Buying a house in Sweden is tensive enough, but bidding on a house is extra stressful with the buying process in Sweden. The system in Sweden differs from ours and regularly causes disappointments. Because just when you think you have bought a house it suddenly turns out to not be the case. In this blog I will therefore explain exactly how the bidding process works in Sweden and how you can best deal with it.
Preparation and viewing
In Sweden, there are usually planned viewing days organised by the estate agent / broker. Interested parties can then view the property and have the opportunity to ask questions directly. Some estate agents also offer the possibility to ‘visit’ such a viewing day online. However, this is not recommended because you are not able to look at the details yourself. Therefore, only make an offer when you have viewed the house in question properly and are genuinely interested in buying it. Also make sure that you know for sure what the maximum you can buy or mortgage is. An offer in Sweden is not binding, but the purchasing process can sometimes go quickly and which makes it nice to know in advance how you are going to arrange the financial aspects of buying a house in Sweden.
The bidding process: How does bidding on a house work in Sweden?
After viewing a house, the bidding can begin. These bids are sent by email or text message to the estate agent, who then communicates the bid to both the seller and all other bidders. The bidding process can also often be followed online via the estate agent’s website, including the bidders and the bids they have made. Of course, the bidders remain anonymous and are displayed as bidder 1, bidder 2, etc. Interested parties in the house who have not yet bid can follow the bidding process and jump in to participate as long as the house has not yet been sold. This public bidding system makes the bidding process very transparent. After all, everyone can see what the current highest bid is. At the same time, in a bidding war, you are more likely to go beyond your limits, especially if relatively small amounts are repeatedly being added. It is tempting to keep going a step further, until you may have spent more money than you originally intended. In that respect, the bidding process in Sweden has both advantages and disadvantages.
Offer accepted, but don’t cheer too soon
It is good to know that an offer is not binding, even if the seller has accepted your offer. This means that both you and the seller can decide at any time to cancel the purchase or sell the house to another bidder. This can also be to a bidder who has not made the highest offer. The Swedes also regularly sell their house on the basis of what the seller thinks is the best instead of highest price. For example, they prefer to sell it to a young couple or young family, people who can contribute something to the community or people who emigrate or stay in Sweden for a longer period of time instead of to someone who only comes there for a few weeks a year or perhaps even wants to rent the house out as an investment. A house in Sweden is only really yours when the purchase contract has been signed by both parties and the down payment for the house has been made. Until then, anything can still happen and unfortunately that does happen regularly. For example, people thought they had bought a house in Sweden after their offer had been accepted, only to hear not much later that the house had gone to another bidder.
This almost happened to us too. Our offer was accepted, after which the real estate agent was busy drawing up the purchase contract and we had contact about making an appointment for the inspection. Then we were told that a new bidder had come forward who had offered 10,000 swedish crowns more. Fortunately, we had quite a bit of leeway and 10,000 crowns is not a lot of money when it comes to buying a house. So we made a new and higher offer, after which the other person added 10,000 crowns on top of that no less than 8 times. Then we had reached our limit and made our final offer. There goes our dream house, we thought, because the other person would surely add 10,000 crowns on top of that. Until we suddenly received a message back that the seller had stopped the bidding and wanted to continue with us! We couldn’t believe it, but it turned out to be true. We were very happy, but this often ends differently and can be a big disappointment. Unfortunately that is also part of it sometimes. It is therefore advisable not to focus on one house, but also to look further at other houses.
NOTE* The bidding system in Sweden carries the risk of fake bids being made to drive up the price. However, the chance that the estate agent does this themselves or cooperates on it is small. Although they often receive a percentage of the purchase price (and therefore benefit from a higher bid), an estate agent works for both the seller and the buyer and is therefore impartial. Moreover, they work with a license from the Fastighetsmäklarinspectionen (the Swedish property inspectorate) and may lose it if they abuse their position. There is a greater chance that acquaintances of the seller will bid along to drive up the price. After all, a bid is not binding, but bidding along can encourage other bidders to bid higher as well. However, this is also not common. The Swedes are generally polite people and, as mentioned, the Swedes also regularly sell their house to a bidder on the basis of awarding and not necessarily to the highest bidder. Moreover, after the purchase you can ask the estate agent for a bid list. This lists all bidders and their bids, including their contact details. Although you can only check this after purchasing the house, you can check whether there has been any suspicious behaviour (for example, the same surname as the seller) and possibly file a complaint with the Swedish Property Inspectorate because the agent has allowed this.
Tips for bidding on a house in Sweden
To reduce the chance of disappointment, there are a number of things you can do when bidding on a house in Sweden. I will list them for you below:
1. Determine in advance what you can and want to pay at most
Make sure you know in advance what you can pay at most, but also determine in advance what you want to pay at most for a house. After all, one house is not the same as the other. For example, you may still have to do some work on one house, while the other is already completely finished and ready to move in. With a fixed agreed maximum bid, you know how far you can go and you prevent yourself from acting based on emotion.
2. Be prepared to act quickly
As you have read, a house is only really yours when both parties have signed the purchase contract and the down payment has been made. If your offer is accepted, it can therefore pay to act quickly. This reduces the chance that, for example, a new bidder will suddenly show up. However, make sure that you are prepared to act quickly. So first take a good look at the house, consult with your family and agree on a maximum amount in advance. This way you know where you stand and you can act quickly.
3. Show interest and tell the agent something about yourself
Although you probably won’t meet the current residents during a viewing, it can be worthwhile to tell the agent more about your family situation, your plans for the house/in Sweden or what you can contribute to the area and community. Of course, do this without exaggerating, but because a house is often sold on the basis of favoritism, it can certainly help if the agent can tell the seller a bit more about you. The seller will then have a better picture of you, which may give you a higher favorability factor.
