When you plan to buy a home here in the Netherlands, you end up reading a lot about it but may find that a lot of them are meant for expats but do not fit the situation sometimes. So, I thought why not pen down specifics for Expats who are looking forward to buy a home here & have very peculiar situations – single earning hand, not with a local contract or sometimes one of the two in a couple is with local contract while the other one is on deputation or you want to have an option to rent your home if you no longer can live here. Many things change from the book-ish knowledge when you are in-the-field; I hope that you find it useful. Do not hesitate to ask your questions in comments section, like & share this if you find it helpful.
Caution – this can be a long read! I am dividing it into sections; you can jump to the one which matches your current stage of house hunt.
Section 1: First Baby Step
Before you even start, the first seeds of the thought of buying a home
What are insurances for? They may seem like waste of money unless you are in a situation where you actually need it – big help, big savings! I strongly suggest that you buy a Home Legal Insurance, at the first thought of buying a home here.
Question: Why so soon when I am not even sure?
Answer: Because there is a cooling period (or say start period) clause for all legal insurances here. Any disputes coming in first 3 months or thereafter but found out to have origins before the start date of your insurance are not covered. Only the cases which occur after first 3 months are considered to be new (companies want to avoid situation where clients foresee something & that’s why they buy legal insurance). So, start now & don’t worry about those few bucks, they are worth it.
Question: How does it help my house hunt?
Answer: It doesn’t. BUT, it takes time to buy a home. You will find the right one, win the bid, apply for a Loan, sign the contracts & may even face disputes on the way. May be, at the day of key handover, when you finally inspect the home, you find that the home is not in a condition that was promised to you, what would you do? Yes, legally you can reschedule the key handover and ask the seller to fix the situation but you might have your last date in your current (mostly rented) apartment already. As much as the seller is eager to sell, you are also eager to move-in. There could be other disputes also, may be during the move with the moving company, with your neighbors or anything that could go wrong. So, better be safe than sorry.
Question: Should I hire a Makelaar or can I place bids on my own?
Answer: Yes and Yes! Yes, you should hire a Makelaar but you can also place bids on your own. But why do you need a Makelaar then? Firstly, they look at the house as a commodity for you, while you look at the practical use of the space and neighborhood; they look at it from value-for-money perspective, other houses sold in the locality, expected expenses in near future, possibility of appreciation etc. etc. That’s what we all know but also comes an ease with translating all the documents from Dutch to English (they can explain to you, even if you think you know enough Dutch, they are more well versed with the clauses, legal terms and fine prints v/s standard verbiage). They also take off a lot of headache compared to when you have to deal with the selling Makelaar, especially when things are going south. They will do the negotiations & follow ups on your queries & when the seller is not keeping promises. It also helps in cases where you want to buy some interior/furniture of the house from the seller (be default, you get it unfurnished).
Question: Any other tips?
Answer: You get 15 minutes to look at the house. I find it too less to make such a big decision. I suggest that you go first, & if you like it, plan another visit with your makelaar. That way you get enough time to really observe the building. Do not get swayed by the photos on the websites or by seeing it during the visit. Selling Makelaars make sure that they put the best edited pictures & best settings for your viewing. Look at the map & layout – you will not get anything with the house that looks good now, all the furniture, lights, decorations etc. will be gone. It’s hard to ignore them & imagine the house, but you have to do it that way. Focus on the map.
Section 2: Placing the Bid
Either on your own or via a Makelaar
The general vibe is that the market is very competitive; you need to bid high to secure your win. Well, it’s not untrue but don’t just place the bid to win it. Look at the historical prices of the house, through WOZ value website & see the price increment trend. Seller would try to cash-in the next year’s WOZ value at the time of selling. The bids, usually, go even a notch higher. From that, you can get an idea how much to bid for (plus the advice from your makelaar but within makelaar fraternity, they may also try to sell it a higher price, the commissions are based on that & friends do favor, right? I am not accusing them of unfair play a possibility cannot always be ruled out. However, it can also turn out to be a good thing – it helps you secure your bid if the makelaars know each other/have great working relation). Also, be aware of the handover date of the house, if it suits you or not (usually, houses are sold 3 months in advance of the handover date).
Question: How to place an offer, what to write in my email?
Answer: Good question. It is more than just the bidding amount. Mention the conditions that you have (yes, you can have them), like – you need time (say 4-6 weeks) to get the loan & it is possible that you are denied (but my Bank said I am eligible, I know I will get it – I cover the details in next point*). Your wish on the handover date & (especially if the construction is old) a clause of Technical Inspection (possibility that there are faults, leaks, repairs needed that you missed noticing, internal leaks etc. which can be really costly). Although, it is unconventional, but I suggest that if possible, try to add “professional cleaning” clause, like you do for your rental home. Do not be surprised later because it is only expected to leave the floor vacuum-clean. You may find lot of rubbish when you open the drawers, oven bottoms, corners, etc. esp if you are buying the furniture also (behind them lies a lot).
