If you’re tired of flushing your money down the toilet every month (renting an apartment) then being the shrewd individual that you are, you’re probably thinking about buying a property. If that’s the case, then this article is definitely for you. Learn about what’s involved in buying a property in the Netherlands from a real estate agent that has been helping expats buy homes in the Netherlands for over 16 years.
Hi, I’m Barry Burgemeester. I founded Burgemeester Vastgoed 16 years ago to help expats with buying property in Amsterdam, Utrecht and the Netherlands in general.
Home ownership in the Netherlands
In the Netherlands, It is only really since the 1960’s onwards that home ownership became a reality for large numbers of people.
We live in one of the most densely populated countries in the world and demand outstrips supply which has often led to high prices. The Economic crisis of 2009 led to decreases in property values, but since 2014 this has reversed and now prices are back above pre-crash levels. Property prices have been increasing in Amsterdam by 10 to 15 per cent a year, leading to some people concluding that this is another bubble, but demand is still strong and supply isn’t catching up.
It used to be the case that buying for less than three years was a bad choice financially. However, with high rental prices, purchasing a home is a good decision especially while interest rates are still so low.
Here is an overview of the purchasing process for buying a property.
Finding Property to Buy in the Netherlands
Once you have a good idea about your financing options for purchasing a house, you can start looking for a property.
Property for sale is most commonly advertised with the help of an estate agent (makelaar). This may be online (Funda), in a shop front, in the local press or with a board outside a property.
Of course, you need to know where to live based on your work and for parents school commitments. If you already know the area you’d like to live in then great. If not here is a handy guide to neighbourhoods in Amsterdam by the team at Iamsterdam.
Of course, price will also be a factor and that too is affected by the neighbourhood you’d like to live in. While we’d all love to live on the Herengracht in the Jordaan area of Amsterdam, the prices for similar sized properties in Utrecht will be a lot cheaper.
If you’re not sure of where you’d like to live, but already have a budget in mind, this is something we can help you with at Burgemeester Vastgoed.
Property may be freehold (vrij leen) or leasehold (erfpacht). Many city apartments are leasehold. The terms of the ground rent may put limitations on the amount that can be raised as a mortgage to purchase such properties.
Having seen an advert for a property you’re interested in the next step is to view it. It is very likely that the prospective buyer will have to make an appointment with a real estate agent to view it. Be very clear that you are not engaging their services to find a home (unless this is what you want) but simply enquiring about a specific property or properties that they have advertised.
It is common to work with an estate agent (makelaar) and to let them do all the legwork. This has advantages such as saving time and getting to see properties before they are officially on the market. But it does mean paying a fee equivalent to one or two per cent of the eventual purchase price (plus BTW, Dutch Value Added Tax).
If looking for a property without an agent, be vigilant with apartments. Some are under the control of a housing authority with its own regulations. They must give permission before the property can be occupied – even if you own it!
•Kosten te koper means that the buyer pays the costs
•New build properties may be advertised vrij op naam which means that the price includes costs
The Offer and completing the purchase
Once you have found the home of your dreams, the first step is to make an offer. This is why you need to have the financing in place as if you retract your offer, you can be liable to pay a penalty.
Therefore any offer should be made with the proviso “subject to raising the finance”. In the current market, cash buyers are seeing more completions. Subject to offer depending on financing arrangements is quite normal and gives you several protections.
A written offer in the form of a Presale Agreement or Contract of Sale (koopovereenkomst) is a purchase agreement drawn up by a lawyer and must be signed by both parties. Buyer and vendor will normally use the same lawyer (notary) which saves on cost and paperwork.
A three-day cooling-off period is allowed for withdrawal without penalty. Once this three-day period has passed, the notary will receive the contract of sale and will then set a date for completion.
- If completion is likely to take more than two months the buyer may be asked to pay a ten per cent deposit at the time that the purchase agreement is signed
- The purchaser (or their representative) is expected to consult development plans and possibly other public restrictions
During the time between the signing of the Presale Agreement and the agreed date of completion the buyer’s representatives will normally need to undertake a valuation (for mortgage purposes) and there may be further inspections of the property.
A Transfer Contract (akte van levering) is signed by both parties on completion. The lawyer registers the details with the relevant authorities.
On the day of completion, the estate agent can (if required) supervise a final inspection of the property by the buyer which may include taking meter readings. The agent normally accompanies the vendor to the lawyer’s office for the signing of the transfer deed. As soon as this deed is signed the ownership of the property transfers to the buyer. The notary will register the change of ownership with the land registry.
Using an Estate Agent
Information about the estate agents, or property agents, who manage the transaction on behalf of buyers and sellers…
The Dutch word ‘makelaars’ means estate agent and they ‘make’ the purchase or sale happen. You are not obliged to use one, but as an expat buying property in a country whose national and local laws and property bylaws you might not be familiar with, it’s always best buying and selling with a real estate agent.
Many individual agents also have websites where prospective buyers or sellers can give their details and initiate property searches or valuations.
They are not charities of course, and you will have to pay for their fees as a buyer or a seller as you are using their advice. Other options, such as house hunters are available.
If you’d like more information on buying property in the Netherlands please feel free to contact me.