Selling a flat, buying a new-build house - timing?
Discussion
I currently own a flat and am in the process of looking at buying a house. I've found a place I really like the look of, it's new-build (and actually still not quite finished) and I've been to have a look at the location. I got chatting to a couple of residents who were out walking dogs and was able to ask their honest opinions of the estate, the housebuilder, the quality of the builds, whether they'd had snagging issues etc. All were overwhelmingly positive and said they had no regrets, they'd do the same if given the same choice again which bodes extremely well. Ironically I'd been against new-build but compared with what else is on offer locally - and at higher prices - the new place actually stacks up rather well.
I'll need to sell my flat with the equity forming the deposit for the new place but I can't quite see how to make things work timing-wise? It seems risky to try to line up a buyer for mine when the place I want isn't even complete yet (and could slip) and I could end up in a scenario where the new place is built and I have to complete on it but I haven't sold my place/sale fell through etc...
The only option I can see is to sell the flat asap and park the equity whilst renting somewhere (I don't have any other option such as a parental home etc) which would bring with it extra (potentially unnecessary) costs and a load more stress. Even a 6-month rental would probably be more than required.
Am I missing something obvious or is it actually really this much of a potential minefield/nightmare trying to make such a move work cash-flow and timing-wise?
I'll need to sell my flat with the equity forming the deposit for the new place but I can't quite see how to make things work timing-wise? It seems risky to try to line up a buyer for mine when the place I want isn't even complete yet (and could slip) and I could end up in a scenario where the new place is built and I have to complete on it but I haven't sold my place/sale fell through etc...
The only option I can see is to sell the flat asap and park the equity whilst renting somewhere (I don't have any other option such as a parental home etc) which would bring with it extra (potentially unnecessary) costs and a load more stress. Even a 6-month rental would probably be more than required.
Am I missing something obvious or is it actually really this much of a potential minefield/nightmare trying to make such a move work cash-flow and timing-wise?
You need to sell to a first time buyer who's not in a rush to move!
I've not done the move to a new build but I know people who have and if you're moving as part of a chain then it does require flexibility from the rest of the chain that's for sure.
Logistically speaking selling first and renting is easier but more expensive. Finding a rental for the right time period is often not easy (and there are rental costs!) and you may have to terminate your existing mortgage which again has a cost.
I've not done the move to a new build but I know people who have and if you're moving as part of a chain then it does require flexibility from the rest of the chain that's for sure.
Logistically speaking selling first and renting is easier but more expensive. Finding a rental for the right time period is often not easy (and there are rental costs!) and you may have to terminate your existing mortgage which again has a cost.
On the other hand, new house builder can be quite flexible on entry dates. they won't insist you move in the moment they are complete, and can easily give weeks of leeway which would assist you. As long as they have a sale in their books and an approximate date they are happy. Of course they need to give you a reliable quide to rediness but generally it works ok. Any chain will likely need a bit of give and take.
Depending on the size of the new build development / developer it may be possible to do some form of partex deal depending on I’m sure lots of other things.
Our last but one house we did just this with a contract that guaranteed a rebate on the partex value should he be able to sell it for more than we agreed as the partex value.
We got something like 5/8ths of any surplus profit.
Our last but one house we did just this with a contract that guaranteed a rebate on the partex value should he be able to sell it for more than we agreed as the partex value.
We got something like 5/8ths of any surplus profit.
abzmike said:
On the other hand, new house builder can be quite flexible on entry dates. they won't insist you move in the moment they are complete, and can easily give weeks of leeway which would assist you. As long as they have a sale in their books and an approximate date they are happy.
That was not my experience of their contract on the occasion I bought a new build. Quite a short period to complete after notification of readiness.We part-exed the one we were selling, took quite a small hit on it but had got quite a large discount on the one we were buying (last one on the development, most expensive, had two sales fall through). It is possible that the discount drove the desire to complete.
Tbh, moving into rental isn't likely to be an option in many places. There are so many potential tenants, why choose one who is going to vanish quickly? More likely to be successful getting a long let on a holiday property.
