15/06/2022 by Team Concepts 0 Comments
5 ways to prepare for bidding on a property
It's no secret you'll have to bid on your next property in Amsterdam. In this article, we’re sharing some tips when preparing to bid on a property.
The housing market in Amsterdam is piping hot right now. There are fewer properties for sale in the municipality than in the last few years and still a large number of buyers on the market. This supply and demand issue means that you have to be quick on your feet and willing to pay top dollar for a property.
If you’ve been paying attention to the market at all in the last year, you’ll know that the asking price is just a starting point, on average properties are selling at about 12% more than asking. The most common procedure is through a bid. The selling agent organizes viewings over the course of a few days to a week. They set a date and time for interested parties to submit their best offer for the home including price and condition. This can be a daunting process, but there are many ways you can prepare for it.
Get your finances in order
One of the best ways to show a seller how serious you are about buying a property is to make sure you have all your finances in order. Getting in touch with a mortgage advisor when you’re first starting to think about buying a home is an essential step! Your mortgage advisor will help you assess your personal finances including salary, monthly spending, savings, etc. With this information, they can calculate your maximum mortgage. This is valuable information once you start looking seriously at properties!
Know what you can spend
It’s important to know that the asking price of a home is always just a suggested starting point. As mentioned above, you can expect to offer 12% or more than asking in order to win the bid for the property.
Mortgage lenders will look at the value of the property based on the property assessment by an approved appraiser. This can have a big impact on your finances! Since the maximum mortgage you can be approved for is based on the loan-to-value of the property, you need to be prepared to bring in your own cash. Especially since there are many costs associated with buying a house such as transfer tax, real estate agent fees, notarial costs, etc.
Here’s an example of what you can expect:
Winning bid = €670,000
Property value = €615,000
Maximum mortgage = €615,000
Buyer’s own investment = €55,000 + extra costs
Hire a buying agent
In today’s market, buyers are taken more seriously when they provide their bid through an agent. This is a signal to the sellers that the buyer is taking the process seriously and have all the information they need in order to make an informed decision. Having an experienced real estate agent on your team is a huge asset for expats who are unfamiliar with how the bidding and buying process works in Amsterdam and The Netherlands in general.
Hiring an agent does come at a cost, but shouldn’t be more than one percent of the purchasing price of your new property. Don’t hesitate to shop around until you find someone that you really click with! This is a big investment and ultimately can make all the difference for a winning bid on your next home.
Have an honest conversation
One of the best ways to know what a seller wants is to simply have a conversation with them. Don’t be afraid to ask how much they want to get for the property or if there are any conditions they would like a buyer to meet, like a quick close or specified moving date. Having this information helps you make an informed decision about whether a property is right for you.
Selling a property can be just as emotional as buying one. Try to share some information with the seller that gives them an idea of who you are and why this property was made for you. Perhaps this was the neighborhood you stayed in when you first came to Amsterdam and have fond memories here. Or maybe your (grand)parents live just a few streets away. Providing these little details lets a seller know that buying the property is filling a gap that only this property could fill.
At the end of the day, you want to make a good impression on the sellers of the property you have your eye on, whether it be with financial preparedness or a personal story. Are you thinking about buying a new home? Curious about what size of mortgage you can be approved for? Email Arjen at email@example.com today for a free consultation!