Tuesday, 15 October 2013

Buying a house in Norway

I am very happy to announce that last month my lovely lady and I finally bought ourselves a new home. It is a smallish, modern, cosy apartment in a nice suburb just 10 minutes drive/bus from the city centre. I am chuffed to bits with it to be honest and cant wait to move in.

Now I've never bought a house in any other country however from what I know the system here in Norway is certainly very different from England if not many other places as well, so for those who are curious and especially anyone coming over to live, let me explain it for you.

In England from what I understand the most common way to sell a house is to have it valued and then an estate agent advises you on what they think is the highest you can receive for that property and you set that as the asking price. People view the house, most commonly at private viewings where an estate agent would show you around and tell the asking price. Then if someone offers the asking price, the house is theirs, although it is very common to offer under that asking price and hope the seller will negotiate. I'm sure that occasionally more than one person(s) love a property and there is a mini bidding war that might end up with someone paying over the original asking price, but I believe this is rare.

In Norway this whole system is very different. Firstly the house value is assessed based essentially entirely on a mathematical formula. The price set is therefore a guide price and when talking about cheaper smaller houses and apartments that are always in high demand, the final price paid appears to always go well over this! So what happens is a time is set for an open house. Everyone goes and has a look at the same time and then gives there phone number if they are interested. The next day all those that are interested are constantly called and updated with the latest offer and given the chance to make their own offer until midday in an auction style. Then just like that its all over and you start the paper work.

The whole private or open house debate I don't think its too important a distinction apart from of course the fact the English private viewing model must be a hell of a lot more expensive for the real estate company. Its the price guiding and bidding that are the big differences I want to discuss and what I have learnt from my experiences of them.

Firstly the guide price system in Norway is nothing short of a MAJOR ARSE! I think its completely stupid and very tedious. Searching for houses online well under your budget only to see them and have them go for 20% or more over what you were expecting is a major annoyance. For example if you had a budget of 2million NOK (200,000 GBP approximately) You could find lots of apartments listed at around 1,750,000 only to see them go for 2,250,000. It makes it hugely difficult to know what to bother looking at especially as these are all open houses and you therefore you end up seeing one or two every day rather than being able to arrange to see 5 in a row.

You also have to consider the fact that then whoever wins the auction will always feel they may have overpaid. It is only natural that many people will look at the guide price of say 1,700,000 and they think that is what the place is really worth. When they have ended up paying 2 million they are going to think they have got terribly value. When buying a first home especially the stress of the huge outlay is more than scary enough without adding this psychological blow as well. My business student brain tells me to look at the market price as the value of a home, so if someone bought an apartment for 2million then that is what its worth so it doesn't bother me so much personally but I still think its a stupid system

The auction element of the process I actually support. Its very quick compared to the English bidding back and forth which can take weeks. Although that morning was the longest of my life it was nice to know by midday it was all over and we had won!

4 comments:

  1. This must've been a memorable experience for you, as it was your first time to buy a house in a different country. Buying a home in Norway might have been different from your previous place, so I'm sure that you did a lot of research and preparations before you finally made up your mind. Good luck! I wish you a happy home life. :)

    Leslie Myers @ CREB®

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  2. Buying a house in a foreign country may seem hard and different from what you're used to, but it can also has its advantages. Like in what you mentioned that you support the auction element of the process in Norway because it's faster. Well, congratulations for winning your new home. I'm glad that the house you bought has easy access to the city centre.

    Chad Hovde @ BestCollegeStationHomeSearch.com

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