Buy a house in Amsterdam
You would probably like to know what your possibilities are to buy a house in Amsterdam.
To help you in the best way possible, we will give you all all the necessary information about the process of buying a house in Amsterdam.
The Dutch housing market is characterized by low owner-occupancy and the biggest social housing sector in Europe.
Just over half of the housing stock is now owner-occupied.
Buying a property is now cheaper than it used to be a couple of years ago. Before 2013 you would pay between 10% to 12% cost of the purchase price. Since 2016 these costs have reduced to +/- 4% to 5%.
A big influence of these lower costs was the reduction of the transfer tax from 6% to 2% of the purchase price.
Buy a house in Amsterdam
The house market in Amsterdam is different compared to the rest of the Netherlands.
Amsterdam has the most dynamic housing market in the Netherlands.
The market is relatively tight in Amsterdam and the homes are often sold quickly.
It often happens, that when a house comes on the market, during the first days there are over 10 to 20 interested people who will make a bid on the house. This putts a lot a pressure on the sales price.
The houses in Amsterdam are nowdays sold thousands of euro’s above the asking price.
The numbers of inhabitants of Amsterdam is expected to grow during the next 10 years.
The number of new houses build will not answer this demand.
In the future we expect higher house prices and higher rent prices.
If you want to rent out your house in Amsterdam, you have a good chance to quickly find a tenant and get a rent that is profitable.
If you have decided to buy a house you wil have to go through a time-consuming purchasing process.
This process involves many third parties, like the real estate agent, the mortgage advisor, mortgage lenders, tax advisor and the civil law notary. You might well lose track of the proceedings at a certain stage of the process.
Expats Amsterdam is a specialist in the process of buying a house in Amsterdam.
We helped many expats in the process of buying a house and finance this with a mortgage.
We can guide you through the whole process of buying a house.
We ensure you, that you do not need to worry about foreign language, local practices or legal issues.
To better understand the process of purchasing a property we made a plan of action:
Step 1: Orientate
In the very beginning it is crucial to decide, if you choose to rent or buy a house.
Much will depend on your financial situation, personal needs and the expected length of stay in the Netherlands.
Both renting and buying have their advantages and disadvantages.
Step 2: Financial Possibilities
Before you start looking for a suitable house it is advisable to speak to a mortgage expert.
That way, you can find out which price category best fits within your budget and what your monthly mortgage payments and other accommodation expenses will be.
The amount you spend per month on housing will consist of more than the interest and repayment of the mortgage.
You will pay for:
Interest and repayment
Every mortgage broker has different interest rates.
If you want to see the current interest rates from various mortgage brokers click here.
The interest rate of a mortgage broker depends on:
– The ratio between the market value of the house and the amount of the mortgage loan;
– The interest margin required by the bank to cover the risk increases in keeping with the percentage of that ratio;
– The period for which the interest rate is fixed;
– Does the National Mortgage Guarantee (NHG) apply yes/no
Each mortgage broker also has rulings for the amount you can repay per year.
Besides the normal repayment sheme you can choose for, you can do additional repayments at the mortgage loan.
This is maximized to a percentage of the mortgage amount. This varies from 10% per year to pay back the full mortgage at any time.
It is often required to take out a life insurance connected to the mortgage.
In that case, the mortgage will be (partially) relieved so that your heirs will only have to pay the monthly housing costs.
Your heirs will be able to continue to live in your home and the mortgage provider is assured of the monthly mortgage payment.
Household contents insurance and residential premises
To protect your house and your belongings against fire, flood and theft you need an insurance.
The amount of the premiums will vary for each house and are approximately € 25 per month.
Gas, water and electricity
The monthly cost of gas, water and electricity depends of course on your consumption.
It is determined by the number of people living in the apartment, as well as the home energy efficiency.
Municipal taxes and waterboard
Each property owner must pay annually for the cost of municipal charges and the cost of the water board.
Examples of municipal charges are:
– property tax
– sewage and waste disposal
– construction fees
Each city have their one costs, calculate your municipal charges here.
Examples of the water board are:
– purification of waste water
– maintenance of streams and ditches
– water system for house owners, depending WOZ value
The water board charges vary by municipality.
Step 3: Find a house
If your wishes and financial possibilities are clear, you can start a specific search for houses.
There are several ways to find a house:
Using the internet is a very easy way to search for houses that are for sale.
There are numerous websites where you can search for houses:
Real estate agent
You can hire a real estate agent that will help you search for a house.
The disadvantage is that you have to take into account the fee for the services of the real estate agent.
An important advantage is that a real estate agent probably can get you a better purchase price by using his knowledge and experiences.
He is aware of the legislation and can help you to reduce the risks of hidden breakups.
Houses are also available through auctions. These houses belong to homeowners, who can no longer pay their mortgage.
The mortgage broker can decide to sell the house on a foreclosure auction.
A house that is sold on an auction can often be bought for about 60% to 80% of it’s actual value.
Step 4: Negotiate
If you have found a house you would like to purchase, then the start process starts of negotiating the purchase price.
At this moment we are in a sellers market (there are more bidders then houses available).
