How does bidding on a house work?
A single tactic for bidding on a house doesn’t really exist. However, there are a number of things that you can take into account. You determine your opening bid by looking at the value of the house, your own options, and the competition. The combination of those factors is not the holy trinity, however, but it does provide some useful tools for a well-considered opening bid.
The value of the property
There are a few ways to get a picture of the realistic value of a property. Here is a brief summary of the possibilities:
- Check on websites such as funda.nl, huispedia.nl or jaap.nl to see what you pay per square metre for similar homes, and how long the house has been up for sale.
- You can request an indication of the home value from the Land Registry (Kadaster) or from the WOZ Waardeloket (Value Desk).
- Good to know: the WOZ value is often not a good representation of the market value. The value is generally determined by the municipality and lags (at least 1 year) behind the actual market situation.
- Enlist a buying agent
- Take a look over at the Walter Living website, where you can easily get a value report of the property and suggestions for a bidding strategy. Tip: as a Viisi customer, you can make use of a free Walter Premium trial subscription for no less than 6 months!
Decide what you can afford to offer
Before you start bidding, it is good to know the maximum amount you can borrow. You can have your maximum mortgage assessed by one of our advisors during a telephone appointment, without further obligation. Good to know: you can borrow a maximum of 100% of the home value for your mortgage. This means that you will need to finance everything above that amount with your own money, unless, for example, you have surplus value in your current home that you can bring in.
Keep in mind that you will need to finance about 6% of the purchase price from your own capital anyway. Find out why.
Bidding on a house when multiple interested parties are involved
Bidding among several interested parties at the same time on the same house is commonplace, we’re not really saying anything new here. The selling agent may negotiate with multiple parties, but is not allowed to state the amount that has been bid. However, he has to disclose how many parties he is negotiating with – which is a thin straw to clutch on to. The good news is that the Dutch government is working on a bidding logbook, which should make the buying process more transparent.
Are there many parties interested in the property? If so, then the estate agent will often opt to sell using a tendering process.