The Process Of Buying A New Home
1. YOUR RESERVATION FEE
Your reservation fee, along with your solicitor details and identification, reserves your new home for a period of 21 days (unless otherwise advised). Thereafter you will be expected to conclude a missive. If you have not concluded missives by the required deadline, your reservation will expire.
On conclusion of missives, a further payment will be required (see Concluding a Missive below).
During this period from reservation to settlement, your home will be withdrawn from sale and it will not be subject to any price increases. The reservation fee and the further payment on missive form part of the deposit on your new home and will be deducted from the purchase price at settlement.
The sales adviser will explain your cancellation rights to you.
2. FINDING A SOLICITOR
The solicitor’s role is to ensure a smooth transfer of the property and the fixtures and fittings agreed in the sale. This process is called conveyancing.
Often the best way of choosing a solicitor is to ask friends or relatives for recommendations. However, your sales adviser can provide a list of local solicitors to assist you in this process, although please note that we are not able to make specific recommendations.
Before you instruct a solicitor to act on your behalf, we recommend that you ask for a written estimate of all fees (including VAT) and details of all outlays payable, such as Local Authority searches, Land Registry fees and Stamp Duty Land Tax, so that you may budget accordingly.
Local Authority Search Fees
This search will establish if your new home is likely to be affected by any Planning decisions or other proposals.
Land Registry Fees
This fee is to register ownership of your property with the Land Registry. The fees are fixed by the Government.
Stamp Duty LandTax
Stamp Duty Land Tax is payable on all homes with a purchase price over £125,000. The amount you will have to pay is based upon the purchase price of your home. Currently the scale charges are as follows:
£0 - £125,000 = No SDLT
£125,001 - £250,000 = 1%
£250,001 - £500,000 = 3%
£500,001 and above = 4%
There are exemptions from this tax in certain areas and the sales adviser will be able to advise you if there is an exemption in your development area. From time to time the Government may also introduce Stamp Duty Land Tax relief periods for first time buyers or for properties within a selected price category. Please ask your sales adviser for current details.
3. FINDING A MORTGAGE
There are many different types of mortgages available from a wide variety of lenders, including banks and building societies.
All financial representatives are required to provide best advice in relation to your loan. They operate within the terms of the Financial Services Act (FSA), whether independent or tied to a particular lender.
If you are unsure of how to seek financial advice, your sales adviser can assist you in engaging an independent financial adviser or mortgage broker.
Prior to making a mortgage offer, your lender will have the property valued for mortgage purposes. Your lender may charge you for this service and you should check this with the lender or intermediary.
4. CONCLUDING A MISSIVE
Your solicitor will arrange for you to sign the copy of the missive. At this time you are usually required to pay a further deposit.
Once missives are concluded the transaction becomes legally binding.
Settlement is the actual day when you become the legal owner of your new home.
At this time, the purchase price will be transferred to Cruden Homes’ solicitor and your solicitor will receive the Title Deeds to your new property. After completion of the registration procedure, the Title Deeds will be forwarded to your mortgage lender.
Your new home is insured by Cruden Homes until the day of settlement. From then on you are responsible for the insurance of both the building and its contents. However, if you have arranged with us to put any items into your new home prior to legal completion you will be responsible for insuring them.
Your mortgage lender will insist on building insurance. They may recommend an insurance company but you should also be able to shop around for the best deals. Please check with your lender as to the type and amount of cover required. If you have purchased a flat, it is likely that the block building insurance will be administered through your factor and payable as part of your regular management charges.
It is your choice as to whether or not to insure your contents, but we strongly recommend that you do so. You should be aware that there are risks involved in not insuring your contents as ultimately you will be unable to obtain compensation from your insurer in the event that they are stolen, damaged or destroyed. For the avoidance of doubt, contents are not covered by a building insurance policy.