At some point during your house hunt you will come across a property that ticks all (or most of) your boxes. This is where things tend to get potentially confusing, with lots of issues to be addressed before you reach the moment of signing the contract of sale for your new home. Most home-owners, after all, go a considerable number of years between property transactions – unlike your NVM estate agent, whose daily business it is and who is therefore in a position to answer your questions and put your mind at ease.
These are the ten most frequently asked house hunt-related questions.
- When exactly will I be considered to have taken up negotiations?
You will be considered “in negotiation” for a property as soon as the seller comes back to you with a counter-offer in response to your (opening) bid and not a moment sooner, i.e. property negotiations cannot formally be considered as having commenced when all the selling agency has as yet done is let you know that they will be relaying your offer to their client.
- Is it permissible for a selling agent to continue organising viewings while the property in question is under negotiation?
There is no reason for viewings to be suspended as soon as the seller has entered into negotiations with a potential buyer. Nothing may come of these negotiations, in addition to which the selling agent may be keen to gauge market interest in the property he or she is selling. We would point out for the record that it is permissible for an NVM agent to negotiate with multiple prospective buyers, albeit that this has to be communicate clearly to those concerned. If and when the selling NVM agent tells you as a prospective buyer that a particular property is “under offer”, you can still put in a bid of your own, albeit that you will have to wait your turn until negotiations with the current bidder have fallen through. No NVM agent will ever say disclose the amounts offered, as this might send potential “outbidders” the wrong message.
- Now that I have offered to pay the asking price, does the seller have to sell the property to me?
Perhaps surprisingly the answer is no, as the Supreme Court of the Netherlands has ruled that the asking price is to be regarded as an invitation to put in a bid, which implies that even though you have offered to pay the asking price, at this point the seller is still at liberty either to go with your offer or have his or her estate agent get back to you with a (higher) counter-offer.
- Is it permissible for the seller to raise the asking price for a property under offer?
Yes, this is permissible. Then again the potential buyer has the option in the course of negotiations to lower his or her offer, as the original buyer’s bid will be regarded as being off the table as soon as the seller has responded with a counter-offer.
- How do we get to the actual transaction?
Once the seller and buyer have reached agreement on the main aspects such as price, closing date and conditions subsequent, a civil-law notary (who should preferably be based in the Greater Amsterdam area) will set out the arrangements between the two sides in a contract of sale. Conditions subsequent are an important element and one that deserves your full attention. For example, if your purchase of the property is contingent upon a home loan from a bank and you therefore wish to include a financial condition subsequent in the contract of sale, you must advise your seller accordingly at the bidding stage. It is crucial that the two sides should reach agreement in advance on any supplementary arrangements and conditions subsequent for inclusion in the contract of sale. The seller and buyer are contractually committed to one another as soon as they have signed (and initialled) the contract of sale, a copy of which has to be presented to the buyer in order for the three-day grace period under the buyer’s remorse regime (which applies exclusively to consumer buyers of residential property) to take effect. This three-day window gives the buyer the opportunity to change his or her mind about the purchase without having to disclose the underlying reasons and without suffering any adverse consequences. Once the grace period has expired, the buyer has successfully arranged for funding and the other conditions subsequent (if any) have quietly gone away, it is time to return to the notary’s office for the closing.
- Is it permissible for an NVM agent to change the sales system while negotiations are under way?
Yes, this is permissible. Properties can attract so many prospective buyers that the selling agent in consultation with his or her client may decide to suspend negotiations and switch to a sealed-bid system, to give everyone a chance to put in the top bid. It goes without saying that the selling agent will have to satisfy any commitments he or she may already have undertaken before switching to a new system.
- Is it permissible for an NVM agent to put a ridiculously steep asking price on a property?
It is the seller in consultation with his or her NVM agent who fixes the asking price. The (prospective) buyer can negotiate to his or her heart’s content, but at the end of the day it is the seller who decides.
- What is a property purchase option?
The legal essence of a (property purchase) option is that it gives one of the parties to the arrangement the opportunity unilaterally to confirm its conclusion, with its party of the other party, of a contract of sale for the property in question. Although the two sides have already reached agreement on the particulars of the transaction, the buyer may for example be given an additional week to mull things over. The property purchase option can be available in the context of new-build developments, by contrast to transactions involving existing properties. When reference is made to a property purchase option in a “regular” estate agency context, what is actually meant is that the selling NVM agent undertakes vis-à-vis the prospective buyer with whom negotiations have been taken up (not) to do something or other . The agent may for example undertake for a particular term to refrain from entering into negotiations with anyone else for the property in question, thus giving the prospective buyer some more time to sort out his or her finances or decide whether the property lends itself for its envisaged use. Buyers are never in a position forcibly to extract property purchase options from their sellers. At the end of the day it is up to the seller together with his or her NVM agent to decide whether or not to accommodate the buyer while negotiations are under way.
- Is it compulsory for the selling agent to take up negotiations with me where I have been the first to apply for a viewing or put in a bid for a particular property?
No, the selling agent is not under any obligation to adhere to the “first come, first served” principle, although he or she does of course have to notify you of what is happening. If you are seriously interested in a particular property and you don’t want to end up disappointed, check out with the selling agency where you stand as a prospective buyer.
- Is the estate agency fee included in the “transaction-related charges”?
No, it is not. “Transaction-related charges” are defined as the costs, fees and duties the government associates with residential property transactions. They are: (i) stamp duty or real estate tax (at two percent of the transaction value for residential properties bought by consumer buyers), (ii) notarial fees and charges for preparing the deed of conveyance (or notarial closing record, which enables title to the property to transfer from the seller to the buyer), and (iii) administrative fees for entry of the deed of conveyance in the land registry records. Any buyer who takes out a mortgage loan additionally has to make allowances for the notarial fees and charges for having the mortgage deed drawn up and entered in the land registry records. The selling agent’s fees are settled up by the seller, as it is he or she the agent in question has been working for. As a buyer you may wish to engage an NVM agent of your own, to ensure that your interests are protected. The buying agent’s fees are obviously settled up by the buyer.
The “Property FAQs” brochure is an NVM publication.