Anatomy of a Bid: An Expat's Guide to Amsterdam

It's no secret that to buy a property in Amsterdam, you're going to need the winning bid!

If you’re in the market for a new home in Amsterdam, you’ve probably heard about the bidding system. Essentially, sellers will plan a number of viewings of a property and set a deadline by which interested parties must provide their best bid. You might think that the highest bid will always win, but that’s not always the case.

Sure, overbidding has become the norm – so much so that it happened on approximately 80% of transactions in 2021 – and the higher you bid, the better chance you have to win the bid. But there are other things involved, too. 

Property prices and your bid

If you’re working with a real estate agent, they will help you decide the best bid and resolutive terms for you and the property you’re bidding on. The first and most important thing to know for sure is that you’re serious enough about a property to pay a little more than you had expected to.

In order to win a bid, you need to know what the value of the house is, what properties with the same perks and in the same neighbourhood have sold for recently, and what you’re willing to compromise on. 

Often, the value of the house has more to do with the actual market than with the property itself or its WOZ value. If a similar property with the same square meterage, similar location, and was built at the same time had an asking price around €585,000 and sold for €615,000, it’s likely that you will have to be open to making a similar bid. 

Most importantly, how you decide on a final number for your bid will depend on the maximum mortgage you are approved for, competition (which is especially high in Amsterdam), and ultimately what the seller wants for the property.

What to include in your bid

What you eventually send to lock in your bid can be boiled down to two points: 

1. The actual bid (in €)
2. Your suggested resolutive conditions

What are resolutive conditions?

Have you ever been on Funda and seen the words “Verkocht onder voorbehoud”, or in North American terms, “Conditional sale”. This means that, in order for the sale to go through and the contracts to be signed, both parties have agreed upon a few terms. It’s important to define your conditions in your bid so the seller has all the information they need to make a decision for the sale of their property. These conditions will come into play when your bid is accepted and you’ve signed your purchase agreement. Let’s go through the four types of resolutive conditions as defined by ABN AMRO: 

“Subject to securing financing”

This resolutive condition is preferably capped no later than 4 weeks after the bid is accepted. It’s no secret that there are a lot of details that need to be combed out before you are approved for your mortgage. You’ve probably already had a conversation with a mortgage advisor by now and have chosen the lenders you’re most interested in. Once you’ve made that decision, you need to have the property appraised by a professional in order for the mortgage lender to confirm the loan-to-value and the size of your mortgage. It’s important to mention not only that you will secure financing, but how much financing you expect to secure. Should you fail to get financing in the time agreed upon in this clause, the sale will be nullified. 

“Subject to satisfactory inspection”

With so many older homes in Amsterdam, many over 100 years old, it can be a good idea to add this resolutive condition to the sale. A technical inspection, or “bouwkundigekeuring”, gives you a detailed look at the technical specifications of the property. If there are any unexpected deficiencies in the property, you can cancel your purchase.

“Subject to defects not exceeding x amount”

Some deficiencies may not be cause to cancel your purchase. You can set a maximum repair cost with this resolutive condition. This price will be provided in your technical inspection. If there are defect but the repairs will cost less than say €3,000 and you’re willing to do them yourself (or hire a handyman, of course), you can choose to continue with purchase. 

“Subject to transfer date”

The agreed upon date for the transfer of the house will be included in the contract. The purchase will be cancelled if the seller cannot adhere to the date agreed upon.

The bottom line

The bidding process can be really intense. And you may have to go through it many times before you actually submit the winning bid. But what’s important is that you have all the information you need and that you are confident in the choices you make. When the price, resolutive conditions, and time is right, you will be screaming from the rooftops that you just won the bid on your dream property!

If you’re ready to talk about your finances and the possibilities for a mortgage, contact me for a free consultation.