Weeee…Hot topic! I have been thinking about this blog post for soooooo long, but now, in view of our anniversary in our huisje, I’ve decided it is really time to crash it.
How does the housing market work, what happens after I win? How long does it take to get a mortgage? Should I get a makelaar? What is the NHG? Should I even want a property house in first instance? What is the financiering voorbehoud? And the bouwkundige voorbehoud? Should I request them or they will lower the chance of winning?
Aaaaaaaaaaaaaaaaaaaaaaaaaaaaah! There is a llllot to say. Thus I’ll write the major steps here, and then dive into some details in future posts.
The process in a nutshell
First part: get the house
In Fig 1 you can see a flowchart with the first major steps involved in the first phase of the process. I’ll describe them in the steps below.
1. House market orientation
The first thing is to get oriented in the housing market: getting acquainted with the system and websites, getting to learn the neighborhoods and areas, understanding (to the possible extent) the price range on the basis of type of house, squared meters and location. It’s also good to start sharpening your own taste for the type of house you’d like: number and type of rooms, location and orientation of the house. Make a list of top priorities that your house will need. Trust me that in the spiral of searching you’ll get lost, let alone your preferences. For example, we agreed in the beginning we wanted a “Dutch house” (not an apartment), getting as much sun as possible in the afternoon (thus with garden in the South or West), having reasonable rooms (not too small, neither too large) and a completely equipped bathroom on the first floor (where the rooms are).
For this initial step, we suggest two fundamental tools
funda.nl Here you’ll find the houses on the market – both the ones that are still available, the ones sold up to some time ago (verkocht), and the ones under negotiation (verkocht onder voorbehoud).
wozwaardeloket.nl Here you’ll find the market value of the houses, assessed every year by the municipality. Although that can differ substantially from the asking price you see on Funda, it can help you understanding whether that price is reasonable (for example in the ranking with other ones).
2. Request house viewing
Once you find the house that fulfills (almost) all your requirements, you are ready to request the house viewing. Normally real estate agents can be directly contacted via Funda, but you can also try to contact them directly (personally I’ve always used the first). There are few main options for house viewing
Private appointment In our experience, a rare pearl. Actually we’ve viewed some houses with this modality, and they were all from the same agency. Personally I find this modality much better. You feel considered as a person and you can ask direct questions to the agent without queuing. On the other hand, you do not get to hear the questions others ask (which may be a good hint for your viewing and future ones)
Open house By far this method is the one that was most commonly used in practice. Seriously, we would enter some houses full of people (something like 30?!), getting stuck on the stairs – people walking up and down – and really limited view. There’s still something positive in this, and that’s the fact that you get to overhear others’ comments (also of agents), and that may make you notice things you wouldn’t have noticed in your private appointment.
A mix of the two Some agencies organize sequential visits in one day – and then you somehow get to meet the person before you exiting the house and the one after. It may seem weird, but you get the time for yourself to check the house and to ask questions to the agent. On the other hand again, you don’t hear others’ questions which might be of use for you too!
3. Make offer/negotiate
If after the visit you still like it (and it wasn’t only about the skills of the photographer), it’s your time: make the offer! In most of the cases this is a blind auction, where all the potential buyers make an offer and then the highest wins. Of course, anything can happen – and you’ll never know what really happened. In some other cases the asking price is the amount they’d like to get, there is a smaller number of potential buyers and numbers do not go crazy high as with the blind auction. The first modality is often linked to open houses and mixed modalities (where you get the form to be filled in to take part to it), while the second more with private appointments. Since we had less private appointments, we also had less options for “open price” and negotiation. In the forms for the offer you are often asked – beside your personal and possibly partner information – your financial possibilities (for example, if you got already oriented for the mortgage – see below), your offer (of course!) and the date you wish to enter the house (this may also be a point for discussion).
By far this has always been the step making me more nervous, and the blind system didn’t help. At all.
But that’s essentially it. Now you just have to wait! A positive aspect about all this process is that the response rate is very high: every time we’ve made an offer, we’ve got a reply (all but twice, a rejection). But still, you do not sit waiting for Godot. And there are only two possible outcomes:
you lost it. Someone offered more, and you must repeat this step all over again
you won it, congratulations! Now the fan begins. Follow up with the second part!
