Information about buying a house in the Netherlands
Everything you need to know about buying a house in the Netherlands
If you’re reading this, you’ve probably decided to buy a house in the Netherlands. Or maybe you’re done with the ridiculously expensive rents and are weighing your options of renting vs. buying. A difficult decision, considering how much there is to know about Dutch housing market.
I recently decided to buy a house in the Netherlands. When I started researching the options, I didn’t know where to begin. It took me a ton of time and effort to figure out the intricacies of the process, the exact steps involved and the implications of each decision. I couldn’t figure out the temporal order of events.
The information online is abundant and it’s easy to get overwhelmed and yet still not find what you’re looking for. The flowchart I was hoping for, some sort of ‘how-to’ of the house-buying process, did not exist. Therefore, like many other first-time home-buyers, I started spending numerous hours researching the topic and discussing it with advisors and other buyers. Now that I’ve gone through the process from beginning to end, I finally think I understand it. I thus thought I would provide you with the summary that I was lacking.
I hope that this is a helpful overview of what needs to happen and in which order when buying a house in the Netherlands. That way you can simply focus on finding your dream home!
So, let’s start with the basics.
Your new best friends Funda.nl
Almost every house that is for sale in the Netherlands will sooner or later end up on funda. This is your source of truth when it comes to understanding what the market has to offer and getting all the information you need about any house. It will also provide you the means to contact the selling agent and schedule a viewing. To make the most of it, set up notifications based on your search criteria. That way you will be up to date with new “arrivals”. You have to be quick with scheduling a viewing — the schedule fills up rapidly. Note that you will only see the asking price and never the eventual purchase price (which in today’s housing market is often above the asking price).
Your mortgage advisor (“hypotheekadviseur”) What they do: A mortgage advisor will help you identify the best mortgage for your circumstances and manage your mortgage application. They are also your go-to person for all the questions you will likely have. How to select one: Most advisors will offer a free 1-hour conversation, where you can discuss your circumstances, determine how much you can loan, and ask your questions. Make use of this conversation to identify if the advisor is a good fit for you. Ask how much they charge for their services (both for the advice and execution), as this information is often not readily available. Selecting an independent advisor who works with most mortgage providers in the area is a wiser option, as it ensures you will get the most competitive conditions. This is in contrast to the single option that a mortgage advisor at a bank will offer. When and why it is important: From the start. You need to know how much you can loan to determine your (maximum) budget. There are no obligations with the advisor until you have gotten their extensive advice and have applied for the mortgage. That will only be necessary once you have an accepted offer. Costs: €2000-€3000
Can you do without? Some mortgage providers like this one offer the option to apply for a mortgage on your own. In order to do so, they ask for a knowledge test. I would personally not do it as a first-time buyer, because there are a lot of considerations around the mortgage that are good to discuss with an advisor, especially if you are an expat. In retrospect, it doesn’t seem like they do much, but for me it did bring some clarity and was worth the peace of mind.
Your real-estate agent (“aankoopmakelaar”) What they do: They receive your ‘wish list’ and try to find a matching house for you. You will still need to do a lot of searching on your own, but they will come to the viewings with you (often scheduling them as well), ask the right questions and help you determine which house is a good fit. They will do the bidding for you and arrange all that comes afterwards (except for the appraisal and the mortgage). How to select one: The most important variable is your search area. You can find a list of agents and their ratings on Housing Agent or on Funda. Agents will normally work only in a certain region in the Netherlands (often in one single city). There are also agencies that cover larger areas or even the entirety of the Netherlands, but look for someone with expertise in the local market. You will have to schedule a short introductory meeting with an agency to figure out how they work and if you like them (and their prices!). What will save you time and effort is a reference from someone who bought a house in the same region. If you are looking in more than one area, like I was, then it might be worth having more than one agent. Just make sure that you don’t have to pay one agency too much if you find a house through the other one. Ask about this during your initial conversation with the agents. When and why it is important: You can have the real-estate agent from the start, where they provide you the ‘full service’, or after you’ve found a house you want to bid for. The agent will know the local market, the approximate market value of the house and will advise you on what to bid. How much you will bid is always your decision, though. The agent will assess how well a house is maintained at a viewing and they will know all the intricacies of the buying market strategies. Having an agent also increases your credibility with the seller. In addition, they might have insight on what is yet to go on the market. This provides a time advantage, as in today’s market everything is a race. Houses are sometimes sold before they even get to the public market, through the internal real-estate connections. It will happen that you have a viewing scheduled, but it gets cancelled because the house was sold in the meantime. Thus, having an agent will give you a slight advantage. Costs: The costs vary between agencies and between regions. I’ve seen costs anywhere between €1,500 and €4,500. There are different policies, too. A lot of agents will have a ‘no cure no pay’ policy, meaning you will pay only when you have actually purchased a house with their help. Some will have a cancellation fee if you decide to stop working with them. The prices are not very transparent, so don’t expect to find them online. Can you do without? I think so. But it’s likely that you will struggle to get a bid accepted in this market. If you do get a bid accepted, it might be that you are overpaying, so what you’ve saved on the real-estate agent you’ve paid on the house (and then some). You might end up bidding more than the house market value and having to pay the difference from your savings (since the mortgage can only cover 100% of the market value). Conversely, you might never offer enough and end up bidding many times unsuccessfully.
