conveyancing, call Khal on 01423 543126 or visit the Berwins website.