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PROPERTY

How do you beat the stress of the Swedish property bidding war?

In Sweden, the process of buying a home often takes place over text. The bidding wars that result can be a huge cause of stress for would-be buyers, all the more so if you're relatively new to the country.

How do you beat the stress of the Swedish property bidding war?
Property buyers often only have around an hour to look round their prospective home before entering a high stakes bidding war via text. Photo: Henrik Montgomery/TT

As in most countries, a lot depends on where in Sweden you’re buying your property. In smaller towns, or when dealing with a property that’s less in-demand for whatever reason, buyers are more likely to be able to get it for the starting price or even less. 

But when there’s more than one interested buyer, it’s likely to go to bidding. This is very often the case in Sweden’s larger cities, where a well-documented housing shortage keeps the market competitive.

And things move fast.

Typically, there are two viewings of each apartment (usually one on a Sunday afternoon and one on a weekday evening). They’ll often last for just half an hour, which means you may well end up committing to one of the biggest financial decisions of your life after only spending a total of one hour there. During that time, you need to take a careful look around – after the sale is complete, the seller is only responsible for flaws which you could not be expected to have discovered during your inspection.

Preparing to buy:

Interested buyers give their details to the estate agent, who rings round after the viewings to ask buyers to place their bids. Once the first bid is made, everyone who’s expressed interest is notified of each following bid via a group text message, and they can raise the price by responding to the text with their own offer.

Buying property is never exactly a smooth process, and the different systems in different countries have their own pros and cons. In Sweden, the fast-moving nature of the housing market is considered a plus for buyers and makes annoying delays less likely. 

But there are several downsides, not least for Sweden’s foreign residents who navigate the whole process in a language that’s not their own. Many estate agents will speak English, but translation of technical terms and concepts related to property can be tricky even for professionals, and the contracts may well only be available in Swedish.

Bids aren’t legally binding, which means that you have a small window of time to change your mind or look into anything that’s worrying you without any liability. You may also agree with the seller that you will only buy the property if it passes a final and more thorough inspection for any damages to the property.

On the flipside, this has raised fears that prices may be artificially inflated by “fake” bids which could be submitted by the estate agent, friends of the seller, or speculators who aren’t totally serious. In neighbouring Denmark and Norway, bids on property are binding, and Sweden’s largest real estate agency Fastighetsbyrån has previously called for a similar system here.

What makes the process even more opaque is the anonymity of the bidding.

The Swedish Consumer Agency (Konsumentverket) has called for requirements that bidders confirm their ID before their bids are registered, and some estate agents now ask bidders to identify themselves, for example using mobile banking ID. When you sign your contract, it may be possible to get information showing the name and contact details of all bidders, along with the time and amount of each bid.

Even removing the risk of fake or fraudulent bids, the hot property market makes for a stressful bidding experience competing against other serious buyers.

The bidding war might be concluded within just a few days, or even hours, especially if the seller wants a quick deal. 

But even when you’ve ‘won’ the bidding war – you haven’t actually. Once all bidders but one have dropped out, the winner is invited to sign contracts, and this often takes place the very same day.

This isn’t when you buy the apartment, but you will commit to buying it (and potentially be liable to pay quite a lot of money if the sale then falls through). Until you’ve signed on the dotted line, it’s possible for one of the other bidders, or even someone new, to put in a higher offer. Any hold-up on your way to the estate agent could end up costing you a lot.

So is there anything you can do to mitigate the stress of the Swedish bidding war?

Ultimately, the only option is plenty of research.

Different people will have their own pet theories about the best way to ensure your offer is the winning one. Bid aggressively, outbidding every other person within minutes and by large amounts! Raise the stakes by going significantly over the starting price at the very beginning! Be petty, only raising the price by small amounts until you’ve annoyed the other bidders into dropping out! 

People don’t always act rationally so some of these tactics may have an effect, but realistically if another bidder has a higher budget than you, you’re unlikely to deter them just because you placed a bid ending in an odd number, or submitted your bid at a certain time.

And you never know what extra factors are at play; an apartment that’s only OK to you might be worth a much higher price to them, if it means an easy commute, living next door to their grandma, or so on.

It does pay to know the market, so you can act and react fast when that great apartment comes along – and walk away if the prices spiral beyond what’s right for you. 

You can at least slightly reduce the stress of the bidding by starting to look into the market at least six months before you plan to buy. Track how prices have changed over recent months and years and work out what a reasonable price per square metre is in your desired neighbourhood.

Analysing the financial situations of different housing associations isn’t a fun way to spend your weekends, but it could help you sleep at night rather than lying awake in anguish over whether you paid a fair price. Or if you’re buying a villa, learn how housing surveys work and the key things to look out for, since with detached houses you have more responsibilities than in an apartment or a house that’s part of an association.

Look carefully through the ads, go to several viewings, read up on the housing associations, and follow the bidding process.

Ideally, you want to get to a point where you’re confident that you can estimate not only the market value, but what each property is worth to you.

That way, you can try to bypass the entire bidding process by asking estate agents for an early viewing. Some estate agents start to advertise properties before they are officially on the market, and sellers are sometimes happy to skip the whole bidding process for the right price (if you see ads on Hemnet that are borttagen före visning or “removed before viewing”, this is likely what happened).

Even if that’s not possible, the bidding should be less stressful if you have a clear idea beforehand of the maximum price you’re willing to pay before you walk away.

Swedish vocabulary

starting price – (ett) utgångspris

estate agent – (en) mäklare

viewing – (en) visning

bidding process – (en) budgivning

housing market – (en) bostadsmarknad

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RENTING

Five tricks Swedes use to avoid the long wait for rental apartments

The official waiting time for apartments in Stockholm, Gothenburg, and Malmö varies between three and eleven years. But Swedes have their own tricks for jumping the queue.

