Buying an apartment in Stockholm
Geoff and I just bought an apartment in Stockholm, and there are definitely some differences in the process from what you might have experienced buying property in other countries.
Here are the steps we have gone through:
1. Visit hemnet. Hemnet is the place where all of the properties in the Kingdom of Sweden is listed. You simply put in the specifications:
The area you are interested in searching in. For example: Södermalm or Östermalm.
Avgift: Avgift is basically like rent – you pay this price every month when you live in an apartment building. Newer buildings tend to have higher avgift than older ones. These tend to range from around 2000 SEK a month to 4500 SEK, but I did see one as high as 8,000 SEK. Often this covers water and heating. Sometimes also internet and cable TV. The property description will tell you what’s included and isn’t.
Pris: Your minimum and maximum price amount for the property.
Rum: How many rooms you are looking for. Keep in mind the living room is considered a room, so if you want 2 bedrooms and a living room you’ll need a 3 room apartment. Some are listed at 2.5 room apartments – this is either a tiny little bedroom for a child, or a bit of extra space in a room that could fit a desk.
Boarea: The minimum amount of square meters.
Bostadstyp: If you are looking for a house, apartment, etc.
2. View the property. Once you find a property you like, you’ll want to go along to see it. You normally find the viewing times located on the righthand side of the page (visningar). Many of the real-estate companies also have a handy SMS reminder service where you can type in your phone number and they will text you a few hours before the viewing to remind you of the details.
Once you get there you remove your shoes (and try to somehow manoeuvre yourself though the field of shoes) and then are met at the door by a real-estate agent and they will take down your details and give you a brochure of the apartment. You then join 40 other people in squeezing around a 65 square meter apartment.
3. Bidding. Within a day or two, the real estate agent will give you a ring to ask if you are interested. If you are you will be subscribed to a handy SMS update list where any bids that come in for the property are SMSed to your phone. A month or two ago my phone went insane as I was bidding for one apartment and had another as backup (neither of which we ended up buying). If you want to bid you can send a text message (!!!!) to the agent with your bid, or you can call or email it in. Initially I decided the call option seemed like the best idea, as the thought of texting in a bid seemed utterly bizarre to me – but 3 apartments in I started texting away – also receiving an encouraging text from the agent praising me for figuring out the Swedish bidding process (?!).
Biding can also be tracked online if you look up the property listing.
The bidding can go on for days – For some apartments the bidding went of for 4 or 5 days – the one we ended up buying was an almost 2 week process. I asked the agent if there was a cut off point or if bidding goes on, gladiator style, until the last man standing, and he said they do tend to start pressuring you after a certain number of days to wind down the bidding.
Also on the topic of bidding – like everywhere else in the world there are very obviously techniques here to try and encourage the prices to go through the roof. One that I’ve noticed is when you are initially called by the agent to ask if you are interested they sometimes try and pressure you into making a bid there and then. One woman informed me that I was one of 60 people she would be calling (oh my god!!!! the competition!!!!!) and that if I was keen I should put in an arbitrary bid of 5,000 SEK or so. I am sure 60+ people were at the viewing, but I am also quite aware that many of them probably lived in the area and wanted to see what a similar property sold for, or were simply getting a feel for what is available for sale in the area. I’m very sure 60+ people were not bidding, and sure enough from what I saw, only 5 did in the end. I’m also quite sure the only bid I need to put in is the one that buys me the apartment, and that 5,000 SEK bids to ‘show my interest’ are both unnecessary and also, kind of dodgy. I decided that I didn’t really want to buy an apartment from her.
Because the bidding is fairly secretive – i.e. you don’t know if cousin Sven is texting in bids to push the price up, you also need to be fairly strict and keep to your budget – don’t allow the agent to keep pushing you up that little bit extra. I’ve read an example on a Swedish website where the bidding kept going up until the person reached their maximum amount and said that were out – the agent then said ‘Oh well the other bidder might drop out – let me call them’ – which makes it fairly obvious something fishy was happening. If this happens to you and the mysterious other bidder does drop out – and this could happen legitimately as well – then you can go back and negotiate the price downwards – don’t let them pressure you into agreeing to your maximum amount.
