Hank Jansen, founder of Expat Mortgages, says the key to winning the bidding war is preparation. But how to do it? Read on and find out!
With signs of rising interest rates and the first quarterly decline in the housing market in recent months, this may be a good time to buy a home. But there is still an alarming shortage of homes, and so if you’re lucky enough to find the house of your dreams, the question is how to win the bidding war that is sure to go.
Before you go hunting, be prepared to move quickly when the desired property appears on the market – because the winning bet can get it in a few days. The first thing you need to know is how much you can borrow.
Poll for The Economist showed that of the 20 developed countries the Netherlands has the highest ratio of housing loans to disposable income. While this means you need to protect yourself from raising interest rates with a fixed rate, it also means your ability to borrow here is greatest.
Prepare an application for a mortgage
It is important to prepare well for applying for a mortgage, having on hand all the key documents proving your obligations and income (if necessary for the last three years). Think ahead: the cost of a home consists not only of the initial cost of the purchase, but also of maintenance over the years (which, in particular, in older homes can be significant).
“Have some reserves, either money or a construction reserve in your mortgage, to fix everything, and remember that housekeeping will cost money,” Jansen advises. “Next year, these stocks may be needed to paint the facade, service the pipes and wiring or replace the central heating system.”
Keep in mind that if you are going to make a reconstruction with sustainable measures, you will be able to borrow up to 106 percent of the official estimate, thanks to the state scheme. (However, this may have a higher interest rate).
Hire a buying agent
You need to look like a reliable buyer and have the best advice on what price to offer to sellers. A real estate agent is very necessary: a person who has experience but also has an instinct to go to murder. “You really need a very good purchasing agent – a person with technical skills, but who is shark enough to make a deal,” advises Jansen.
Although there are steps to make real estate agents ’businesses more transparent – and ministers, consumer organizations, agents and real estate companies have signed an agreement to make purchases more open – at the moment the bidding process is different for every purchase. Some facilities have a closing date with closed offers. But you can quickly win a property if you immediately offer a convincing amount.
Barry Burgemester, who runs the real estate agency Burgemeester Vastgoed, says the most important thing is to be realistic and understand that you will probably need to invest some of your own money. In addition, a professional agent can present you as a reliable and trustworthy buyer, which will make you more attractive to the seller.
“The most important thing is that you are prepared and realistic,” he said. “It all starts with a budget and then you need to have an agent who has experience and knows the market to keep your feet on the ground. Of course, everyone wants the house of their dreams, but even with an unlimited budget it is difficult, because the housing market is limited, and wanting to buy a lot.
“You need a significant amount of your own funds to cover the costs (cost dill) and the difference between the valuation for the bank and the final sale price ”. Sometimes, he adds, a good agent advises you that it’s not wise to offer more than a certain amount for a home because it’s just impossible.
There are always contenders with bigger pockets. However, more importantly, the overall package, such as terms, price and how the agent represents the customer, is more likely to make a deal.
If you sign a contract to buy in the Netherlands, before the final exchange you have the option to include a few points on the termination of the contract without the usual 10 percent penalty. There is usually a financial point to give you time to get a mortgage. Many people also recommend an item so you can do a professional home survey to anticipate big expenses ahead and make sure it’s what was promised. However, says Burgemeester, buyers are now accepting the offer unconditionally because it reduces their risks.
“We need to move faster,” he says. “In the old days it was customary to go here and there. If there is any feeling that the house is a bit tricky, you should conduct a survey, but we can check if the building is in good condition. If the purchase is not bound by the rules, it is more attractive to the seller.
However, we never advise you to buy without a financial reservation before we get the consent of a mortgage advisor. It should be a safe and firm offer or not offered at all. Jansen also doesn’t recommend offering without a financial reservation (if you’re not making a cash purchase) – it’s a risk and things can go wrong. But it is a decision you must make based on your financial situation.
Use a cooling period
You have three business days after signing the purchase contract to “cool down”. Jansen advises to take action to do as much as possible so that if a problem arises, you can retreat. You will need to arrange a formal home appraisal (which you can schedule before signing the purchase agreement). Although this is not a complete survey, it will show if the immediate cost of repairs will be more than 10 percent of the cost of the home.
At this time, it is also possible to conduct a survey of the building, which usually costs about 400 euros and provides details on possible problems such as asbestos, external maintenance costs and immediate repairs. A good surveyor on the weight of gold (and if you later discover any hidden violations that the buyer had to report, the survey shows that you have conducted the necessary research as a buyer and may be able to return them to the seller).
Finally, it’s time to start applying for a mortgage, which – if you’ve gotten all your ducks in a row before – should be easier. “It’s a difficult market, but I’m not negative,” says Jansen. “Real estate is still a good investment and a good alternative to rent. We have a shortage of 350,000 houses, and it will grow to a million. “
The Expat Mortgages team is ready to help you with all your mortgage needs and questions so you can get your dream home. Schedule an appointment with one of their consultants now!