Before embarking on the actual process of finding a house to buy, make sure you first contact a bank or mortgage broker to discuss whether you will be able to take out a mortgage here, to what amount you can do this and what the related monthly expenses will be. Having clarified these points will allow you to focus on finding a new home – without being faced with unpleasant surprises just when you think you have found one.
- You select a real estate agent, and discuss what you are looking for, what you need and what is realistic.Though you can go a long way on your own with the help of theInternet, we advise you to contact an agent for the actual house search and negotiation phase. Besides the fact that they have access to a computerized multiple-listing system which keeps them completely up-to-date on properties available in their district, they are familiar with the price ranges, local contracts, ‘invisible’ obliga Real estate agents charge a brokerage fee (courtage) for their services of approximately 1 to 2 percent of the purchase price of the house, though it can be negotiable. Some offer an expat service package.
- If you have any special wishes regarding the property, make sure your real estate agent and the real estate agent of the seller are aware of this. If they are not, and it turns out your home does not meet these wishes, you cannot hold them accountable for it.
- You contact a mortgage provider, to find out exactly how much mortgage you can take out, whereby you take into account additional expenses involved in the purchase of the home (these are discussed further on).
- When you have found a home you like, be sure to discuss all issues such as city council regulations, but also issues such as soil contamination.
- If you want this home, you can inform your real estate agent of this verbally.
- Your real estate agent will contact the selling party and relay this message.
- Have a building inspection carried out. If you fail to do this and there is a problem, more likely than not, you will have lost your right to hold the seller accountable.
- Make the purchase of the house contingent upon its passing the building inspection.
- The initial verbal agreement you reach with the seller is put in writing in the preliminary purchase contract. A penalty clause is usually included in case the seller or the buyer does not meet his obligations.
- After being signed by all the parties, the preliminary purchase contract is sent to the civil law notary who deals with the transfer of the title of the house.
- A three-day ‘cooling-off’ period starts the day after the buyer receives a copy of the signed contract. During these three days the buyer can cancel the deal without any repercussions and without having to state the reason.
- The civil law notary inspects the public registers of the Land Registry regarding mortgages and/or attachments with which the property may be encumbered.
- The transfer of ownership takes place at the civil law notary’s office by means of a deed of transfer that is drawn up by the civil law notary and signed by the seller, the buyer and the civil law notary. You will receive a draft of this deed and of the mortgage deed beforehand. Also your agent will receive these and check them.
- The agent will check together with you to see whether the house has been vacated, and is in the agreed condition.
- The civil law notary takes care of the financial settlement of the transaction and ensures that the deed of transfer is entered in the public registers (Land Registry).
- The transfer then becomes official and you receive the keys of your new house.
Points to Watch for When Buying a House in the Netherlands:
When you decide to buy a house, it is doubly advisable to engage an agent, as there are more complicated matters involved than when renting a house. For instance, you need expert advice on matters such as the fluctuation of prices in certain areas, environmental laws, the construction of a house, hidden defects, and the issues that need to be taken into account when you buy property on leasehold rather than free-hold.
Fixtures and Fittings
When you start negotiating, you should keep in mind that the purchase price excludes furniture, carpets, curtains, light fixtures and sometimes kitchen appliances. You must reach a clear agreement with the seller on which goods are included in the purchase.
The deposit on the house is generally 10% of the purchase price – due approximately five weeks after the deal has been made – and arranged by the mortgage advisor or the bank itself by means of a bank guarantee issued by a Dutch banking institution. This deposit is to be paid to a civil law notary and can be part of the financing agreement reached for the purchase of the house.
The purchase transaction will cost you an additional approximately 6%. This amount represents a government transfer tax of 2%, land registry expenses, the civil law notary’s fees, and the real estate agent’s commission – see below.
If you need to obtain a mortgage to finance the purchase, any purchase agreement should be made subject to financing. If necessary, other resolutive conditions should be part of the agreement, such as (if applicable) being able to obtain a permit to occupy the real estate, or even more importantly, the option of having a constructional survey carried out.
You should seek proper advice on the type of mortgage that is suitable in your situation, particularly in view of the limited period of time during which you may need the mortgage. Do not forget to inform the bank if you are benefiting from the 30%-ruling. If the mortgage is linked to a capital insurance, you may be faced with additional tax consequences. Due to recent legislation, if you take out a new mortgage, you only be allowed to deduct your mortgage interest from your taxable income if you take out a mortgage with straight line redemption and annuity mortgages.
Be sure to get expert advice
Deemed Rental Value and WOZ-Value
Those who own a house and use it as their principal place of residence have to report a certain amount – related to the home ownership – on their income tax return. This amount is a percentage of the value of the house, and is called the eigenwoningforfait (or deemed rental value). The eigenwoningforfait is based on the official value of the house, also known as the WOZ-value, which is determined every year by the municipality.
