Buying A Home In Netherlands
Overview for expats of the process of buying a home in Netherlands, whether it be a house or apartment, including where to find property listings, working with an estate agent (makelaar), making an offer, energy labels, titles and deeds, costs involved and related Dutch terminology.
FINDING A PROPERTY TO BUY IN HOLLAND
A potential home buyer in Netherlands should start by having their financial position reviewed by a mortgage advisor (or lender) to determine the maximum amount of home loan you qualify for. This will help edit down the list of potential properties to consider and how much room you may have to negotiate when the time comes.
Property sellers in Holland typically employ the services of a real estate agent (‘makelaar’) to market it and manage interactions with potential buyers.
Homes for sale (‘te koop’) are advertised online, on information cards placed in the window of agents’ offices, in local newspapers, plackets on lawns or signs hanging from windows.
Dutch property may be freehold (‘vrij leen’) or leasehold (‘erfpacht’). Many city center flats are leasehold. The terms of the ground rent may impact the amount of home financing that can be secured from a bank.
Once a buyer finds a property listing that meets their requirements (location, number of rooms, price range, etc.), they will want to view it in person. If the buyer is working on their own (not with a makelaar), they should contact the selling agent directly to set up a viewing appointment. The prospective buyer should make very clear they are not engaging the selling agent’s services to find them a home, but rather inquiring about the specific property for sale.
Expats interested in buying a house or condominium in Netherlands generally do work with a local makelaar to handle the property search, selecting only those that match their client’s parameters. If the potential buyer is interested, the makelaar will arrange a viewing.
The benefits of working with an agent include
- Saving the client time;
- Potentially learning about a property before it becomes available publicly;
- Simplifying the overall home purchase process for buyers who do not speak Dutch;
- Gaining personal insight to neighborhoods (‘buurten’) or streets based on the agent’s knowledge. This could include problem issues such as excessive noise, frequent thefts or burglaries, limited street parking, traffic congestion at specific times of the day, etc.
However, such benefits must be weighed against the agent’s fee which generally range from 1-2% of the purchase price.
Potential buyers who prefer to operate on their own without the services of a Dutch real estate agent should be extra vigilant when considering flats and apartments in multi-unit buildings. The building may be under the control of a housing authority that has additional regulations and approval clauses which must be satisfied before the unit can be occupied by a new owner.
Dutch properties advertised with the words ‘kosten te koper’ shown next to the asking price means the buyer pays closing costs. Newly constructed properties may be offered ‘vrij op naam’ which means the sales price includes closing costs.
Properties for sale in the Netherlands, including Amsterdam, Rotterdam, The Hague and Utrecht, can be found on websites such as Funda.
MAKING AN OFFER ON A DUTCH HOME
Once a buyer has found a property they wish to purchase, the first step is making an offer. Under Dutch law, a home buyer who makes an offer and later withdraws it because they could not secure financing, can be held liable for up to 10% of the offer price as a penalty. To avoid this the offer must include the provision “subject to loan approval”.
A written offer is made through a Pre-Sale Agreement (‘koopovereenkomst’) which will be initiated by the selling agent and drawn up by a Dutch notary (‘notaris’) for both parties to sign. The buyer and seller commonly use the same notary to save on paperwork and processing costs.
In the Netherlands there is a mandatory 3-day cooling-off period which allows either party to withdraw from the purchase agreement without penalty. Once the 3 days has passed, the notary begins processing the contract of sale and sets a closing date.
If completion of the property sale is projected to take longer than 2 months, the buyer may be requested to pay a 10% deposit upfront (which would be included in the purchase agreement at the time it is drawn up).
The buyer (or designated representative) is expected to complete due diligence in relation to the property including research into any planned developments in close proximity or municipal restrictions regarding changes allowed to the property.
To secure a mortgage, the buyer will need to arrange for a property valuation which is carried out by a certified Dutch appraiser (approximate cost €300). This takes place after the signing of the pre-sale agreement and well in advance of the closing date. The valuation is then provided to the bank in support of the mortgage application.
A ‘valuation’ is different from a ‘home inspection’, which may or may not also be required by the lending institution prior to approval. An inspection is completed by a person specialized in construction, who looks at the integrity of the property, including the condition of the foundation, support beams, chimney, perimeter walls or fences and other permanent structures built on property grounds. The cost is approximately €420.
In the Netherlands, there is a Dutch National Mortgage Guarantee scheme referred to as NHG. If the buyer qualifies for this type of loan, the organization will offer a safety net in the event they are unable to pay their mortgage due to extreme circumstances (such as losing a job or getting a divorce).
Since 2015 all residential properties in the Netherlands being sold or rented must have a valid energy certificate classifying its efficiency. The energy rating must be shown in any advertising or marketing materials for the property being sold. The seller turns over the energy certificate to the buyer when the sale closes.
COMPLETING THE PROPERTY PURCHASE
On closing day, the estate agent can (if requested) supervise a final walk through of the property by the buyer to ensure nothing has been removed that was originally agreed upon to stay and to take meter readings.
The makelaar will normally accompany the buyer to the notary’s office for the signing of the transfer deed. Once the document is signed by all parties, the buyer officially owns the the property. The notary will then contact the appropriate agency to have sales and new owner recorded in the official land registry.
The costs associated with closing a home purchase in Netherlands include:
- transfer deed drawn up by the notary (approximately €600),
- mortgage contract completed by the notary (approximately €600),
- transfer tax (2% of the purchase price),
- mortgage advisor’s fee (generally between €1500-€4000),
- buying agent’s fee if one was used (approximately €1750),
- translator’s fee if one is required at the closing (approximately €200)
Related information…