Buying a new home

New home or old home – which is better?

A new property with glossy surfaces and modern solutions may seem attractive, but is it always the best choice? Buying a home is one of life’s biggest financial decisions, and the choice between a new home and an old one will affect both your wallet and your everyday life for a long time. Let’s take a closer look at the strengths and challenges of both options and what buying a new home means in practice.

Buying a new home – what you need to know before you sign the deed

The main attraction of a new property is often its condition. Everything is new, under warranty and meets today’s housing requirements, from energy efficiency to soundproofing. In a new build, you often get to influence the choice of materials and floor plan, making your home exactly the way you want it.

The benefits of a new home:

• Everything is new and under warranty – no immediate future renovations
• Modern energy efficiency reduces housing costs
• Possibility to influence materials and solutions
• Long warranty period (10 years for structural defects)
• Compliant with current building regulations

The challenges of a new site:

• Higher price per square metre
• Risk of delays in a site under construction
• No possibility to see the finished dwelling in advance
• The surrounding area may still be undeveloped
• Possible initial problems with the new build

An old home, on the other hand, often offers better value for money. The price is lower, and you get what you see – no surprises on the bottom line. In addition, older homes are often located in well-established areas, where services and transport links are readily available.

The benefits of an old home:

• Lower price per square metre
• See exactly what you’re buying
• Often better locations in established areas
• Possible negotiating margin in the price
• Ready to move in immediately

The challenges of an old home:

• Potential repair debts and maintenance needs
• Older energy efficiency
• Basic solutions may not meet current needs
• Shorter warranty period or no warranty at all

The process of buying a new home – here’s how it works

Buying a new home is very different from buying a completed home. The process is longer and involves several steps, with each party having its own rights and obligations.

1. Booking and signing the deed
The process usually starts with booking the home during the pre-marketing phase. The reservation is not yet binding on the buyer, who can cancel the reservation for no particular reason. The buyer will also receive a refund of any deposit paid. Once the pre-marketing is completed, the RS requirements are met and the construction phase begins, the buyer signs a legally binding contract.

2. Monitoring of construction
During construction, you have the right to monitor the progress of the work and participate in inspections. The builder will keep you regularly informed about the progress of the project.

3. Handover inspection
Before moving in, a handover inspection is carried out to check the condition of the property and any deficiencies. At this stage, you can make any comments that need to be corrected before handover.

4. Final payment and handover
Once the apartment is ready and approved at the inspection, you pay the balance in the agreed instalments (by post) and receive the keys.

Rights and obligations of the buyer

As a new home buyer, you have special rights, which are enshrined in law. The most important of these is the right to a guarantee – the builder is liable for defects and deficiencies long after delivery.

Buyer’s rights:

• Get the apartment in the agreed condition and on time
• Participate in reviews and monitor the progress of work
• Get compensation for the costs of the delay
• Cancel the transaction if the dwelling deviates substantially from the agreed price

Obligations of the buyer:

• Pay the agreed instalments on time
• Participate in inspections and report any shortcomings found
• Complain about faults within the deadline
• Taking care of the home after handover

Builder’s liability and the RS system

The RS system (Chapter 2 of the Housing Act) ensures that the pre-sold property is built according to the plans. It is mandatory when a residential property is offered for sale at the construction stage. The construction phase lasts until the building control authority has approved all the company’s buildings for occupation. It has been developed as a safeguard for those who enter into a binding sale of the property at the construction stage.

Responsibilities and obligations of the builder under the RS law:

• Build the dwelling as agreed and according to good building practice
• Liability under the Housing Act for defects found during the annual inspection ( 12-15 months after commissioning)
• Obtain a performance guarantee ( Housing Act, Chapter 2, Section 19), which lasts for 10 years from the date of occupation and covers defects that would be essentially the responsibility of the contractor to correct.
• Submit security documents showing that the developer has the necessary collateral to the bank before the sale starts
• Hand over the dwelling within the agreed period
• Be responsible for defects and deficiencies during the warranty period
• Provide sufficient guarantees to secure the buyer’s payments

In practice, the RS procedure means that the builder must provide a guarantee for the instalments paid by the buyer. This protects the buyer in the event of the builder going bankrupt in the middle of the project (performance insurance). The guarantee is valid for the entire construction period and the warranty period.

The builder is also obliged to report all transactions in new buildings to the Housing Information System (HIS). This is part of the buyer’s protection and ensures that the transaction and ownership are officially registered.
Remember that OUN® will check the housing company’s documents for you!

Guarantees and security measures

Buying a new home always involves risk – what if the builder can’t finish the home as agreed? A number of safeguards have been developed to deal with this.

Security during the construction phase and security after the construction phase ( Housing Act, Chapter 2, Section 17). The deposit covers the instalments paid by the buyer until the dwelling is handed over. The guarantee is usually provided by a bank or insurance company and is granted after a check on the financial situation of the builder.

A construction guarantee protects the construction work against unexpected damage such as fire or vandalism. This insurance is the responsibility of the builder.

A post-construction guarantee, on the other hand, protects the warranty period – if the builder is unable to repair any defects that occur during the warranty period, the guarantee will cover the repair costs for the buyer.

When should you choose a new home?

A new home is a good choice when you want a modern, energy-efficient home with everything under warranty. It’s particularly suitable for situations where your budget can handle a higher price tag and you can wait until construction is complete.

Remember, however, that buying a new home requires active monitoring and involvement in the process. Always check the builder’s references, financial situation and make sure all collateral is in order before you close the deal.

Thinking of buying a new property?

A deed to a new property is one of the biggest contracts of your life. Before you sign, it’s worth knowing exactly what’s in the documents – and what’s missing.

OUN® will read the new site documents for you and deliver a plain-language analysis within 24 hours. We are 100% on your side – we don’t sell the property to anyone.