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Six key tips to survive the bidding war when buying a house in Norway

Thinking of getting on the property ladder in Norway? If you are, you've probably heard about the dreaded bidding process. Here are some tips for easing the stress and securing your dream home.

Apartments in Oslo.
This our our picks for minimising the stress of Norway's house bidding process. Pictured are apartments in Oslo.This our our picks for minimising the stress of Norway's house bidding process. Pictured are apartments in Oslo. Photo by Marla Prusik on Unsplash.

Buying a house in Norway can be a daunting process if you are not familiar with the housing market.

Funnily enough, if you are familiar with the steps you need to take to get on the property ladder, then you may be more daunted, as you would’ve heard of the bidding stage, which even locals can find a challenge at the best of times. 

With the help of real estate agent Trine Dahl-Pettersen at Eiendom 1, these are our tips for surviving the bidding war and emerging on the other side (relatively) unscathed. 

Ensure you have financing in place

Before you can bid on a property, you need to visit the bank to ensure financing for your purchase. This will make the process a lot easier when you do find your dream home and are in a rush to get your bid accepted, as your real estate agent always checks with the bank if financing is in order before accepting a bid. Once confirmed, the process can move to the next level. 

If you do not have all the money sitting in your bank account, your bank can also vouch for a mortgage, allowing you to purchase a home up to a set price. If your bid is in line with that figure, the proposal will be sent to the seller. 

“Banks are used to the process and tend to work quite quickly if they are informed about your plans beforehand,” Dahl-Pettersen told The Local. 

READ MORE: How easy is it to get a mortgage in Norway as a foreign resident?

According to her, the industry standard for the verification process of financing takes about 30 minutes. In a way, this screening process serves as a safety barrier for the customer, as your bank has to confirm your bids are acceptable and can save you from committing to a price you are unable to pay should you get carried away in the bidding rounds. 

It is also important to note that you need a Norwegian Bank ID to confirm your identity when in a bidding process. Regardless of the property, the first bid always has to be in writing, but should you have to bid multiple times on the same property, you only need to confirm with Bank-ID every time you increase your offer.

If all goes well, Dahl-Pettersen explains, you need your Norwegian ID number (D-number/Personnummer) at hand, as it is required to legally sign the property over in your name.

Do your research

You have been on Finn.no, attended the viewing and showed off pictures of the house you are bidding on to friends, but have you read the small print? Dahl-Pettersen says her top tip for new buyers is to read the sales documents extra carefully before committing to a purchase.

 “That is important to avoid any nasty surprises or unexpected costs,” Dahl-Pettersen says, “Many people only look at the pictures, but forget to read the fine print”. 

She explains that this is especially crucial when buying apartments in cities like Oslo, where you likely will encounter housing associations, which occasionally do work on the property, which can accumulate extra costs.

READ MORE: Is it better to buy or rent property in Norway?

“For instance if they are planning to replace the roof of the block the next year, you will read about it in the sales documents. It is important to consider whether you can afford a property also after potential add-ons,” Dahl-Pettersen explains.

However, the worry of your future home having undisclosed electrical issues or dodgy plumbing work has been lessened somewhat, as homes in Norway can no longer be sold “as is”, meaning the condition of your purchase will be less of a mystery if you read everything thoroughly. 

One bid at a time

There are no short-cuts to bidding on homes, and if you hope to bid on multiple properties at once to see what sticks, you are out of luck. Although it is technically possible to bid on multiple properties at the same time, it is far from recommended according to Dahl-Pettersen. 

Because while bids in Sweden allows for prospective buyers who get cold feet to back out from the purchase, Norway does not offer the same option once a bid is made. That is because property bids in Norway are legally binding once put in writing, which makes the buyer legally obliged to buy the property at the price of the approved bid.

Know your limits

Before setting off to view houses, it is also smart to agree on a budget and financial limitations. This is especially clever to do when buying property in Norway, as you cannot back out once the bid is made. 

Dahl-Pettersen explains this helps clients avoid disappointment and allows them to think twice before making a financial commitment that will force them to count pennies for the next 10 years.

“It is important to set yourself limits and to set a price for what you think a house is worth to you. I also recommend that people go to multiple viewings to see what’s out there,” she adds.