If you do not know the area where you are looking to buy, then an agent will help you with their knowledge of the area. Me and my partner started looking for a house without an agent, went to a lot of viewings on our own, but ended up hiring one and it brought us more confidence. I think that we wouldn’t have bought the house we did without our agent. My perception is that they nudge you towards the right decision (or A decision anyway) if you end up having second thoughts. We needed that outsider view.
So, where do you begin?
Below is an overview of what you need to go through from beginning to end. Some events might be overlapping, but if you follow this flow you should be able to get somewhere!
Determine where you want to live Where you work and how much you are willing to commute will naturally influence the decision where to live, as will the house prices in different regions and your budget. Decide what type of house you like and what you value. For example, you might like the characteristic ’30s Dutch houses (and I don’t blame you!), but these are often more expensive, in addition to requiring more maintenance (if not immediately, then in the near future). Are you buying for the longer or shorter term? For the shorter term, a smaller apartment in a good location might be a better option. For the longer term, you might be thinking about having your own garden, growing your family etc., and you might need more space. So, decide what is important and valuable to you. Talk to people who live in the areas you are interested in and narrow down the search (preferably to the level of neighborhoods) by understanding which areas are good and which to avoid. Having seen houses in different cities will help you with this decision.
Determine your budget Schedule a free intake appointment with a mortgage advisor. You can browse around online or get a reference. You need to have a clear understanding of your income, your debts and regular monthly expenses. You don’t really need to provide documents in the beginning (even though you will be prompted to do so by the advisor). It does help in getting the correct numbers, but if your situation is not complicated, you can leave this for later. It is still good to get an understanding of what these documents are and slowly start preparing them, in case you get an offer accepted. After the initial appointment with the mortgage advisor you will know what the maximum amount is that you can loan from the bank as well as whether this is the right advisor for you. You will also get answers to the questions you have.
Go to (many) house viewings Schedule multiple house viewings. This way you will know better what you are looking for and get a feel of the different areas. You can do this on your own by calling the selling real-estate agent displayed on funda. In the current market, houses are sold like hotcakes, so you need to act fast. You will quickly start to get a feel of what you like and what you can get for your money. Try not to be a perfectionist, as the offering (at least at the moment) is limited, so when you see something you like, go for it.
Find a real-estate agent Browse around online or get a reference. Schedule an appointment with a few that seem promising and ask about their ways of working and prices.
Once you’ve found the right fit, express your determination to work with them. Some will require a written declaration, but others will directly start joining you at viewings and providing their services.
Understand the bidding process Once you’ve found a house you really like and are interested in buying, you need to understand what the bidding process for that house is like. Ask the selling agent how it works. There are generally two types of bidding — one is with registration (‘inschrijving’ in Dutch), where they wait to collect as many offers as possible until a given deadline and then select the best one. The other is with immediate offers, where they select the first good offer they get and either directly accept it or try to negotiate. You will not know what others have offered for the house, so discuss with your real-estate agent what kind of strategies you can apply.