4. Best time to buy? The IMF recently warned of a Swedish housing bubble. I’m not a financial expert and can’t make an informed comment on this topic – but I can say that the prices in our area of Sweden are absolutely insane, and have increased significantly even from last year. I recently spoke to a real estate agent who informed me that buying straight after summer is the most expensive time of the year as there are few properties available, and many eager buyers. She told me that November is the best time of the year to buy in Stockholm in terms of value for money.
5. Signing the contract. After a long drawn out process it was time for us to sign the contract. We went to the real estate agency and met the couple that owned the apartment, signed a ridiculous number of documents and sorted out our payment.
6. Awaiting board approval. Here in Sweden apartment buildings have a sort of board that, among other things, needs to approve new tenants into the building. The real estate agent told us it’s more of a formality, but I do know at least one couple that had to go in for an interview before being approved.
7. Getting the keys. We had a very short settlement period – only 5 weeks as the people who owned the apartment we bought had already bought a house and wanted to move out quickly – this short time worked for us too as we are currently renting. We returned back to the real estate agent for the keys and once our final payment went though, the apartment was ours.
8. Renovations. From what I can tell, you can’t just renovate your apartment as you desire – in terms of tearing down walls. You’ll need to ask board approval for that. For fixing floors, painting and so on, we haven’t needed approval, but I have no idea if this is just our building, or all of Sweden.
Make sure if you hire a company to renovate for you that you ask for rot-avdrag. This gives you 50% off the work done – for some reason in Sweden renovations are tax deductible. I thought you’d need to claim it afterwards, but luckily found out that you ask first and the renovation company will claim it.
This might also be a good place to mention hiring a cleaner is also tax deductible here – it’s called rut.
We have to pay our avgift quarterly, but that’s it really. Once the renovations are over, we’ll move in and I’ll be very glad to not have to look at Hemnet for the foreseeable future!
Congratulations!! I hope you found something great. Yes the market is crazy at the moment. We put our apartment on hemnet and got over 500 hits in 3 days, and now we are taking off the market again, backing out due to the fact I’m 24 weeks pregnant among other things. I read that article too but I don’t really see things slowing down much, in Stockholm at least…
Thanks! I’m really happy with our new place, we just have quite a bit of work to do on it. It was one of the few renovators delights I’ve seen in Stockholm.
Are you guys still planning on going back to Australia? I remember you mentioned that awhile ago.
Thanks for this article, Michelle, it helped alot!
Congratulations! I found the bidding process the most stressful – all those texts zipping about, it was so tempting to get caught up in it and bid more than I could afford, because it almost doesn’t seem real! When I finally found my apartment, luckily the seller was awesome so the rest was really straightforward, and I moved in within a month – a relief after seven months of homelessness!!
A couple of questions as I start to sort through this myself!
Are you fluent in Swedish, or was the whole process relatively straight-forward for a non-Swedish speaker?
Do you have to have insurance in order to get a mortgage? Do you decide to carry insurance anyways? Does the avgift cover insurance?
Do you get a tax break from Skatteverket on the interest you pay on your mortgage each year?
Is it against the rules of most BRFs to sublease a room in a flat you have purchased? I’d like to buy a 4-room to live in, and lease out the other 2 rooms.
Thanks for your awesome post!
My Swedish is pretty good, but we communicated with the real estate agent and bank in English just to make sure we hadn’t missed anything important. All of the contracts were in Swedish though, so if you are worried I’d consider having a Swedish speaking lawyer look over it and explain it to you in English before you sign.
One other thing – the old owners of our apartment covered large holes in the floor with rugs, and because the viewings are so busy and you don’t have much time there, I never thought to check under them before we bought. If I’d been a bit more careful about checking details like that I’d have used that to negotiate the price down.
Also double check what they are leaving there! They left an enormous hideous wardrobe when they moved out, and tried to claim in was in the apartment description – luckily the real estate agent paid to have it removed. If you don’t want them to leave anything, make it clear before you sign (likewise, check they are not removing parts of the kitchen, etc). Lastly – ask them to have the apartment professionally cleaned before you move in. You’d think all of this would be normal, but apparently it isn’t.
We have home insurance – it was free for the first 3 months from the date we moved in, and then we had to pay for it after that in addition to our avgift. What the avgift covers differs from apartment to apartment and will be listed on the website – many just cover heating and water, some also include internet and TV.
I can’t imagine renting a room out in your place would be an issue, but you should check with the board in your apartment building to see if they are ok with it. You need to get approval from them to buy the place anyway, so you might as well ask them at the same time.