.. if you make an offer without a “dissolving” clause and have a problem getting the financing, you lose a penalty of 10% of the property price.
Enter a special solution: the Secured bidding plan a kind of insurance product from Expat Mortgages and the company Nationale Waarborg.
“Normally if you would make a bid, you would use a financial condition, saying that I want this house for €400,000 under the condition that I would also get a sufficient mortgage,” says Expat Mortgages consultant Thomas van den Bosch. “You give yourself a deadline and in that deadline you have the time to arrange the mortgage. If you get declined by the lender, you could back out of the deal. But at the moment, the housing market is so tense that a lot of people are buying a house without these financial conditions: you put in a bid and the only security that you have is a cooling off period of three days.”
Safer bid for minimal cost
But with a special new product, in this overheated market, there’s a way to make a safer bid for a minimal cost. The Bank Guarantee Secure Certificate guarantees to cover this deposit up to €75,000 (for a property worth up to €750,000) and ensures no recourse to you if the mortgage is rejected. After winning the bid and signing the purchase contract, Expat Mortgages has 40 days to arrange to mortgage instead of the standard three-day cooling-off period. This service can be applied to several properties if needed, for each property Expat Mortgages does a thorough check. The only charge for this being the €400 administration fee.
In order to apply for this insurance, Expat Mortgages needs to make a detailed file, checking all of your salary and savings details, gathering either a remote property valuation report or an official valuation declaration from your estate agent, to make a cautious estimate of what you can afford. “Our initial fee of €400 is because we basically have to have a complete file already for the mortgage application, checked by a second colleague: there’s a four-eye check, as we say in Dutch,” says Thomas.
Only if your purchase is successful will there be a fee for the insurance itself, €500 calculated when the notary puts through your sale. Additionally, the bank guarantee is mandatory if you use this insurance and has a fixed cost of €275.
“What we see is that there is such an urgency with buying that sellers are actually choosing clients or bidders that are not using these conditions, because they are 100% sure they cannot retract a bid,” he adds. “Yes, in an ideal world, everybody uses these financial conditions, but what you see is that a lot of people are not using them anymore, so if you’re not using them, let’s then just try to do it safely.”
Broaden your opportunities
This really is a way to broaden your opportunities if you want to buy a house, particularly if you are bidding for an apartment or in a popular city – the most pressured parts of the market. Since there is a digital valuation of the property you are bidding for, or a formal statement from an estate agent, as well as an assessment of your savings, there is a clearer idea of what it is worth and that you can achieve it.
In one recent example, a seller who had been let down once was willing to take a slightly lower bid to an Expat Mortgages client protected with this condition, so that they could be sure they would sell their house and kept the duration for the double housing costs as short as possible.
“We have already used it successfully three times in just one and a half weeks since the new launch,” says Thomas. “People are really happy with it.”