'Kupping': What is it, and can it give you an edge in Norway's property market?
Kupping is a practice that many attempt in Norway's property market to try and get around the bidding process and secure their dream home. Here's what you need to know about it.
An increase in demand has led to Norway's property market becoming much more competitive in recent years.
Those unfamiliar with the process will need to know that most homes in the country go onto the market, viewings are held, and then a short time after the viewings, bids are made on the property, with the sellers deciding the winning bid.
The most notable exception to this is new builds, which are typically sold for a flat price.
Many who have gone through the process will tell you that the bidding process can be equally stressful and heartbreaking, with pretty much every homeowner familiar with the sensation of being outbid on what they thought would be their dream home.
With the bidding process being fiercely competitive and constantly threatening to put houses out of the financial reach of many, you must be wondering whether there is an alternative to this.
Well, firstly, we've already mentioned buying a new build for a flat price, but in cities like Oslo, new build developments are in short supply.
Another alternative is the practice of kupping (not to be confused with the practice of putting suction cups on oneself for reported medical and holistic benefits).
The practice in Norway is entirely legal and relatively popular, so it doesn't fall into a grey area and is perfectly above board, if not a bit frustrating for anyone who's ever looked forward to a viewing or bidding round only to be told that the house is off the market.
How does it work?
Kupping is the act of approaching the buyer and making them an offer before the bidding round, or even the viewing, commences to try and take the home off the market before others have the opportunity to make offers.
Essentially it can give the bidder a free run at the house. The reason for this is that if the deadline for the bid to be accepted or rejected is before 12pm after the last advertised viewing date, the broker cannot inform other interested parties of the bid.
However, If the bid is after this, the other interested parties will be informed, and your fellow house hunters will be aware of your desire to take the house off the market. This doesn't change things too much, but it may increase the intensity of the bidding rounds.
If the buyer accepts your offer, any other viewings or the bidding round will be cancelled - and the home sale process will proceed as usual. Although, the seller can instead table a counter-offer with a deadline you will need to decide to accept or decline within a deadline.
Should the attempt be rebuffed, you will have to wait for the bidding rounds to try and secure the house. If you put in a particularly lowball, offer you may risk upsetting the sellers, who have the final say over whose bid gets accepted.
Things to be aware of
Any offers accepted, either through kupping or the bidding round, are legally binding, and from there, it will be hard to pull out of the process if you get cold feet.
Therefore, you should only make direct offers on homes you want.
Additionally, making a direct offer to the sellers without involving the broker isn't recommended. Without someone familiar with property law and the home sale process, the seller and buyer are at risk of overlooking critical contractual and legal issues.
And finally, it's worth noting that in many cases, if you wish to try kupping, you may have to offer over the asking price. Essentially it signals to the seller that there may be a lot of interest in their property, and there is at least one interested party who really wants to get their hands on the keys.
Therefore offers around the asking price are likely to be rebuffed as the buyer will be confident that they can secure a higher price through the bidding process. Brokers will also be aware of this and when there is a lot of demand in the housing market, they will recommend buyers hold out for the bidding round.