A beginner's guide to buying a home in Norway
Many international residents in Norway consider buying property to be a complex and daunting task. It doesn't have to be – if you follow The Local's beginner-friendly guide.
For a lot of people, buying a home is one of the most significant investments they make in their lifetime. It's no surprise, then, that people usually feel stressed when it comes to purchasing property.
That stress only intensifies if you decide to buy a home in a foreign country – dealing with a lot of industry-specific terminology in a foreign language, navigating a brand new real-estate market, new rules and laws, and getting used to new financing frameworks are all part of this process.
However, if you're about to embark on your home-hunting journey in Norway, there's no reason to be worried.
As long as you follow the steps outlined in our guide for beginners, you'll be well-positioned to find success in your search for a new home in Norway (though you should also expect it to consume a lot of time – it is a major investment, after all, and you need to do your due diligence).
Step 1: Getting to know the Norwegian property market
The first step on your road to purchasing a home in Norway will be familiarising yourself with the property market in the country – first at a general level and then at the local level.
If you're looking for detailed explainers about the market, make sure to check out The Local's guide on the hidden cost of buying a home and essential hacks that make the process more manageable.
One of the best places for beginners who want to get a grasp of their local market is to start following apartment listings on Finn.no, Norway's biggest online marketplace.
Along with having the most extensive number of listings out of all the platforms, which makes it a great place to research prices in different parts of the country, Finn also has very useful and intuitive filter options.
For example, you can set your filter to display only properties that fit your budget, desired area, and a number of other factors (such as the number of rooms, type of ownership, etc.).
Not only that but with a little work, you can set up automated email updates to ensure you are notified about new property listings that fit your criteria!
Step 2: Mortgages in Norway
As many people don't have enough own funds to buy an apartment without securing additional finances, you can expect your road to purchasing an apartment in Norway to begin with a mortgage (Norwegian: boliglån).
Usually, you can expect Norwegian banks to lend you up to 85 percent of the purchase price of the property in question. That means you will have to save up at least 15 percent of the purchase price in equity (Norwegian: egenkapital), that is, your own funds.
Note that there are also additional costs that you'll need to pay, usually in the form of different taxes or fees (Norwegian: omkostninger).
These costs will differ based on the type of ownership you're interested in. For example, freeholders (Norwegian: selveier) in Norway have to pay 2.5 percent of the purchase price in document taxes to the Norwegian state and some additional registration fees.
In any case, you will need to reach out to a couple of banks to see what your mortgage options are, based on your current financial position. Make sure to shop around, as different Norwegian banks offer different interest rates, and some even offer special benefits for members of certain labour unions.
It is a widespread practice to use an offer that you got from one bank as the basis for negotiations with another bank, as a competing bank could want to give you a better deal (this usually comes with strings attached, for example, you'll likely be requested to transfer to that competing bank as a customer).
Step 3: Your proof of funds certificate (and why you should never show it to a realtor)
You will need a specific document to be able to make an offer for an apartment – the proof of funds certificate (Norwegian: finansieringsbevis).
This document – issued by your bank of choice – demonstrates that you have the funds to buy an apartment and specifies the sum you can spend on a home.
Surprisingly to many international residents, the process of applying for proof of funds tends to be relatively straightforward in Norway.
If you give the bank all the information it needs and if you meet its requirements, you can expect to get the certificate in as little as a week.
After you get it, you'll be able to participate in bidding rounds for the home you want to purchase (as you will find out during your research in Step 1, most – though not all – homes in Norway are sold through bidding rounds).
The good thing about the proof of funds certificate is that it doesn't have a short expiration date – it remains valid for several months.
Your bank contact will likely share this tip with you, but just in case they don't – never show your proof of funds to the realtor selling the property, as that will reveal how much money you have to spend in bidding rounds. The realtor is getting his fee from the seller, so he'll do what he can to make the seller happy – and help them sell at a higher price.
It's important to examine the property brochure of the apartment you're going to view and to be very detail-oriented in your on-site inspection of the property. Photo by Ivan Cheremisin on Unsplash
Step 4: What to expect at apartment viewings
Once you've reached a preliminary deal with the bank regarding your mortgage options, and with your proof of funds certificate in hand, you're ready for one of the more enjoyable parts of the home-hunting process in Norway - viewings (Norwegian: visning)!
Viewings offer you an excellent opportunity to get a hands-on feeling of what you can expect to find at what price, and you should go to at least five to six of them before you actually pick an apartment you want to bid for.