This means neogotiating about the price is rare. In most cases you need to make one proposal for the price with many other interested people. We expect that the sellers market will continue for the coming 5 years.
You can negotiate and bid yourself, but you can also use an expert, for example a real estate broker.
If you decide to negotiate yourself, it is wise to read the text below.
Investigate if the asking price is realistic
There are a couple of options to do this.
Cadaster / Dutch Land Registry Office
You can retrieve sales’ data of the house(es) in the neighborhood from the Land Registry Office for a small fee.
This way you will get a good idea of the value of the house.
You can apply for it through the website of the Dutch Land Registry Office.
Study the supply of housing in the neighborhood through internet.
This way you can compare similar houses in the neighborhood.
You can also see how long the house has been for sale, because the longer, the more chance you have to get a good price.
If it is too difficult to figure out the real price on your own, you might consider to ask for a valuation report performed by a broker.
A valuation report calculates the actual economic price of a property.
The cost of a valuation ranges from about € 350 to € 550.
Regulatory and planning
Observe regulations and planning of the local government.
If you are interested to buy a particular house, it’s a good idea to check whether any special rules might apply.
It is also possible, that the municipality has plans for the neighborhood or district where the house is.
Negotiate – do it yourself or not ?
After the investigation, you will know what the house is worth in value and what you want to pay for it.
Now you can start with the bidding process, which goes through the real estate agent of the selling party.
Determine in advance what is the maximum you’re willing to spend, so you know when further negotiations become pointless.
Some people treat negotiation as a sport and for others it is the worst thing to do.
If it is not your kind of thing, it is wise to let somebody do it for you.
A good negotiator will often get a lower price and better conditions.
The negotiator can be a professional, such as a real estate agent, but it can also be someone nearby you (friends/family)
who is skilled in negotiating.
Step 5: Sales contract
After successfully completing the negotiations, it’s time to put the conditions into the sales contract.
It contains, among others, the date of transfer of ownership, the agreed price and conditions precedent.
The sales agreement, the seller and buyer, is a “temporary contract”, because you can cancel without reason and cost within three days after signing it. After this “cooling-off period”, the contract becomes final.
The period of three days is a statutory minimum, but the buyer and the seller can decide on a longer period.
Make sure that the contract includes the conditions precedent, so that you can cancel the contract under certain circumstances.
Important conditions precedent are:
Getting a mortgage
If you do not get the mortgage before a certain date, you can cancel the sale without a penalty.
Normally you are asked to present 2 rejections from a mortgage bank to prove you can’t get a mortgage and therefore, don’t want to proceed with the purchase.
Not eligible for National Mortgage Guarantee (NHG)
If you can’t get a mortgage with NHG you will pay a much higher mortgage rate.
If you only want to buy the house with the benefits of NHG, you should cancel the contract without a penalty.
Outcome architectural inspection
As a buyer you are dealing with a duty to investigate.
Especially with older houses (before 1950) you want to be sure, that the house is in the condition you expect.
The inclusion of a architectural inspection is therefore highly recommended.
The contract can be cancelled without cost when a certain amount of defects have been discovered.
Step 6: Mortgage loan
Now the sale is final, you will need a mortgage to buy the house within the agreed period.
Which mortgage is the best for you depends of many factors.
You have to take into consideration your wishes and plans for the future as well as the mortgage rates, flexibility and tax situation.
You will discuss it with the mortgage advisor in order to choose the mortgage type, fixed mortgage rate, cover risks, which mortgage provider, and so on.
For more information about the different mortgage types click here.
Fixed interest period
You need to choose, how long the interest rate will be fixed.
The longer you decide to have the mortgage rates fixed, the higher the rates will be.
You can choose from a fixed period that varies from one month to 30 years.
For more information about the fixed interest period click here.
You have to consider the possibility that you will come in a situation that would make it unable for you to keep paying the mortgage.
To protect you against such risks like death, illness or unemployment, you can choose to take an insurance agains them.
In the Netherlands there are many mortgage brokers where you can get a mortgage.
Mainly it’s the banks that offer mortgages. Each broker has its own interest rates, products, rules and conditions on the granting of a mortgage.
Especially for expats, there are many differences between the mortgage brokers if we look at the rules and conditions .
The mortgage advisor will help you to find the mortgage provider that is best for you.
The mortgage advisor take into account your wishes and plans in the future as well as the mortgage rates, products and conditions of the mortgage brokers.
For more information about mortgage brokers click here.
Step 7: Transfer ownership
The house will officially change from ownership at the notary.
If you don’t understand Dutch, it is required to work with a sworn interpreter.
At the notary the seller and buyer sign the deed of transfer.
After signing you are officially the owner of the house.
If you have a mortgage for the purchase of the house than you also need to sign the mortgage deed.
The buyer of the house often decides which notary transfer of ownership will take place.
Because rates can change between notary offices, it pays to ask for offers at various notary offices. You can often save hundreds of euros.
There are websites where the rates are shown of the notary offices in your area, for example www.degoedkoopstenotaris.nl.
Expats Amsterdam is an expert in guiding you in the whole process of buying a house and finance it with a mortgage.
We can guide you through the whole buying process.
Feel free to contact us. The first meeting is free of charge.