Buying new builds: what to know before signing

A brand-new home tempts. Everything is fresh, nobody lived there before, and you skip someone else’s renovations. But buying new builds does not work like an ordinary home purchase.

You sign long before moving in. Sometimes a year, sometimes three. Meanwhile the building rises, and much can happen. Rates move. Developers can run into trouble. Timelines slip.

That does not mean opting out. It just means knowing what you say yes to. This guide goes through new-build risks step by step, so you know what you sign.

Preliminary and transfer agreements

This matters most to grasp. Buying a new-build tenant-owner apartment, you sign two contracts at different times.

First comes the preliminary agreement (förhandsavtal). You sign it early, often before the building even stands. You commit to buying the flat at a set price. The association commits to granting it to you. With it you pay an advance payment, sometimes called a deposit or booking fee.

Then, when the flat is done and you move in, you sign the transfer agreement (upplåtelseavtal). That contract truly makes you a tenant-owner. Only then do you formally own your apartment.

The point: a preliminary agreement is no finished purchase. It is a promise of a purchase happening later. And between the two contracts sits the whole build time, with everything that can change during it.

Money you tie up early

Signing the preliminary agreement, you pay an advance. Under tenant-owner law it may be at most ten percent of the price. On a pricey flat that can mean serious money tied up long before holding any key.

That is money out of reach during construction. Count it in your planning. And consider what happens if your own situation changes before moving day: a new job, a move, a separation. Leaving a preliminary agreement is hard, and it can cost.

Cooling-off rights are limited. You cannot regret a preliminary agreement any which way, as with ordinary distance purchases. Some situations allow withdrawal, for example heavily delayed moving-in, but normally the contract holds you. Read the withdrawal terms before signing, not after.

Vetting the developer and the association’s finances

You buy not just a flat. You buy into an association, trusting a developer to actually finish building. Both deserve a look beforehand.

Start with the developer. How long around? Have they completed similar projects? A company going bust mid-build is among the worse scenarios, and it happens. Search the name. Look at their previous projects and what buyers there say.

Debt per square metre decides the fee

Then the association’s finances. A new-build tenant-owner association holds a financial plan. It is legally required and must be reviewed by independent certifiers. The plan describes association loans, rates, fees and running costs. Read it. Ask for it if you never got it.

What matters is the plan building on assumptions about the future. Which rate did they calculate with? If the plan starts from a low rate and reality runs higher, the fee rises. And you pay the fee monthly for many years ahead.

A simple ratio says more than most: the association’s debt per square metre. How much loan the association holds, divided by total living area.

High debt per square metre means the association is sensitive to rate rises. When rates go up, fees go up. A flat looking cheap today can cost dearly to live in a few years out, if the association borrows hard.

Also check whether the monthly fee covers amortisation on association loans. If not, the fee can look tempting low now, while the association pushes the problem ahead. Sooner or later loans must be paid down, and then the fee rises.

Construction interest: the cost nobody mentions

During construction the association borrows to pay the build. Interest on those loans is often called construction interest (byggränta), paid by buyers while building runs.

Sometimes construction interest sits in the price. Sometimes it adds separately, appearing as an extra monthly cost before you even moved in. Ask straight out how construction interest works in precisely this project. It can mean thousands of kronor monthly during construction.

The same covers fees during construction at large. Some projects discount fees the first years to look cheap. Ask what the real, full fee becomes when the discount ends. Calculate on that figure, not the teaser.

Delays and price risk

The brochure timeline is a plan, not a promise. Delays are common in new builds. Sometimes months, sometimes longer. Meanwhile you may need to stay in your current home, perhaps with double housing costs if you already sold.

Then the price. You agree a price today and move in maybe three years out. If the housing market falls meanwhile, you can sit with a flat you pay more for than it is worth at moving day.

It turns concrete at moving day. The bank values independently when the loan pays out. If the bank values the flat below contract price, they lend from their lower figure. You must cover the gap yourself with more down payment. Lacking that money, the deal can break, and you can lose your advance payment.

Anything unclear in the contract? Read once more, and ask. Never hesitate taking a lawyer’s help before signing. It costs a fraction of what a bad contract can cost.

Survey and warranty at moving day

New-build homes carry a contractor warranty, often around two years. During that time the developer must fix defects appearing. But the warranty does not cover everything automatically: you must report defects in time and the right way.

Survey properly at moving day. Write down every flaw, however small. Cracks, sloping floors, a kitchen door not closing tight. Everything goes down in writing. What you never document turns hard to get fixed later.

A surveyor who knows new builds is money well spent. That cost is small against later fighting over a defect you cannot prove existed from the start.

Know what you seek before you are pressed

New builds often sell with slick show flats and time-limited offers. It creates urgency. That urgency is part of the selling, not a reason to hurry.

Decide in advance what you actually need: size, location, price, and when you want to move in. Hold to it when the seller presses.

On SökHem you register a buying brief with your criteria. You describe what you look for, and the system seeks sellers for you, even ones never listed openly. Then you can set new builds against existing homes seeing whether paying extra for new pays in that spot. The decision calms with something to compare against.