It can take 3 months just to find a buyer for your place and be ready to exchange, so I wouldn't worry.
The developer usually won't accept a reservation until you have a buyer and any diligent buyer would make their offer in the knowledge of what your onward situation is, so they'd be aware of the broad timescales involved and would plan for it.
The developer usually won't accept a reservation until you have a buyer and any diligent buyer would make their offer in the knowledge of what your onward situation is, so they'd be aware of the broad timescales involved and would plan for it.
Thanks for all the comments, some food for thought. I'll investigate whether PX is an option - it might be worth taking a small hit on the price as a trade-off for the convenience. I'd also rather not have to sell up first if possible - I guess I'll need to ask the developer what would happen in 'x' scenario etc (eg. buyer drops out at last minute or whatever).
Yes sell to a first time buyer who is willing to wait, a new build developer will want to exchange in 6 weeks and it WILL not ever happen!
If the chain survives once you’ve exchanged you’ve got nothing to worry about if it slips
If you lose your buyer then you’ll lose the reservation on the new house usually after a month, but as the markets slow tjar might be a issue
How far off is it? Usually takes 6 months from slab to moving in, if it’s nearly done, I can’t believe that any convayincing on your flat would be done in time.
You won’t be able to reserve the new build until you’ve got a buyer either.
Expect to get 5% in incentives from the builder, or something like estate agent fees paid
If it’s a volume builder see what schemes they’ve got like part exchange or smooth move where they pay the fees or take it off the market for a period of time, although most of them will only accept a flat if it’s got a ESW1 from in place (or isn’t in a big block)
Don’t forget lots of new builds need 15% deposit but lender dependant.
You’ll be pushed to exchange in 6 weeks which won’t happen, then you’ll exchange, next you’ll be servved 2 weeks notice to complete and then complete
I sold my flat using a smooth move with David Wilson, it still went wrong, we didn’t exchange and the buyer threatened to pull out if we hadn’t completed at a certain time, we ended up moving out of that flat and living with my parents for 3 weeks while they finished my new build.
then we tired to sell that new build in 2023, sold on the first viewing, reserved our new build, on the day we paid for the extras (2k) our buyer decided to pull out the day before exchange, right at the start of the summer holidays, not a peep for 6 weeks, the new build we where buying pulled the plug and we lost the 2k extras and solicitors fees.
Been trying to sell it on and off since and the market is so slow.
If the chain survives once you’ve exchanged you’ve got nothing to worry about if it slips
If you lose your buyer then you’ll lose the reservation on the new house usually after a month, but as the markets slow tjar might be a issue
How far off is it? Usually takes 6 months from slab to moving in, if it’s nearly done, I can’t believe that any convayincing on your flat would be done in time.
You won’t be able to reserve the new build until you’ve got a buyer either.
Expect to get 5% in incentives from the builder, or something like estate agent fees paid
If it’s a volume builder see what schemes they’ve got like part exchange or smooth move where they pay the fees or take it off the market for a period of time, although most of them will only accept a flat if it’s got a ESW1 from in place (or isn’t in a big block)
Don’t forget lots of new builds need 15% deposit but lender dependant.
You’ll be pushed to exchange in 6 weeks which won’t happen, then you’ll exchange, next you’ll be servved 2 weeks notice to complete and then complete
I sold my flat using a smooth move with David Wilson, it still went wrong, we didn’t exchange and the buyer threatened to pull out if we hadn’t completed at a certain time, we ended up moving out of that flat and living with my parents for 3 weeks while they finished my new build.
then we tired to sell that new build in 2023, sold on the first viewing, reserved our new build, on the day we paid for the extras (2k) our buyer decided to pull out the day before exchange, right at the start of the summer holidays, not a peep for 6 weeks, the new build we where buying pulled the plug and we lost the 2k extras and solicitors fees.
Been trying to sell it on and off since and the market is so slow.
Edited by Quattr04. on Wednesday 15th January 21:56
Edited by Quattr04. on Wednesday 15th January 22:00
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