Although it is less common now than it was a few months ago, overbidding is still not uncommon in the Netherlands.  Your dream may feature in the dreams of other people too. How exactly do you go about overbidding on a property? And, what are the wise moves to make in terms of overbidding? We explain the key things you should pay attention to.

The cause of overbidding: shortage within the housing market

The current demand for housing is greater than the supply, which equals scarcity – meaning people are willing to pay more. You’ll probably have learned that in the first lesson of any Economics course. This principle also applies to the current housing market. Many people will therefore have the question: how much should you overbid on a house?

How much should you be overbidding by in 2022?

Our advice is to first consider what your maximum budget is before you overbid. Calculate how much you can borrow and what your monthly payments are, using that amount. Based on this, you’ll be able to determine what you actually want to spend per month in terms of housing costs. You’ll probably want to have some money left over for other things as well. To summarize: think carefully about what you want to and can afford, and don’t deviate from that if you are planning to overbid, even though the temptation might be there to do so.

By what percentage should you overbid?

It helps to know approximately what percentage you have to offer above the asking price to stand a chance of winning that dream home in 2022. We get that. Unfortunately, we cannot name a hard percentage. Of course, it makes a difference whether you’re looking to buy a home, in let’s say, Goes or Amsterdam. It even differs per neighborhood within the same city. In addition, it is also varies enormously per property: an estate agent can deliberately put a house on the market at a higher price, or maintain a lower asking price. A good purchasing agent can help you with this. Overbidding of your own accord is not advisable.

Do you want to gain a better understanding of how much is being bid over the price in the current market, on a specific type of property, in a specific neighborhood? If so, then use the handy tools of Walter Living for this purpose.

Tip: via Viisi, you can take out a free Walter Premium trial subscription for no less than 6 months. Register for one of our webinars, or enquire about it in a no-obligation call appointment!

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Can you co-finance overbidding?

You can borrow 100% of the property’s value, so keep in mind how much you can co-finance if you are thinking of overbidding. The appraiser will determine the value of the property. Is your accepted offer higher than the appraisal value? If so, you’ll have to pay the difference yourself. It can’t hurt therefore to research the value of the property in advance; this is something you can also check via Walter Living.

Remember: it is not the case that you have to pay the difference between the asking price and the offer you have made yourself; it concerns the market value of the property, which is determined by an independent appraiser. In practice, it is often the case that the market value that the appraiser determines is in line with the accepted offer. However, beware if you offer considerably more on a property, as this will then no longer apply.

In addition, you must also have enough of your own capital for additional costs if you buy a house, such as the notary, consultancy costs, and any property transfer tax (overdrachtsbelasting) if applicable. You cannot co-finance these costs as part of your mortgage.

Read more about bidding on a house

How much will you pay yourself if you’re overbidding?

Having your own capital is key if you’re planning to overbid. Make sure you have enough savings or call in your family if their financial situation allows. If you already have a current home with surplus value/equity, you could also use it as an extra buffer through a bridging loan. Having a few extra cents left over for renovation work in your new home is also not a bad idea. Need any tips? Viisi is happy to help you on your way without obligation so that you can put in an offer with peace of mind.

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Bidding with certainty instead of subject to financing

You also often hear that, in order to have to winning bid, it has to be one with financing conditions. However, this is not without risk. Viisi has come up with a solution for that: Offer with Certainty. Following an exploratory mortgage talk, and checking over a number of documents, you will receive a certificate from us stating the maximum amount with which you can make an offer on a home that is not subject to financing.

The housing market in Amsterdam, Utrecht, The Hague, Rotterdam and Haarlem

Being able to move quickly in the housing market in major cities is only possible if you are well prepared in terms of that phase. Financial advice is therefore crucial, and we will be glad to help with that. Read more about the housing market in:

The difference between first-time buyers and buyers moving on to other properties

Are you buying a property for the first time? If so, it can be difficult to overbid. After all, there is a risk that the market value is (a lot) lower than the price you paid for it. Through our own ‘Starter barometer’ (page in Dutch), we regularly conduct research into the position of ‘starters’ (first-time buyers) on the housing market.

Are you buying your next home? Overbidding will be slightly easier in that case, because you’ll probably have surplus equity that you can put into your new home. This helps to close any gap between the appraiser’s valuation and the purchase price.

Advice on overbidding for a property

Overbidding is exciting, we understand that better than anyone. Therefore, schedule a no-obligation appointment with one of our mortgage advisors. Then together, we can discover how far you can and want to overbid. See you soon!

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