It's easy to fall in love with an apartment, but doing so might make you more prone to overbidding or stretching your budget in the bidding rounds.
By deciding to hold off with the bidding until you've gone to multiple viewings, you'll also have better chances of not getting too emotionally involved with a single apartment, as you'll see that there is a number of other great opportunities out there.
Furthermore, it's absolutely critical to thoroughly examine the property brochure (Norwegian: prospectus) of the apartment you're going to view, as these brochures state all the risks, problems, and potential elements of concern attached to the property.
By meticulously preparing for viewings and reading all the brochures, you'll be able to ask realtors the right questions on the spot and address any potential concerns.
Step 5: Bidding wars
So, you've done your research, you have your initial mortgage documentation in place and a proof of funds certificate, you've been through multiple viewings, and you're ready to put in a bid for an apartment you like.
Once you find it, you'll likely have to take part in a bidding round (Norwegian: budrunde), meaning that you – and all the other people who were present at the viewing and who liked the place – will face each other in a bidding process which usually takes place via SMS, shortly after the viewing (commonly, the very next morning).
All the bids made within a bidding round are legally binding.
READ MORE: Six key tips to survive the bidding war when buying a home in Norway
Don't let your emotions land you in trouble! It's good practice to decide on a bidding limit in advance of the bidding round so that you don't overspend.
The bidding will usually look like this: the realtor will send out an SMS to all the interested parties and state the starting price. Then, the prospective buyers will make offers, in which they will communicate the sum they're willing to pay plus the expiration time for their offer.
In the end, if you're the last person/bidder standing, and if the property seller accepts your bid (note that the owner can also refuse a bid), you'll be just a step away from becoming the immediate owner of that apartment!
READ MORE: ‘Kupping’: What is it, and can it give you an edge in Norway’s property market?
Step 6: Taking care of the paperwork
All that's left to do once you have been notified that you've made the winning bid is to take care of the associated paperwork.
The realtor usually sets up a meeting between the seller and buyer, where both parties go through the contracts and documentation related to the sale and transfer of the property.
You'll also need to notify your bank so that they can start working on finalizing all your loan documents (Norwegian: lånedokumenter). This can also take a week or two, so make sure to contact them as soon as possible.
Disclaimer: The process of looking for an apartment, getting the necessary financing, and the key elements of bidding rounds have been simplified to a degree in order to make the entire process more easily understandable to prospective home buyers in the country.
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For a lot of people, buying a home is one of the most significant investments they make in their lifetime. It's no surprise, then, that people usually feel stressed when it comes to purchasing property.
That stress only intensifies if you decide to buy a home in a foreign country – dealing with a lot of industry-specific terminology in a foreign language, navigating a brand new real-estate market, new rules and laws, and getting used to new financing frameworks are all part of this process.
However, if you're about to embark on your home-hunting journey in Norway, there's no reason to be worried.
As long as you follow the steps outlined in our guide for beginners, you'll be well-positioned to find success in your search for a new home in Norway (though you should also expect it to consume a lot of time – it is a major investment, after all, and you need to do your due diligence).
Step 1: Getting to know the Norwegian property market
The first step on your road to purchasing a home in Norway will be familiarising yourself with the property market in the country – first at a general level and then at the local level.
If you're looking for detailed explainers about the market, make sure to check out The Local's guide on the hidden cost of buying a home and essential hacks that make the process more manageable.
One of the best places for beginners who want to get a grasp of their local market is to start following apartment listings on Finn.no, Norway's biggest online marketplace.
Along with having the most extensive number of listings out of all the platforms, which makes it a great place to research prices in different parts of the country, Finn also has very useful and intuitive filter options.
For example, you can set your filter to display only properties that fit your budget, desired area, and a number of other factors (such as the number of rooms, type of ownership, etc.).
Not only that but with a little work, you can set up automated email updates to ensure you are notified about new property listings that fit your criteria!
Step 2: Mortgages in Norway
As many people don't have enough own funds to buy an apartment without securing additional finances, you can expect your road to purchasing an apartment in Norway to begin with a mortgage (Norwegian: boliglån).
Usually, you can expect Norwegian banks to lend you up to 85 percent of the purchase price of the property in question. That means you will have to save up at least 15 percent of the purchase price in equity (Norwegian: egenkapital), that is, your own funds.
Note that there are also additional costs that you'll need to pay, usually in the form of different taxes or fees (Norwegian: omkostninger).
