Top tips for a stress-free new build contract exchange

Buying and moving home is regularly cited as one of the most stressful life experiences. Buying a home is a complex and often lengthy process, and it can feel like you have limited control over timescales. The new build purchase process is often more clearly defined and predictable, but brings its own challenges, particularly around the speed of exchange of contracts. 

This stress-awareness month, we’re sharing some top tips to help make your new build contract exchange as smooth as possible.

What makes exchange of contracts stressful?

Exchange of contracts is your formal commitment to proceed with the purchase of your new home. You will be expected to pay a deposit – typically 10% of the sale price – which in most cases you won’t get back if you decide not to proceed*. 

Before exchanging contracts, your solicitor or licenced conveyancer should have reviewed the contract and associated information pack from the developer, and the new build warranty cover. Land searches should ideally be completed to check for any legal, financial or planning restrictions or expected works that may affect your property.

While most of this is also true for second hand homes, the difference is speed. Home builders typically want to move from reservation to exchange within 28 days. This quick turnaround can make the process feel more stressful which is why it’s important to know what to expect and how to prepare. Here are our top tips to get you off to a good start:

• Get the right support: Appoint an experienced solicitor or licensed conveyancer who is used to dealing with new builds. They are more likely to understand the types of time pressures and processes involved. Ensure your chosen professional adviser is knowledgeable in and willing to support your particular type of property purchase, especially if it’s leasehold. And remember to check their availability – being accessible can be as important as being experienced when it comes to a speedy exchange. 

• Understand your reservation agreement: It’s easy to overlook the details in the excitement of reserving your new home, but your reservation agreement contains important information. Typically, the agreement will include your responsibilities as well as your builder’s, including any time commitments for exchange and/or penalties for delays.

• Organise your funding: Make sure you have all the necessary documentation in place in good time to demonstrate how the purchase will be funded. If you will be using a mortgage to buy the property, your professional adviser may recommend you have an offer in place by exchange, even if you have to extend it ahead of completion to ensure it remains valid.

• Use the Consumer Code Scheme to plan ahead: Read the pre-contract requirements and guidance set out in our Consumer Code Requirements with Builder Guidance. This will help you understand what information to expect and chase anything that may be missing.

• Keep in regular contact with your builder: This will reassure your builder that you’re making progress with the paperwork and doing all you can to meet the exchange deadline. If you are concerned the deadline might not be met, raise this early on to try and reach a solution. 

• Keep on top of your professional adviser: Make sure they are responding promptly to any requests and chasing any information they may be relying on others for. 

• Download our free resources: Our New Home Buyers Pack is a free guide to help you plan for your new build purchase, including questions to ask your builder. We also publish regular articles on our blog covering topics such as what consumer protection is available; what home warranties cover; and questions to ask about gardens, boundaries and garages.  

These tips can help you stay on track ahead of exchange, but the most important thing is to find a professional adviser you trust, with the expertise and availability to help you. Your builder may recommend a professional adviser which can save time if they are already familiar with the development, but you are free to choose your own. For more tips on choosing a professional adviser, read our spotlight interview with the team from Conveyancing Matters on getting the legalities of your purchase right. 

*Under the Consumer Code for Home Builders, you may be able to terminate your agreement and receive a refund of your deposit if the builder makes a major change to the property without your agreement, or completion is unreasonably delayed beyond the long stop date in your Contract of Sale.