Extend your horizons

As in most countries, housing prices in Norway are controlled by demand, and most people dream about living in the best and hottest locations. This is especially true in the cities, where the bidding wars can get fierce due to the lack of new builds. However, if you approach the process open-minded, you can get a great deal, according to the real estate agent. 

“Get to know the area surrounding your dream location. A place with a slightly different zip-code may actually suit you better and give you better value for money,” Dahl-Pettersen said.

“For the price of a 20 square metre apartment in Majorstuen, you may find 50 square metres with a balcony somewhere only a few metro stops away,” The estate agent added.

Consider buying new

Yet, if the mere thought of a bidding war makes you anxious, there is a way around it. According to Dahl-Pettersen, new homes in building projects usually have a set price, similar to buying a house in the UK or US. 

If the budget suits you, this may avoid the additional stress of having to out-bid your competition to secure your dream home. The only minus is that the house is not yet built, and it can be harder to visualise what it will look like once it’s done.

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PROPERTY

Key mistakes to avoid when bidding on a house in Norway 

Norway's house bidding process is equally stressful and confusing, but before putting in an offer, you should make sure you aren't making any of these costly mistakes. 

Key mistakes to avoid when bidding on a house in Norway 

Buying a house is normally stressful enough, whether it’s getting a mortgage in place, going to dozens of viewings or spending hours going through listings. 

In Norway, the process is further complicated by the house bidding process, which you will have to go through when buying most properties today.

Additionally, you could make several mistakes that could make the process harder or cost you dearly. 

READ ALSO: 

Not having financing in place

Before you can bid on a property, you need to visit the bank to ensure financing for your purchase. If you are taking out a mortgage on the house, you will need to make sure you know the set limit the bank will allow to borrow. 

When you make a bid, the estate agent will contact the bank to ensure that you have the financial arrangements. If you do not have enough money or the mortgage your bank agreed on doesn’t cover the cost, your bid will be rebuffed. 

Therefore it is crucial to know your financial limits when entering bidding rounds to avoid any disappointments. 

Making a bid on a house you aren’t sure about

You should be absolutely sure that you could see yourself living in a property when you bid on it. This is because bids in Norway are legally binding, meaning that even if you put in a speculative bid and it’s accepted, you won’t be able to back out.

This means that you should avoid putting in any offers on homes you aren’t 100 percent sure about.

So while you may be in a rush to get on the property ladder or take a step up, patience will prevail over diving in headfirst. 

Forgetting to do proper research

The devil is always in the detail, and as dull as it may be, you should always read the small print to avoid any nasty shocks. 

This is especially important when buying apartments in Oslo and other cities where you will likely encounter housing associations where residents will be expected to pay various fees or contribute to the upkeep of the block. 

“For instance, if they are planning to replace the roof of the block the next year, you will read about it in the sales documents. It is important to consider whether you can afford a property also after potential add-ons,” Trine Dahl-Pettersen, real estate agent at Eindom 1, explained to The Local

Reading the small print isn’t the only place where research pays off. For example, one reader who has bought a house in Norway pointed out that finding a place that needs a little bit of work can help you avoid intense bidding wars, and locals tend to want a ready-made home to move into. 

“Finding a property that won’t go sky high over the asking price when bidding can be challenging. However, I quickly noticed that Norwegians are not afraid to bid high for a ready-to-go home,” Scott told The Local of his experiences buying in Bergen. 

“If you are comfortable doing some work on it, you can find a much better deal, maybe even under the asking price,” he added.

Therefore, market research can help prevent you from paying over the odds. 

Making more than one bid at a time

Unfortunately, putting plenty of bids out and seeing which offers stick could be a lot more disastrous than you may think. 

As mentioned earlier, bids in Norway are legally binding. Meaning that if you have two bids accepted at the same time, you will be legally obligated to purchase both of them.

Not having BankID

Despite the bidding process being done over the phone, there are still some hoops to jump through. 

You’ll need to have a Norwegian Bank ID available for the bidding process, as it is needed to confirm your identity when sending your bids. 

Without this, you won’t be able to lodge any offers. 

In addition to bank ID, you will need a Norwegian identification number (D-number/Personnummer) to hand. 

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