Preliminary Tax Refund
You can receive a tax refund on the mortgage interest deduction every month by requesting a preliminary negative tax bill from the tax authorities. This is done by means of a special form. The tax authorities will then deposit the refund directly into your bank account.
THE ACTUAL HOUSE-HUNTING
It is advisable to make sure the agent is well-informed of your specific wishes prior to the actual house-hunting in order for him to select a list of properties that meet your requirements. The agent can also help you become acquainted with the different terms and conditions of contracts and procedures, and check if the specifications you have given are in line with price ranges and the kind of housing available. On the basis of your specific requirements, a selection from the available market supply will be made and a tour of inspection of those residences will be organized. Normally, more tours will follow until a suitable house is found. It is easier to determine which kind of house suits you best after you have visited several different properties. The average search for the right house will therefore probably take a few months, depending on availability, your needs and market circumstances.
Prices and conditions quoted in the listings for sales and rentals are usually negotiable. In close consultation with the agent, price and conditions will be negotiated with the agent representing the owner. These negotiations can consist of several rounds of verbal bidding and counter-bidding.
As a general rule, the costs of purchasing a house in the Netherlands amount to approximately 6% of the price of the house (this is not the same as the 10% down payment!). These expenses include:
- appraisal fee (expense for having the house officially appraised in order to secure a mortgage)
- notary costs mortgage deed (hypotheekakte)
- cadastral registration fee mortgage deed
- cadastral investigation fee
- administration fee mortgage deed
- structural survey of the house
- bank guarantee fee
- mortgage commission fee (paid either to the bank or the broker)
- National Mortgage Insurance – Nationale Hypotheek Garantie
- transfer tax
- estate agent fee
- notary costs for the transfer deed
- interpreter fees.
On a house of € 350,000, your approximate cost would be an additional € 21,000 over and above the € 350,000 purchase price.
Of interest to know is that the costs listed below are tax-deductible and can be declared (one-time) on your income tax return:
- notary costs mortgage deed (hypotheekakte) (VAT/BTW)
- mortgage commission fee (paid either to the bank or the broker)
- cadastral registration fee
- cadastral investigation fee
- appraisal (taxatie) fee
- administration fee (afsluitprovisie) mortgage deed
- bank guarantee fee.
PRELIMINARY PURCHASE CONTRACT
The verbal agreement is put in writing in the preliminary purchase contract (voorlopige koopakte). A penalty clause is usually included in case the seller or the buyer does not meet his obligations. After being signed by all the parties, the preliminary purchase contract is sent to the civil law notary who will deal with the transfer of the title of the house. A three-day ‘cooling-off’ period starts the day after the buyer receives a copy of the signed contract. During these three days the buyer can cancel the deal without any repercussions and without having to state the reason.
The choice of civil law notary is usually the buyer’s. Upon receipt of the preliminary purchase contract, the civil law notary inspects the public registers of the Land Registry regarding mortgages and/or attachments with which the property may be encumbered.
In the Amsterdam area, both parties and their agents often visit the office of the civil law notary together for the signing of the preliminary purchase contract.
TRANSFER OF OWNERSHIP
The transfer of ownership will take place at the civil law notary’s office by means of a deed of transfer to be drawn up by the civil law notary and to be signed by the seller, the buyer and the civil law notary. The civil law notary will first send you a draft of this deed of transfer together with a statement showing the payment due in order to complete the purchase. This statement includes the purchase price, the transfer tax, the cadastral registration fees, notarial fees, the commission on a possible mortgage loan, real estate agent’s fees, etc. If there is a mortgage loan, you will receive a draft of the mortgage deed. Your agent will also receive these documents and check them.
Usually on the day of the transfer, the agent will check together with you to see whether the house has been vacated, and is in the agreed condition. It is the task of the civil law notary to take care of the financial settlement of the transaction and to ensure that the deed of transfer is entered in the public registers (Land Registry). The transfer then becomes official and the seller turns over the keys of your new house.
You may need the help of an interpreter
If your command of the Dutch language is such that you will be needing the assistance of an interpreter when communicating with the civil law notary, then you are legally required to request the assistance of a sworn interpreter. Depending on your language, this will cost you anywhere between € 150 and € 500.
Real Estate Agents Portals
www.makelaars.net: real estate brokers portal
www.makelaars-nederland.nl: real estate brokers portal
www.mva.nl: Makelaars Vereniging Amsterdam
www.nvm.nl: Nederlandse Vereniging van Makelaars
Vereniging Eigen Huis (Dutch Housing Association): www.eigenhuis.nl
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