Newly-built or second-hand houses – what’s the difference?

Buying a newly built or second hand house – what’s the difference?

There are significant differences in the way the purchase of a new or second-hand house is completed and in this post you’ll learn all you need to know about how each procedure takes place.

Newly-built house

As the name suggests, a newly built house is one that hasn’t been occupied before.  You will usually buy it off the plans at a point when it hasn’t been completed.  This means it often forms part of a housing development and you will agree to buy the house on the basis of viewing a showhouse which shows you what your own house will look like.

Second-hand house

This is a house that has been occupied before this sale.  So you don’t buy off the plans but instead have the usual viewing of the property.

So what are the differences between the two?


  Newly-built house Second-hand house
Viewing process Purchase is agreed on the basis of your viewing of the showhouse on the estate.  This will show what your house will ultimately look like. Purchase is agreed on the basis of a normal viewing ie you make an appointment with an estate agent so you can examine the house and see if it suits your requirements.
Documents given to your solicitor A new-build is sold via a Contract for Sale and a Building Agreement.  These are two separate documents which deal with difference aspects of the sale.  The price in the Contract for Sale covers the cost of the site while the price in the Building Agreement covers the construction costs.  When added together, you get the purchase price agreed by you with the vendor. The sale completes via a Contract for Sale alone.  The purchase price contained in the contract represents the entire purchase price.
Stamp duty 1% on the first €1million of the purchase price and 2% on the excess.  If the Building Agreements cost includes VAT at 13.5%, then this sum must be deducted from the building agreement figure as you don’t pay stamp duty in the VAT. 1% on the first €1million of the purchase price and 2% on the excess.
Survey A survey is not carried out on the house as it is usually not built. You are always advised to carry out a survey before you buy a second-hand house so that you can take account of any issues arising with the house eg work required to the work or boiler.
Closing date The sale is completed when the construction of the house has completed.  The builder will tell you that the house is “ready for snagging”.  This means that you can engage an engineer to carry out an inspection and prepare a list called a “snagging list”.  This will include the items that have not been completed.  They might include finishing painting, or installing missing doorhandles.  In general the items on the snag list are very minor and the builder will complete them fairly quickly.  Once this has been done, your engineer will inspect the house again and once they are happy with everything you can notify your solicitor that you are happy for the sale to be completed. Completion takes place at a date agreed between the vendor and purchaser.  No snag list is prepared and the house is bought “as is”.  This makes the survey very important as it is the purchaser’s opportunity to highlight any matters that require work.
Guarantee The builder will usually provide a guarantee that the house has been properly built.  This is given via a company that specialises in these guarantees called a bonded insurer eg Home Bond or Global. The guarantee usually lasts for 10 years. No formal guarantee is given unless the 10-year period in the original document has not expired, in which case it will be passed on to the new purchaser.
Help to Buy This scheme is available for first-time buyers.  There are a number of conditions that must be met but this can be a very useful means of reducing the costs of buying your first home. Help to Buy scheme is not available.



As you can see, there are a number of differences in the purchase of new homes compared to second-hand houses.   Some are applicable in the pre-contract stage while others are only relevant coming up to the closing date.

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