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.
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.
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.
"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.