Question: *What did you say about Loan rejection?
Answer: Okay, I know that you would have connected with the bank (usually the one where you hold an account) & they told you that you can get the loan, 2 types of loan & based on your salary slip – the amount for which you are eligible and the possible installments. When you hire a Financial Advisor after winning the bid (probably a different one than your bank), you will talk about a lot more conditions for applying a loan and the picture will change. There is a lot of paperwork & always a risk that you face complications, esp. with the following common options:
- If you do not have a local job contract
- If the employer statement does not mention the necessary fields as the Lender wants
- The contract is for a definite period only
- If you want 100% loan or less (75& to 95% being most common)
- The valuation of the house. Max possible loan = valuation of the house (if it’s less than your bid amount, then you have to shell out extra money from your pocket)
- Do you see needed renovation expenses, then you may want to add that to your loan amount
- If it is for rental purpose only, it costs extra, also if you want a condition in your loan that you can rent it in future
- For energy label A, there is additional discount in the loan payments
- Valuations within NHG range see cheaper loans & more financers
Section 3: Something that everyone tells, almost
Things I will not cover here in detail, there is plenty already on the net
The most common points that you read on the internet or get information about, from your friends are also the ones that I will not cover in details here, but of course, please feel free to ask me, I will reply:
- Types of Loan
- Cost of Makelaar and Financial Advisor
- Where to borrow money from – Banks to Financial Institutions
- One time additional costs (transfer fee, taxes etc.) & about Bank Guarantee
- Signing the Deal
- Life Insurance, esp. to cover for your Loan in case of an untoward happening
- Moving Services
Section 4: Let’s talk about 2 more things
The ones which are not clearly mentioned on some sources
Technical Inspection step: This is important, there is a lot unseen by you by a technical inspector will look at. A few examples are electrical wirings & earthing connections, drainage and plumbing, strength and health of the construction esp. wood parts, emergency/maintenance things like crawl space. Even if you don’t want to add it your clause/condition for bidding, I highly suggest that you get this “check up” done and know your “would be house”. Any immediate repairs must be carried out. I strongly recommend that you witness this inspection, you will learn a lot about your house.
Freehold v/s Leasehold: Not all lands come with the house, it depends on where it stands. In 4 big cities especially, it is possible that the land is on “lease” and payments must be made till the time it becomes “free hold”. There is a possibility that the lease amount is paid but the formality is not yet done to make it freehold. Keep this in mind, also to make sure that you do all formalities at the time of buying rather than making rounds at the Notary & Gemeente later, to avoid hassles & double costs.
Section 4: The specifics
Quick Fire Round
Question: I am with one income only, besides looking for a cheaper area, what is the best bet?
Answer: Go for NHG, it is revised with inflating prices. It was 290K in 2019, shot up to 310K in 2020 and is set to be 325K in 2021
Question: Do I “have to” overbid to secure my chances?
Answer: Definitely NO, look at the value for money & your budget (installment being no more than 25% of your monthly gross). I have once “underbid” also (many people do that, you can still be the highest bidder). Remember, not everyone who sees the house, places a bid.
Question: What about Job Contract situation, how does it affect me?
Answer: It is really hard to get a loan if you are on “deputation”. It would help that you get “salary” here & not something under “allowances” head. Additionally, you would need to tick all the boxes is your Employer Statement for the Bank to have confidence in you.
If you do have a Dutch Contract, Lenders prefer one with “indefinite period”, otherwise, a supportive employer statement (yes, it plays an important role, always)
Question: I see some important Renovation to be done, can I ask for that amount in my Loan?
Answer: Absolutely, as long as it is not cosmetic. Like a 10 year old kitchen, a leak, or rotten wood of the Dakapell. The Lender will estimate the return on investment, or say, the appreciation in the price of the home after that renovation & will grant you proportionate amount (not all will be granted, you will have to put your own money, usually 40%). It is reserved in your mortgage account & is used when actual work is being done (either to pay the bills or to ask for reimbursement after work is done)
Question: More question?
Answer: Glad to answer as much as I can. Please drop your questions in comments or ask for my contact details should you wish to connect (only helping you out, no commercial interest).
Please note that these are my personal views & may differ from experiences that different people may have. Some of the information is dynamic & might change with time. Some of the things also change on case to case basis, but this should help you prepare on a broader level anyway.
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