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

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
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.

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.

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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.

Photo: Tomas Oneborg/SvD/TT

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.


Photo: Jonas Ekströmer/SCANPIX/TT

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.

Analyzing 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

 
 
Properties in Sweden

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