Buying a New House
Buying a house could be buying a new home-and-land package from a developer, or purchasing a plot of land preconditioned to build a house with a builder appointed by the property developer.
First, when you buy a finished home-and-land package from a developer, you know exactly what you are buying. You know how big the rooms are, how much light the house gets in, and what the view looks like. In some cases, the developer may not start building the house until after the contract is signed, but the building plan is pre-drawn and you have no flexibility in altering it.
Generally speaking, the benefit of buying a newly built house from a developer is being able to acquire a house and land cheaper than you would when buying them separately. Economy of scale is in play when a developer builds multiple houses on a development site all at once, which will bring the construction costs down making them more affordable. In addition, a developer is likely to plan housing development projects in favorable locations which means the property may have locational advantages in some respects.
On the other hand, the downside of buying a newly built house is, you are unable to change the plan or the design. If you are buying a pre-built house, you may not have the opportunity to see the house being built and know if corners have been cut. Plus, new homes in recent years tend to be built on smaller lots, look identical to one another, and positioned very close together.
When you buy a newly built house from a property developer, it will come with a 10-year major structural defect warranty, and the warranty is given towards the foundation, exterior walls, roof, pillars, beams, and so on. The builder either takes out a latent defect insurance which will keep their warranty effective even if they go out of business during the warranty period, or deposit money into a third-party institution which maintains a pool of money for repairing latent defects detected in the future. Developers are also liable for latent defects of the interior sections of the house for 1 to 2 years or more, such as those in walls, floors, fittings, equipment, and so on, though each developer has its own warranty period and waiver conditions.
Next, if you plan to buy a plot of land from a property developer and build a house on it, you can choose your house design and materials from the available options. After first signing the purchase contract for the lot, you would normally have 3 months to come up with a mutually agreed plan with your property developer before signing the building (construction) contract; otherwise, both parties will have the ability to cancel the contract without paying the other a penalty for breach of contract.
However, in contrary to this normal process, many a time the developer will set up the land and building contracts to be signed concurrently, which prevents you from cancelling without paying a penalty. The developer in the majority of cases will have the upper hand, and it is not unusual for them to drive things in a way advantageous to them. Therefore, buyers should be watchful of this type of aggressive developers.