Discover the market value of the house The asking price does not always correspond to the market value. This is important because of the mortgage — you can only loan 100% of the house market value (and for recent expats this can be less), so if you bid higher, you will have to put that extra money from your own savings. It’s also relevant so you know what is sensible to bid. If you have a real-estate agent, they will tell you the approximate market value. If you’ve decided to go solo, check the land registry to get information on the local house prices (you will need to pay a fee).
Place the offer The offer is done by your real-estate agent, if you have one, or by you, if you don’t. When you place a bid, regardless of the chosen method and regardless of whether you or your real-estate agent does it, you will need to provide: The amount you are offering. Your conditions. The most common conditions are a) a successful mortgage application within 5 weeks and b) a successful technical inspection. That means that if you are not able to get a mortgage in the specified time or the technical inspection is not to your satisfaction, you can pull out of the agreement with no consequences. If you are putting a down-payment on the mortgage, it’s good to mention the amount. Whether it is a final offer and if so, whether it has an expiry (e.g. 24 hours). This is often necessary for the offers without registration. The date when the hand-over of keys will take place, i.e. when you will officially become the new owner. What you would like to keep from the ‘list of things’. This is a list the seller provides beforehand where they list the movable objects that can be overtaken. The seller will evaluate all of these aspects of the offer, but the amount will be the most important. However, those who don’t have the mortgage application as a condition in their offer will stand a higher chance (these are usually people who do not need a mortgage). Wait out the excruciating time to get a phone call and know if your offer is accepted or not.
The documents Once your offer has been accepted and you’ve gotten over the initial shock, you will need to get your focus back in order to collect all the necessary documents and organize the following events in parallel.
Schedule the final inspections There are two main inspections that need to be performed by external parties: a technical inspection (advisable to do) and a valuation (official appraisal report on the house market value, necessary for the mortgage). These two together cost around €800. If the technical report is not satisfactory or exceeds a certain amount necessary for repairs, you can pull out of the contract with no consequences, provided that you had stated this as a condition in your offer.
Sign the purchase agreement Nothing is binding until you have signed a purchase agreement. The seller can change their mind until the moment they sign the agreement. The buyer can change their mind until 3 days (including at least 2 working days) after the day you sign the agreement without any consequences. The agreement is prepared by a notary of your choice. If you don’t have a notary, you can ask your real-estate agent for suggestions — they have people they regularly work with and can get discounts. If you don’t speak Dutch, you will need an official translator. The costs are around €1500. The agreement will include all the conditions in your offer. For example, if you agreed to the mortgage condition, it will be stated that if you are not able to get the mortgage within a specified time frame (often 5 weeks), the contract will fall through.
Apply for the mortgage Now you need to supply all the necessary documents to your financial advisor. These include the appraisal report and the purchase agreement, as well as personal information of both you and your partner (if you are applying together), including bank statements, payslips and an employer statement. Schedule an appointment with your advisor for the final discussion and selection of the best mortgage for your circumstances.
Once the mortgage has been approved, you can prepare for the execution of the final steps.
Arrange transfer of the deposit Before a deadline specified in the contract, you need to pay a deposit consisting of 10% of the purchase price. The notary will arrange this transfer. This is insurance for the seller in case you decide not to go through with the transfer of ownership. If that happens, they will retain this sum. This is of course a lot of money, so if you don’t have that lying around, you need to get a so-called bank insurance. For about €450, the bank guarantees that they will pay the 10% to the seller if you back out of the contract. If that happens though, that money turns into a bank loan that you will need to repay.
Arrange insurances Home insurance is mandatory to be able to get a mortgage and this needs to be valid from the day of transfer of ownership, so you need to arrange it in advance. The insurance of the content of the home is optional. Other insurances include life and disability insurance, which are relevant and sometimes mandatory for the mortgage. You will have discussed this with your advisor.
Get the keys When the date of transfer specified in the initial agreement is reached, all involved parties will go to the notary to sign the transfer of ownership contract and hand over the house keys.
Execute the payments The mortgage that you have been approved previously will now be executed through the notary, as will the payment of the transfer of ownership tax (2% of purchase price) and all other outstanding invoices, e.g. the real-estate agent and mortgage advisor (payment for the appraisal and technical inspection can also be arranged through the notary). You are now in major debt, but you are a home owner, congratulations! Time to renovate (if necessary), buy or rent furniture and move in.