A few weeks ago I wrote that after almost five years in Norway, we are looking at buying a house. The last few weeks have been a whirlwind of emailing listings back and forth, zooming in on photographs, researching areas, examining survey reports and of course, checking out houses in person.
Here's what we've learned! Note: this is not intended to be an exhaustive guide! Use our experience as a starting point for your own research 🙂
Options for home ownership
In Norway there are two main types of house purchase. Self-owned (selveier) houses are straightforward: you own the property. Purchasing a property in this way incurs a 2.5% purchase tax (dokumentsavgift), which is equivalent to stamp duty in the UK. However unlike in the UK, the tax is due on the entire amount of the final selling price. If the property is in a development such as a block of flats or strip of terraced houses (rekkehus), there will be some shared costs (felleskostnader) to cover maintenance and cleaning of shared areas, but they are typically low.
A popular alternative is shared ownership (andel) typically in the form of a housing cooperative (borettslag). Essentially you become a shareholder in the cooperative and buy the rights to live in a specific property.
As the borettslag itself owns the properties, you have to pay a significant monthly amount, which covers the shared debt (fellesgjeld) on the construction costs, interest on other loans, maintenance charges, and in some cases energy, heating and TV costs. Decisions about the development are taken by an elected board of the borettslag members.
This cost structure means that although the actual sale price is lower, your monthly outgoings can be just as high (and in some cases actually higher) as buying a freehold property. Put simply, the shared ownership concept isn't necessarily cheaper, but it does allow more people to purchase property because of the low sale price.
Note: there are other ways to buy a property, but these two are by far the most common.
Regardless of the form of purchase, you will need a mortgage unless you are very wealthy! In almost all circumstances, you will need a security deposit of 25% of the sale price. The one big exception is for those under 34, for whom some banks will offer a mortgage with a 15% deposit.
Lesser deposits used to be common but are now impossible to get, although I think there is some flexibility if your parents are willing to use their own property as security. There's also options open if you need to borrow the deposit amount, but that's something we didn't need to investigate.
As described in the previous post, we have already been to the bank and been given a maximum amount that we are pre-authorised to bid. Both forms of purchase have their pros and cons and we are considering both in our search.
To date we've seen three properties: two shared ownership and one self-owned. The viewing process is the same for nearly all properties. Properties are advertised online (the main hub for this is finn.no but there are other places). The listings are thorough complete with photographs (usually at least 20) and detailed descriptions of the property.
The sales prospectus is a snazzy printed brochure containing the same information as in the listing, plus all legal documentation such as the property survey (this is paid for by the seller and already done before the viewings), and any contractual agreements especially with shared ownership. Any and all issues with the property are revealed in this brochure.
You can order a prospectus or pick one up at the shared viewing event, known as a visning.
Typically, a visning lasts just one hour and is held on a weekday evening or a Sunday afternoon. Interested parties can explore the property and ask questions of the estate agent and the current owners if they are present. If you are interested, you add your name to a list and you will be kept informed of the bidding process.
The viewing process can be stressful if there's a lot of people there, but you just have to ignore everyone and make sure you see everything you want to see and ask every question you want to ask. It's also important to take a good look around the neighbourhood, of course. For one of the properties, I took a trip around the area a week before the viewing to get a sense for what it would be like to live there.
We were interested in all three properties we viewed, so we placed our names on the lists. Even if you're not interested, it's a good idea to do this as it means you receive updates on the bidding process via text message.
If you are interested, you must move fast. But that's for next time 🙂
10 thoughts on “Buying a House: The Viewing Process”
have visited brundalen….. goodluck… we live here its a wonderful neighbourhood.. calm and peaceful
Thanks! We visited one place there but chose not to bid.
Do you mean “a good look around the neighbourhood” instead of “a good luck around the neighbourhood”?
We recently bought a flat. Do you know about the “forkjøpsrett”? We have been bitten by that unfortunately, and it concerns foreigners more then Norwegians. I could write a full article just on this subject (which wyoul be a good idea *wink* *wink*)…
Also, I think it’s worth explaining what all the numbers on the FINN ad and how they work together. Something like: the prisantydning is what the owners “ask for” and the verditakst is how much the flat has been evaluated. The bidding round is all based on the prisantydning (even if the bids usually start lower than this price and exceptionally end also at a lower price). The owner can decide to reject the winning bid even if it went over the asking price. The final price will be winning bid + fellesgjeld + 2.5% of the winning bid if selveier + omkostninger. While I was visiting, even selveier flats has a fellesgjeld btw. Most banks will require you be able to get a loan for the total of all costs while what you will really borrow to the bank is (your winning bid + omkostninger) – your ~25% (security deposit).
Also, for those under 34 years old, it’s recommended to open a BSU account and keep it as much as they can. And being a member of some associations helps for interest rates (namely members of Tekna can have a great deal at Gensidige Bank).
Thanks for the great info Thomas! I’m actually a bit behind with these blog posts as we had a bid accepted this week. More to follow 🙂
Thanks for very useful posts. Looking forward to next update 🙂
Great to know the info about the price breakdown on finn.no, this always confuses me!
Hoping this blog is still active with the author/some of the commenters.
Thanks for all of this information.
Can I ask:
Is the verditakst mandatory….I am interested in a property, but the agent is saying there is only a technical report.
If it is not mandatory – is it possible for me to pay a surveyor to value the property?
Is there any stamp duty (dokumentsavgift) of 2.5% for shared ownership (andel)?
We are planning to move our family to Norway from the UK and I find your website very useful, thank you.
I wondered if you could answer a question about mortgages which is difficult to find out about online. It is how much the bank is prepared to offer in most cases – for example in the UK we were offered approx 4 – 4.5 x our combined salary, based on a 20% deposit. Is it similar in Norway, or stricter, or more generous? And will being a newcomer / foreigner in the country make any difference?
Any insights on your experience of this most appreciated, thank you.
Hi Ish, Norwegian banks can offers upto 5x of your annual salary. The loan percentage covers 85% bank loan and 15% of your savings in bank account.