These costs will differ based on the type of ownership you're interested in. For example, freeholders (Norwegian: selveier) in Norway have to pay 2.5 percent of the purchase price in document taxes to the Norwegian state and some additional registration fees.
In any case, you will need to reach out to a couple of banks to see what your mortgage options are, based on your current financial position. Make sure to shop around, as different Norwegian banks offer different interest rates, and some even offer special benefits for members of certain labour unions.
It is a widespread practice to use an offer that you got from one bank as the basis for negotiations with another bank, as a competing bank could want to give you a better deal (this usually comes with strings attached, for example, you'll likely be requested to transfer to that competing bank as a customer).
Step 3: Your proof of funds certificate (and why you should never show it to a realtor)
You will need a specific document to be able to make an offer for an apartment – the proof of funds certificate (Norwegian: finansieringsbevis).
This document – issued by your bank of choice – demonstrates that you have the funds to buy an apartment and specifies the sum you can spend on a home.
Surprisingly to many international residents, the process of applying for proof of funds tends to be relatively straightforward in Norway.
If you give the bank all the information it needs and if you meet its requirements, you can expect to get the certificate in as little as a week.
After you get it, you'll be able to participate in bidding rounds for the home you want to purchase (as you will find out during your research in Step 1, most – though not all – homes in Norway are sold through bidding rounds).
The good thing about the proof of funds certificate is that it doesn't have a short expiration date – it remains valid for several months.
Your bank contact will likely share this tip with you, but just in case they don't – never show your proof of funds to the realtor selling the property, as that will reveal how much money you have to spend in bidding rounds. The realtor is getting his fee from the seller, so he'll do what he can to make the seller happy – and help them sell at a higher price.
Step 4: What to expect at apartment viewings
Once you've reached a preliminary deal with the bank regarding your mortgage options, and with your proof of funds certificate in hand, you're ready for one of the more enjoyable parts of the home-hunting process in Norway - viewings (Norwegian: visning)!
Viewings offer you an excellent opportunity to get a hands-on feeling of what you can expect to find at what price, and you should go to at least five to six of them before you actually pick an apartment you want to bid for.
It's easy to fall in love with an apartment, but doing so might make you more prone to overbidding or stretching your budget in the bidding rounds.
By deciding to hold off with the bidding until you've gone to multiple viewings, you'll also have better chances of not getting too emotionally involved with a single apartment, as you'll see that there is a number of other great opportunities out there.
Furthermore, it's absolutely critical to thoroughly examine the property brochure (Norwegian: prospectus) of the apartment you're going to view, as these brochures state all the risks, problems, and potential elements of concern attached to the property.
By meticulously preparing for viewings and reading all the brochures, you'll be able to ask realtors the right questions on the spot and address any potential concerns.
Step 5: Bidding wars
So, you've done your research, you have your initial mortgage documentation in place and a proof of funds certificate, you've been through multiple viewings, and you're ready to put in a bid for an apartment you like.
Once you find it, you'll likely have to take part in a bidding round (Norwegian: budrunde), meaning that you – and all the other people who were present at the viewing and who liked the place – will face each other in a bidding process which usually takes place via SMS, shortly after the viewing (commonly, the very next morning).
All the bids made within a bidding round are legally binding.
READ MORE: Six key tips to survive the bidding war when buying a home in Norway
Don't let your emotions land you in trouble! It's good practice to decide on a bidding limit in advance of the bidding round so that you don't overspend.
The bidding will usually look like this: the realtor will send out an SMS to all the interested parties and state the starting price. Then, the prospective buyers will make offers, in which they will communicate the sum they're willing to pay plus the expiration time for their offer.
In the end, if you're the last person/bidder standing, and if the property seller accepts your bid (note that the owner can also refuse a bid), you'll be just a step away from becoming the immediate owner of that apartment!
READ MORE: ‘Kupping’: What is it, and can it give you an edge in Norway’s property market?
Step 6: Taking care of the paperwork
All that's left to do once you have been notified that you've made the winning bid is to take care of the associated paperwork.
The realtor usually sets up a meeting between the seller and buyer, where both parties go through the contracts and documentation related to the sale and transfer of the property.
You'll also need to notify your bank so that they can start working on finalizing all your loan documents (Norwegian: lånedokumenter). This can also take a week or two, so make sure to contact them as soon as possible.
Disclaimer: The process of looking for an apartment, getting the necessary financing, and the key elements of bidding rounds have been simplified to a degree in order to make the entire process more easily understandable to prospective home buyers in the country.
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