4. Mortgage orientation
Wait – what is the other first thing in the flowchart, floating beside market orientation? It’s the mortgage orientation. This means getting in contact with your bank, or more banks, or financial advisors, to see what your concrete opportunities are. Online orientation is certainly a good first step, but talking with your potential creditor is advised. It helps you to orientate yourself and understand the rates offered by each bank, under which condition (e.g. fixed or variable rate, duration of the mortgage), and if for example – conditionally on the type of house you’re going to get – you are eligible for the Nationale Hypotheek Garantie (NHG). You can find what NHG is, how do you get it and when it is advantageous in this post. Although this step is not strictly required, it is strongly advised. It might set you in a better position over the other potential buyers! The reason is that the seller (whether an agency or a private) will be more interested in a potential buyer who has concrete chances of getting the mortgage – and has already discussed this with the bank – than a person bidding the highest price but then quitting because of financial limitations (an no support from the banks). This information is often required in the bidding forms at open houses, and is advised to be mentioned in the discussion with the seller.
Second part: you got the house. Now arrange the contract and the rest
You’ve got the call (or the email) that you have won the house, and you have decided to go further with the purchase. Now many things are going to happen pretty much at the same time – therefore the sequential order might be slightly swapped or overlapped, but I’ll stick to the order that happened to us.
Good to know: the housing market at the moment is crazy fast. You probably are contacted short after submitting the offer, and you are required to reply fast as well. In short time also the rest happens, but I’m going to explain it slower pace in order to be sure I’m not skipping any step.
5. Get the technical check performed
In case you have specified in the bidding form that you wanted the reservation for technical check, it’s the moment to contact someone who’s going to perform this. In general, it holds the rule the sooner the better: in case the technicians prove that the necessary structural costs exceed a certain threshold, you have still some time for negotiation, before even signing the contract.
6. Contract with the seller (agency)
So, after accepting, (and possibly having performed the technical check) you’ll get the invitation to sign the buying contract (koopcontract) with the seller. It contains all the information about the house, and it’s essentially the same contract you’ll sign at the notary office. Although it does not give you the keys of the house and it’s not in front of the notary, it is by all means a contract and as such it has conditions.
After signing the contract, you have three (3!) days in which you can rethink of your purchase and walk away without giving any reason and without paying a fine. From the fourth day, you’ll be charged 10% of the amount you offered in case you walk away – also if the reason for stopping the negotiation is that the bank does not give you the mortgage, or you have found out the house has substantial structural problems that will cost you ‘too much’.
NB.you can protect yourself with the financial reservation (financiering voorbehoud) and with the technical check (bouwkundige keuring voorbehoud). [I’ll expand on this in a separate post. I’ll add the link as soon as it’s online!]
7. Get the objective evaluation done (taxatie)
The asking price and the offer you have made do not have a direct connection to the market value of your house: there are a thousand factors that could play a role in there! (like taste, personal situation, number of previous attempts and such). Therefore an objective evaluation is always needed. There exist independent agencies (taxateurs) who do so, and decide the current objective market value of your house.
8. Mortgage contract with the bank
Once you have the contract signed and the objective evaluation done, you can walk to the bank you have chosen (and the one you have probably had previously contact with), to get the mortgage offer. In theory this should be a smooth step, as long as you have already discussed the conditions and the final proposal respects them. For example, check whether the bank contract specifies you’re going to get the Nationale Hypotheek Garantie (NHG) – this can make a huge difference in the long run!
9. Contract with the seller (agency) at the notary’s office
If you have made it successfully through all the steps above, you’ll probably end up with an appointment for the final transfer of the house from the seller to you. This is done in front of the notary, who will also make official the transfer of the money from the bank to the seller, and you official debitor to the bank according to the contract you agreed upon with the bank. From this moment, you are officially the owner of the house.
But hey, why it is never mentioned a real estate agent from the side of the buyer? The reason for this choice here is very dual: the real estate agent will help you in this exact same process, and we didn’t use the support of one. [I’ll write more extensively about this in a separate post, but for now my advice is to get informed no matter what your choice will be, and ask an agency for support in case you feel more confident.]
That’s it for now! I’ll expand further on some details in other post – you have surely found the placeholders here and there. I’m also writing a post on the costs related to this. It will all come online, I promise! Write your comments and questions in the comments below, or reach out to me – I’ll make sure to address them.
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