Five tricks Swedes use to avoid the long wait for rental apartments

There’s no requirement for landlords or renters to use the queuing systems run by the municipalities in the big cities, but most of the big ones do, the intention being to reduce corruption and increase fairness in the rental market. 

The Stockholm Housing Agency, or bostadsförmedlingen, has a queue between seven and eleven years long. Boplats Gothenburg has an average wait of 6.4 years, and Boplats Syd in Malmö has an average waiting time of nearly three years.

According to Kristina Wahlgren, a journalist at Hem & Hyra, Sweden’s leading rental property magazine, the system puts foreigners and recent arrivals to Sweden at a significant disadvantage. 

“It’s extremely difficult if you are from another country. You don’t have any contacts, and it’s quite difficult to understand if you haven’t grown up in this culture,” she says of the system. “There are some quite subtle aspects, and there’s vänskapskorruption [giving special advantage to friends]. ” 

Listen to a discussion about Swedish queue systems on Sweden in Focus, The Local’s podcast. 

Click HERE to listen to Sweden in Focus on Apple Podcasts, Spotify or Google Podcasts.

Obviously, the biggest advantage faced by locals in Sweden is that they normally joined the queue the moment they turned 17, so by the time they’re looking for an apartment as a young adult, they’re already near the front. 

But even for new arrivals in Sweden, it’s possible to wait a much shorter time if you know the tricks, says Wahlgren, who has been nominated for Sweden’s Guldspaden journalism prize for an investigation into how Malmö finds housing for homeless people. 

Kristina Wahlgren, a reporter for the Hem & Hyra newspaper. Photo: Hem & Hyra

1.  Apply for more expensive new-build apartments to start off with 

If you’ve got a good enough salary, and are willing to pay high rent for your first few years in Sweden, this can make it easier to get an apartment, as there is less competition for more expensive, new-build apartments, Wahlgren says.

“If you’re willing to pay high rent, then you can get an apartment within a couple of months [in Malmö]. If you want a cheaper apartment, it can take years. So it’s quite a big difference.”

2. Rather than wait for your perfect apartment, take what’s available and then swap 

The rules recently got a little stricter, but it’s still relatively easy to swap between apartments once you have a first-hand contract. There’s even a website, Lägenhetsbyte, which acts as an interface. 

This means, if you use the method above, and decide to rent a more expensive new-build apartment with a shorter queue, you can then downgrade to a cheaper apartment with someone who is after somewhere newer and swankier.

Rental queues are also shorter in less desirable areas of Sweden’s cities. For example, the waiting list in Norra Hissingen in Gothenburg is only five years, half what it is in Majorna. It can be quicker to make do with living in a relatively dreary area, and then swap with somewhere better, than to insist from the start on an apartment in your dream location. 

“If you can’t wait for the right department, just take the one that you get, then you can keep on looking and when you do have a lease, you can change the lease with someone else,” Wahlgren says. 

To change apartment, you need to have a so-called “acceptable reason”, such as needing a bigger or smaller apartment. With any luck, your landlord should accept the swap. If they refuse you can challenge their decision at your local hyresnämnden or “rental tribunal”.  

3. Use the tricks for contacting landlords directly  

Landlords in Sweden are not required to use the municipal rental queues to find their tenants, and if a suitable tenant presents themselves just as an apartment becomes free, they may prefer to take someone they know.

This is particularly the case with the smaller, private landlords. It’s possible to find lists of private landlords online, such as here. But Wahlgren recommends putting in a bit of legwork.

“One way to find who owns an apartment block, is to just go around and check on the buildings for the names of the landlords, and look in the stairwells for the number of the landlord’s agent.” 

Once you have the number, you have to ring both regularly, at least once a month, and also strategically. 

“It’s important to call at the right time,” Wahlgren says. “Because normally apartment rentals end at the turn of the month, so that’s when you’re going to call. You don’t call on the 15th, you call on the 31st or the 1st of the month.”

4. Exploit all the friends and contacts that you have 

When someone hands in their notice on a rental agreement, they may try to shorten their notice by finding a replacement for the landlord, or they might find a replacement simply as a favour. This is why it’s important to ask your friends and work colleagues if they know of any apartments becoming free. 

“If they use the municipal queue, they have to follow the rules. This way, they can choose their own tenants,” Wahlgren says of the appeal of this to landlords. “If you’re a nice person, you might be able to just talk your way into an apartment.” 

5. Be a student 

“If you’re a student, there are special housing companies in the university cities, different foundations that rent out apartments,” Wahlgren says. But then you have to study.” 

Illegal ways of getting an apartment

All of these ways of getting a rental apartment are legal, but there are some ways of getting a rental apartment more quickly which are not.

1. Paying a fee

You may also find landlords or intermediaries on websites such as Blocket, who ask for a one-off payment to jump a rental queue, or get a rental apartment. This is illegal. “You can lose your money, you can lose the apartment, and in the worst case, you can go to prison,” warns Wahlgren.

2. Getting an illegal subtenancy 

It’s perfectly legal to rent out your rental apartment to someone else for a period, if you have a valid reason for doing so and your landlord agrees. But such is the pressure to get housing that a market has sprung up in illegal subletting. Before signing a contract for a sublet, make sure that the landlord who owns the property has agreed to it. 

3. Bribing someone running the queue 

There have been cases of people working for municipalities logging into the housing queue and altering it, either as a favour to their friends, or for money. This is fairly rare, and in the unlikely event that someone offers to do this for you, it’s best to decline. 

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