What is Bidding?

First, let’s be clear on terms. In The Netherlands, bidding is used to explain much of the homebuying negotiations between buyers and sellers.

In contrast, in many English-speaking countries like England and the United States, signaling your interest in buying a property by formally submitting a purchase price, closing date, and financial stipulations is referred to as making an offer. Bidding is reserved for a situation with multiple potential buyers.

In practice, there are currently two ways to sell a home in The Netherlands: classic negotiation & bidding. In classic negotiation, you enter negotiation with the seller when you make an offer on the home. Such negotiation can last a few days, with some back and forth. The parties usually start quite far apart and work towards each other by making various offers and counteroffers. Eventually, you reach an agreement, and the agreement is put on paper.

Until a few years ago, all negotiations proceeded this way. Currently, we see the classic form of negotiation exclusively when homes have been on the market for a few weeks and no purchase agreement has been reached yet. If a property has not been sold after two months or more, it is highly likely that the seller is open to such a negotiation. This usually goes hand in hand with a lower transaction price. After all, there are few candidates who you must outbid.

An offer can become a bid as soon as multiple buyers register their interest in buying a home. At the time of writing this article, almost all homes between the range of €350,000 & €650,000 end up being bid on.

Top Tips from The Xpat Agent

Don’t overdo it when negotiating. On a home that has been on the market for €400,000 for six months, you can easily bid €375,00 to see if there is any room for negotiation.

However, if you make a ridiculous bid, €300,000 for example, you will irritate the seller. They will no longer take you seriously as a candidate. And the selling makelaar won’t either. The chance that you can still reach a deal after that is small. So, you can bid but keep it realistic.

What’s in a bid?

The Purchase Price

The biggest single element for both buyer and seller is the purchase price. Currently in The Netherlands, more than half the homes are sold for above the asking price. That means you should know your homebuying budget, and then look at homes in a lower price range than your upper limit.

Keep in mind, though, that you can only secure a mortgage for 100% of the value of the home.

That means if your bid wins, and the home is not worth what you bid on it, you are responsible to make up the difference between that bid and the actual value of the home. Banks do not finance mortgages over the value of the home.

Closing date

The acceptance date, or closing date, also makes up an important part of your offer. It is the date that the home is transferred to the notary, and you receive the home key after a final walk-through. When making your offer, you can accept a closing date from the seller, offer a new date, or you can indicate that you want to choose the closing date.

Tip: the closing date can be an important date for the seller. They may be buying another home and cannot move until a certain date. Flexibility on the part of the buyer can help improve how the negotiations go and swing the sale of the home in a particular buyer’s favour.

Possible Resolutive conditions

Resolutive conditions are arrangements between parties that an agreement will end in the event of certain circumstances. That means if something comes up in the purchase of the home, you can cancel your contract before you close. In the case of home buying, the most common financial stipulations relate to the ability to finance a property, and the technical inspection of the home.

In some countries, you can be pre-approved for a mortgage. This pre-approval process is not commonly used in The Netherlands. Typically, after your bid on a home is accepted, you have 4-6 weeks to secure a mortgage. If you are not able to get a mortgage within this period, the contract is cancelled without cost to you.

The technical inspection, or bouwtechnische keuring in Dutch, can also be a resolutive condition. The technical inspection of the home tells more about the condition of the structure of the home and protects buyers from unexpected financial expenses.

An inspection can cost between €300-€600. Your inspector will list recommendations for repair as well as estimated costs for those repairs. This is especially useful when a buyer decides to purchase an older home or is planning to renovate a property.

If you are securing a mortgage with the National Mortgage Guarantee (Nationale Hypotheek Garantie), then an inspection is mandatory if the appraiser notices overdue maintenance that would cost more than 10% of the value of the home.

Bidding is fluid

It is not a clear-cut process to determine exactly how a home should be sold given current market conditions. Depending on the condition and location of the home, a seller could start out thinking they’ll negotiate with the first buyer who offers, but then change over to a bidding process when more buyers show interest.

For example, if a home is listed and five buyers want to view the home, that might not seem like a moment to go to bidding instead of classical negotiation. But if three of those home buyers decide they love that home and want to buy it, the seller will want to consider opening the sale up to bidding.

When you aren’t the only interested buyer

So, the home of your dreams is open for accepting multiple offers. What happens during that process? It used to be when multiple buyers wanted to bid on a home, they were given a certain time and date to submit a paper copy of their bid to the seller’s makelaar, or a notary.

Now most of the bidding takes place online. And the vast majority of reliable makelaars use Move.nl for the bidding process. In fact, if the realtor is not using Move.nl, that could potentially be a red flag. When a home is opened for online bidding, the seller and their makelaar set a starting price, as well as when the bidding will start and stop. Then interested buyers can place a bid before the closing of the bidding.

After the bidding closes, the seller and his seller’s makelaar discuss the pros and cons of various bids. The seller’s makelaar will provide their opinion from their experience, but the decision about the winning bid is made by the seller. That means they do not need to accept the highest bid, or even any bid at all.

After the bidding is over and a buyer is selected, bidders can look at what was bid on the home. This can prove insightful for both the winning bidder, and those who’s bid wasn’t successful.

Unlike the seller and seller’s makelaar, bidders and their makelaars do not see who has placed what bid. That remains anonymous. Online bidding allows for a more transparent bidding process.

The Bidding Sequence

If the seller is unable to act quickly enough and interested buyers move on, then they’ll have to start the bidding process over again.

For buyers, at least in the southern part of The Netherlands, it’s considered good buyer’s etiquette to only bid on one home at a time. That way if you end up winning more than one bid, you don’t end up in financially fraught situations.

Once a winning bid is accepted by the sellers, makelaars will want to strike while the iron is hot and move as quickly as possible to put the buying contract in place. This is naturally easier to do if buyers bid on one home at a time.

If the first buyer no longer wants to buy the home, or they bid too much and want to back out of the purchase, then sellers need to be able to move on as quickly as possible to their second-choice bid. That way, the second-choice buyer doesn’t move on to another home.

Wrapping Up: The Key to Successful Bidding

Bidding on a home in the Netherlands is a nuanced process that requires preparation, strategy, and a good understanding of the market dynamics. Whether you’re navigating classic negotiations or participating in competitive bidding, being informed and realistic is your best approach.

Remember, the process is fluid—sellers may shift strategies based on buyer interest, and market conditions can influence outcomes. Working with an experienced makelaar who understands your needs and budget is invaluable, as they can guide you through each step and help you make informed decisions.

Finally, patience and flexibility can set you apart as a buyer. Whether it’s offering a closing date that works for the seller or setting realistic conditions in your bid, these small adjustments can make a big difference in standing out among competitors.

Buying your dream home is an exciting journey, and with the right preparation and mindset, you can navigate the bidding process confidently and secure a place you’ll love to call home.