With more buyers opting for new properties, developers are moving to fill the gaps in the market as evidenced by the huge number of newly built projects listed on our website.
In recent years, buyers have shown a strong preference for newly built projects and this trend looks set to continue.
It’s important that you learn the difference between the two as buying a newly built property is completely different from buying an existing property. Let us shed some insight on the difference. Arming yourself with the right information before you even start looking at house designs will make buying your home a whole lot easier and far less stressful.
Financials
What is the difference between costs-to-buyer and free to name?
If you are looking to purchase a home, the asking price of houses usually shows whether the sale is based on costs buyer (k.k.) or free to name (v.o.n.). If you buy a home at buyer’s cost, you as the buyer will pay all additional costs. If you buy a home freely in your name, then the seller will pay these costs. Which costs fall under the costs buyer or free on name, differs per situation. Part of these costs are, just like the mortgage interest, tax deductible.
Existing built
Costs purchaser (k.k.) : buying an existing property is usually on a cost-buyer basis. Officially this means that the buyer has to pay the transfer tax, transfer of title in the kadaster, the mortgage and notary cost. Transfer tax is the tax you pay when you officially take over a house or land. The total cost of k.k. is 2- 5 % of the purchase price.
In the deed of transfer, the previous owner officially transfers the property and in the mortgage deed, the mortgage is made final. A notary draws up these deeds and registers them in the Land Registry. Depending on the purchase price and the notary you choose, you pay approx. € 800 to € 1.600 for these deeds combined.
Nowadays you can only mortgage 100% of the value of a home. Assuming that the market value is equal to the purchase price, you cannot co-finance the additional costs in your mortgage. These cost will be payable directly from your savings.
Newly built
Free on name (V.O.N.) : Free to name means that the additional costs for transfer of title are already included in the purchase price or that the seller pays the costs. The additional costs are already included in the price. Think of notary, transfer tax etc.
A newly built home v.o.n. will usually come with standard facilities. If you are wanting to upgrade features or if you want to change the standard plan, costs will be charged for extra work. You can finance this extra work in your mortgage, because all costs count towards the value of the new home.
Warranty
Buying a newly built home may feel uncertain as in a lot of countries there is no guarantee that a project will be brought to completion. In the Netherlands newly built projects will be insured under the SWK of woningborg guarantee. Covering the buyer for delivery and quality.
The guarantee is the contractors official promise to the buyer that the home complies with certain guarantee standards laid down in the SWK Guarantee and Guarantee Regulations. These guarantee standards mean that the Entrepreneur guarantees the following to the buyer:
- The home complies with the Buildings Decree requirements;
- The home meets the requirement of good and sound work;
- The house has the agreed layout.
The guarantee standards also apply to the additional work reported to SWK.
Contract inclusions
Things that are included in the contracts are the maximum construction time, a financing reservation that specifies the period in which the buyer can arrange their mortgage, a reflection period of one week and various guarantees. Almost all new houses in the Netherlands are covered by a guarantee that gives the buyer certainty about the quality of their future home.
Included in the purchase agreement is the price that you will pay for the land, and the price for building the house. Payment for the building process will occur in installments.
Delivery of the house
Newly built houses are delivered as shells, or with basic equipment such as a bathroom and sanitary facilities. The type of basic equipment that is included, depends on the project. A technical description details how the house is built and what is included. All additional options are listed in a so-called change order list.
When the home is almost finished, the buyer gets the opportunity to see if everything meets the agreements that have been made and recorded. At the final delivery, when the buyer receives the keys, a delivery inspection takes place, which is linked to the guarantee scheme. An independent consultancy can be called in for this. From that moment on, you can start decorating and living in your house.
Tips and tricks
Double check on ‘bouw en grondrente’:
When you buy a new home, the contractor has often already bought the land. Because he has ‘advanced’ the costs, he may pass on the interest to you. This will be in combination with the construction or land interest. When buying the home, the contractor determines the percentage of the construction interest.
Be mindful as you will very likely to come across some terms you hadn’t heard before and you should never be afraid to ask what they mean. A purchase/buyer’s agent is a great source of knowledge and will be of value to you during this process.
Be sure to check with your real estate agent exactly what is included in the purchase price, including all the fittings and finishes. Check if you are able to upgrade items such as tilework or kitchen appliances to your liking.
Can you change the layout or move walls? Add features?
Compare the inclusions thoroughly because it will impact on your overall cost and be aware of any hidden costs.
A fixed-price contract allows for full transparency but, otherwise, seek additional costs upfront to avoid any unpleasant surprises.
Do you want advice? Please contact us to arrange a meeting, we would love to be of service!
