New Homes speak made easy

Buying a new home clearly differs from purchasing a resale property. So we thought we would give you the low down on some of the seemingly complicated terminology and make it easier to understand. By the end of this article you will have learned all about the industry jargon and hopefully inspire confidence in reserving a new home.

You’re in safe hands with our New Homes. We are National multi award winners holding the prestigious, coveted Negotiator Awards for Land and New Homes. Gold Winners in 2018 and Silver Winners in 2019. Perhaps Gold for 2020 although the coronavirus pandemic scuppered us all and the awards had to be cancelled, however we are confident for another great win in 2021 as we continue to work with the best developers in Northumberland, bringing you our usual signature boutique, bespoke new homes.

So, you’ve found the perfect place and perhaps this is the first new home you have purchased and maybe you’re unsure of the process. Don’t worry, we only work with the very best specialist developers and house builders in the region, offering outstanding luxury homes to the highest standards of quality and architectural integrity. We have extensive knowledge of their developments, from the planning stage, even before the groundworks commence. Our new homes are exclusive to Propology which is why you can be confident. We can hold your hand, if you want us to, right up until you receive the keys to your new front door.

Here are some of the most common property terms and jargon and what they mean for your purchase.

Anti Money Laundering Identification and Proof of Funds

We are registered and supervised with HMRC to comply with Anti Money Laundering Regulations and will ask you to provide various documents and information to comply with our obligations in respect of identification and funds relating to your property purchase before starting the purchase process.

Reservation Fee and document

A payment made to the developer or developers solicitor on behalf of the developer to secure the property. There will be a time limit set for exchange of contracts. At this point the property is taken off the market and you will have made some financial commitment and be expected to be in a position to proceed as not to forfeit the reservation fee because you can not meet the time set for exchange of contracts. This payment forms part of the purchase price.

Memorandum of Sale or Notification of Sale

This document is produced by the selling agent after prospective buyers have complied with Identification and proof of funds as stated above. The memorandum of sale records the buyer and seller have agreed to the transaction. It can also be called a Notification of Sale. It usually records the details of the property address or plot number, the price being paid, the details of the seller and buyer and their respective conveyancers. If there are any conditions to the sale, for example, exchange by a certain date or any enhancements offered by the seller, then this will form part of the Memorandum of Sale. It is not a legally binding document.

Legal Pack or Contract

The legal agreement that sets out the main terms of the sale. For example: price, address, names. Restrictions, if any, management company details and any service charges. Two copies are drawn up, and each party signs one in readiness for the exchange of contracts.

Deposit

The part of the purchase price which the buyer pays on exchange of contracts. The purchase price less the reservation deposit already paid.

Longstop Date for completion after exchange of contracts has taken place

There are usually two dates, a short stop and a long stop. The short stop date will be relayed as an estimated date, this is when the developer expects to have finished the building. The long stop date is the date by which they must have done so.

Defect Liability Period

Following practical completion the builder or developer will remain liable for any defects for a set period of time.

Off-Plan

Purchasing a new build property which has yet to be built.

Building Warranty

All developments have to comply with stringent building standards and are offered with the benefit of structural defects insurance sometimes referred to as a warranty. Most major developers offer the National House Building Council (NHBC) scheme which offers a 10 year Build mark warranty. Other smaller developers may subscribe to similar schemes such as the Premier Guarantee Scheme or LABC warranty. The warranty is designed to cover defects in the property which may arise during the warranty period.

Snagging

This entails the developer identifying and making good minor issues, such as touching up paintwork and adjusting appliances, prior to the buyer moving in.

Service or Estate Management Charge and Management Company

A charge that is made towards the upkeep of a freehold or leasehold property. This typically covers common parts. Prior to completion the service charge for a home will usually be estimated on a shared basis with other properties on the development to cover such items. Following completion Service Charge is collected from freeholders or leaseholders by an appointed managing agent and/or a management company. A Management Company usually is set up where the home owners hold a share in the Management Company and all owners have influence and control of the management of the common parts.

Predicted Energy Assessment

When a new home is designed a target energy rating is produced to show a building inspector that the property will meet requirements under the Building Regulations. The final energy performance of the property must achieve at least this target energy rating to receive its final sign off from the building inspector. When a property is complete a full Energy Performance Certificate will be provided and registered on a National Database.

Completion on Notice or Notice to Complete

Completion on Notice means as a buyer, once the building has been physically completed, you’ll have just 10 days to complete yourself, get your keys and move in, most importantly after paying the balance of your purchase and legal fees. Notice to complete cannot be given unless a building regulations completion certificate or a new homes warranty and insurance certificate, such as an NHBC, have been issued.

Completion Date

Completion of the legal transaction with all funds and documents having been finalised. This is also when you will receive the keys to your new home. When purchasing off-plan the completion date is usually estimated at the point of reservation.

House Warming

Not mandatory, but we recommend you have some sort of celebration to christen your brand new home and toast many happy years ahead.

 

 

 

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