Buying a house

Wil Jansen - 15-5-2018

Buying or renting a house in Holland?

Buying a home in The Netherlands as a foreigner is a big step and can be quite exciting. But do not forget that it normally is a good investment and the costs are much lower than renting, especially for an expat. Housing prices are relatively low compared to other large European cities, and interest rates are extremely low, so now is a attractive time to purchase a house. There is a lot of money involved and most people want to be sure that they have a buying broker besides them who acts on their behalf. A buying broker will give you thoroughadvice about the current housing market, building aspects, resolutive conditions, local regulations and how to submit a competitive but realistic negotiating offer.

The purchase process
Once you have decided if you want a buying broker on your behalf we can split the process in a few steps:
-         Find a suitable property
-         Attend viewings for the First or secons appointment
-         Do further investigations
-         Negotiate/ Bidding advise
-         Sign the sales agreement
-         Finance your property
-         Go to the notary
 
Can I buy here and do I also need to invest myself?
You can normally buy a house as a foreigner (resident or non-resident) in Holland and you will (for now) be able to finance 100% of the purchase price with the bank. If the purchase price is more than the valuation price (this is by the bank obligated done after the bought by a third party) you have to put the difference in yourself. A buying broker can more or less advise you if the bid is equivalent the value. If you are bidding over the asking price this is for consumers difficult to determine and the selling broking wil wonder if you know what your are doning.
De additional costs involving with the bought you always have to pay for yourself. Before 2018 you could still finance some of these costs by the bank. Normally the extra costs involved are around 6% of the purchase price, but this also depends on the buying price. Calculate with 2% tax of the purchase price, notary costs ca. 1500 euro, valuation costs 500 euro and Kadaster costs around 200 euros, plus buying broker fees (in general around 1% ex VAT) and costs for the mortgage adviser (between 2500 and 3500 euro).

Using a buying broker to act on your behalf
Using a real estate agent for the bought is very common in Holland. If you use the services of your own broker to buy your new home then this is a purchase broker. If you have your home sold by a broker then this is a sales broker.
When you are a foreigner it is specially advisable because there are a lot of rules which you perhaps do not know about and the selling broker takes you more serious. This is extremely important when there are more people interested in the property. The costs for the broker a buyer will pay and the selling broker is paid by the owner. A broker can act as a purchase broker on one occasion and a sales broker at another, but he can never act as both the purchase and sales broker for the same property.

Finding your home
The most common way to find a house that suits your wishes is through the Funda website. This national housing aggregator lets you apply lots of different filters: how many bedrooms, a balcony or garden, price category and more.
You can also create a Funda account (free) and set up an alert based on your preferences, which will notify you when properties you’d like to view become available. Be aware that houses which are sold, will still be available on the website because the selling broker will only put it on ‘sold’ when the mortgage is setteled by the buyer (mostly 5 weeks).

Freehold of leasehold
It is common to buy a property in freehold and in Leasehold in The Netherlands. If you buy a leasehold property and you are paying a monthly fee which is periodic deductible from the taxes (income tax) in Holland. Sometimes these payments are bought off for a period off time.

Freehold: If you own the freehold property, it means that you own the building and the land it stands on. It is your own name in the land registry as “freeholder”, owning the “title eigendom”. Freehold is pretty much always the preferred option: you can’t really go wrong with it but in Holland also the leasehold is used.

Leasehold: Leasehold means that you have a lease from the freeholder (the landlord or mostly government) to use the land for a number of years. The leases are usually long term – often 100 years and the right to pay are often bought off for a period of 50 or also 100 years. If this period runs out you start paying monthly or you can buy the right to use of for an additional 50 years. It is rather costly to do so, in general you pay 17 times the amount you pay per year for a 50 years period. These cost are not tax deductible. If the right end you can use the land the Landlords must, if he does not want to extend the right to use the land, pay the worth of the house which is standing on his land.

VvE/ The owner's association
In The Netherlands almost every apartment building is managed by an owner's association, called a Vereniging van Eigenaren (VvE). If this VvE is not active with saving and maintenance it will be very difficult to get the property mortgaged by the bank. Also, the VvE need to save 0,5% of the rebuilding costs and they need to have a plan for maintenance (MJOP) during the coming years. If these things are not in order some banks will not mortgage the property or some banks ask for a technical inspection report instead to find out the technical state.
The VvE is responsible for general repairs and maintenance and may be well or poorly ruined, or even have gone into debts. Sometimes they made a discussion to do big repairs so then you have to pay a huge amount yourself. A buying broker can help you with sorting this out for example by looking into the status of the previous meetings.

Documents required. Further, terms and conditions relating to the shared spaces will be explained in the property division deed and regulations (splitsingsakte en reglement) and which should be included with your documentation at the time the bought. You also want to get the owners deed (eigendomsbewijs) in where things are written what you can or cannot do with the property. Ask all the documentation of the VvE and maybe there is something known about polluted land, concrete rot or asbestos in the property. And is the information the selling broker is giving you the wright and total information? We as a buying agent also take a good look at for example; Local development plans , environmental aspects, relevant details in the Land Register, status and obligations of the Owners’ Association, foundation aspect, municipal and provincial regulations, and presence of energy label.

Deposit and mortgage
Your mortgage will be reviewed after the provisional sale contract is signed and all the documents (from your employer and the valuation report for example)are uploaded in the system of the bank. The deposit of 10% can be payed by the bank also, but you can als pay this yourself to save some costs.

Doing a technical inspection
If you have found a property which you want to purchase you can sometimes negotiate on the asking price but many times you have to bid more than the asking price in order to get it. Before doing a bid on the property it is sometimes wise to do a structural or building survey or you can do the bid and do the technical inspection later. The negotiations are usually done through the buyer's and seller's estate agents. If you are doing a technical inspection before bidding this can work to your disadvantage. We are pleased to explain you why this is.

Do you know that it is the seller’s duty to inform you about matters that could be important for you, such as defects, for example a leaking roof. This does not apply to defects you of your buying broker can see themselves, for example rotten window frames or cracks in the walls. The seller is not obliged to point these out to buyers.

House prices and overbidding
Since the beginning of 2017 house prices are rising very hard and prices are higher than before the crises which started in 2008. At the moment (2018) there is much demand for housing and it is very hard to buy a house. This because in average maybe 10 to 40 other people also want to buy the same property. The asking price is nothing more than a price which you have to ad 5-20% on top. But if the asking price is already high you pay to much for the property and when it is to low you must bid more in order to get it. It is very important to bid the good amount because the bank will not give more mortgage that the real value. If you have own savings and you want to use this than it is no problem. Without a buying broker you only find out later. The selling broker probably wants to know if you have the money bidding over the asking price as savings.

If you want to buy a certain property we will inform you about the best offer strategy on the basis of all the information we have collected. We will assist you with calculating a strategic opening offer. As a valuer we have a lot of experience in determining the correct value and he can see what the market value of comparable properties. Once the bid has been accepted, both parties have a three-day ‘cooling off’ period. The bid process may also include conditions that must be met before signing the mortgage.