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Buying a house in Sweden

UK and Swedish systems don't work together?

Runesmith
post 24.Mar.2019, 04:16 PM
Post #1
Joined: 15.Jan.2014

I am trying to move to Sweden from England and hitting a problem: it seems the systems for buying and selling houses in the two countries don't mesh.

Here, you agree to buy a house, then wait for a buyer for yours, or tell a waiting buyer that you are ready to complete. The seller waits till you complete on your house sale, and then you complete on theirs, they move and you move.

In Sweden, as I understand it, you make an offer for a house that's already empty, because the seller has got an 85% mortgage and moved already. But other people are also making offers, and the price might be bid up way above what you budgeted. Supposing you win the bidding, you put down your deposit and have, usually, a month to complete.

But here's where the system breaks down for foreigners. To have your deposit accepted you have to show proof that you have a mortgage for the balance. If you're too old, or not rich enough, Swedish banks aren't interested. You have a house to sell, you don't need a mortgage, but that doesn't cut any ice with the estate agent: they won't accept a deposit without that proof-of-loan.

You can get a British finance company to agree you a bridging loan - at cutthroat interest, but that's OK because you don't plan to use it, just show the estate agent proof that you have it so they'll accept your deposit. But if your own house sale falls through, you either lose the new house and your deposit, or you have to use that killer loan.

So maybe you just have to pay cash on the spot. But if you put your house up for sale while bidding on your Swedish house, and the bidding runs away out of your reach, you could end up with no house here and no house there.

Neither system is better or worse than the other, but getting them to work together seems impossible. Either I have to sell up and move twice, and live in a rented place with my stuff in storage till I find somewhere to buy, or I have to try to buy and sell both at once and get into trouble if either end goes wrong.

Is there a simple answer to this that I can't see? Or have I missed something?
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skogsbo
post 24.Mar.2019, 04:44 PM
Post #2
Joined: 20.Sep.2011

Open a bank account here in a small branch and speak to the staff/ manager. With progression towards cash less smaller branches are keen to keep or expand their customer bases otherwise they'll be out of a job.

Handelsbanken has branches in both countries, which may help.

Otherwise you'll just have to commit and sell first. Better to do it that way rather than buy in haste.
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Bsmith
post 24.Mar.2019, 05:21 PM
Post #3
Joined: 25.Jun.2009

We purchased the house in Sweden first, then sold ours at a later date. We had renters in the house in Sweden for a few years which did not work out so well. They did some minor trashing of the place and didn't want to leave when we were ready to move in. Not sure if there is a perfect system, but I do agree with Skogsbo that you do not want to be put in the position of buying in haste...nor selling in haste for that matter.
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Runesmith
post 24.Mar.2019, 05:44 PM
Post #4
Joined: 15.Jan.2014

If I was rich enough to buy first and sell later, there wouldn't be a problem! And we have tried to get a loan through a Swedish bank, they were very polite and very helpful, and helpfully and politely told us we didn't tick the right boxes.
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skogsbo
post 24.Mar.2019, 07:34 PM
Post #5
Joined: 20.Sep.2011

QUOTE (Runesmith @ 24.Mar.2019, 04:44 PM) *
.. and helpfully and politely told us we didn't tick the right boxes.

When bought swedbank weren't entirely open and we knew from our research they weren't helping us much. But they had the lowest rates.

We went to handelsbanken and started fresh. Moved accounts over and they agreed to match swedbdnks rate.

Shop around.
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yet another brit
post 24.Mar.2019, 08:25 PM
Post #6
Joined: 5.Jan.2013

There is another advantage in selling in the UK, and accepting that you'll have to bridge in rental. If you sell in the UK after you've moved to Sweden, you'll be liable for 22% CGT. If you sell (a principal residence) whilst still tax liable in the UK, you won't. So in my experience, people (including me) sell/sold in the UK, then moved, then rented for a while in Sweden before buying - but had/have the capital not to worry about deposits.

Horses for courses...but at least in Sweden once the contract is signed, it is binding on the vendors and they can't change their minds!

That said, it is in fact possible (in what is now a buyers market) to contract to a purchase, but add a clause making it dependent on arranging finance within some period. The vendor won't like it & the agent won't like it, but you can give it a go. Depends on what/where you are looking for, I guess.
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Bsmith
post 24.Mar.2019, 08:42 PM
Post #7
Joined: 25.Jun.2009

QUOTE (Runesmith @ 24.Mar.2019, 04:44 PM) *
If I was rich enough to buy first and sell later, there wouldn't be a problem! And we have tried to get a loan through a Swedish bank, they were very polite and very ... (show full quote)


Not rich, it took our entire life savings to do it and the fact that the dollar was strong against the krona...just like now but been there and done that.

Do you have any assets to collateralize the loan? Or enough cash for a sizable down payment? That should make the banks more interested.
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