For members


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

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.

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

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.

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.

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.

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.

Analysing 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

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For members


INTERVIEW: ‘Most foreigners in Sweden don’t know they can get back excess rent’

In Sweden, people subletting apartments are not allowed to charge more in rent than they themselves pay. But foreign subtenants don't always know this. We asked Roland Sjölin, lawyer at the Swedish Tenants' Association, about how to get back excess rent.

INTERVIEW: 'Most foreigners in Sweden don't know they can get back excess rent'

More and more of the people asking the Swedish Tenants’ Association, Hyresgästföreningen in Swedish, for help with excess rent are foreigners, Sjölin told The Local in an interview.

“The problem is that if you’re coming from another country, and you’re subletting an apartment, you’re probably not familiar with the rules in Sweden, because in other countries, it might be okay to overcharge your tenants.” 

He said that clients from India in particular seeking help from the association were now “very common”. 

“Many people come here to work as engineers in the IT sector and then have to rent somewhere,” he said, adding that as a group Indians appeared to be “very aware of their rights.”

Sweden’s rental sector is heavily regulated, with first hand contracts negotiated between landlords and the Tenants’ Association, and the rent that can be charged for second-hand contracts limited to only a small fraction above what the first-hand renter pays. 

“You’re not allowed to make any profit subletting an apartment in Sweden,” Sjölin explains. “You can only charge the subletting tenant the same rent as you [the first-hand tenant] are paying to your landlord, and then you can add the costs for internet and electricity, and perhaps a parking lot, if that is included.” 

Tenants’ Association lawyer Roland Sjölin. Photo: supplied.

You can also add a påslag or “markup”, if you are renting out the apartment fully furnished, but this cannot exceed more than 15 percent of the rent. 

That doesn’t mean that most landlords follow the law. The competition for rental apartments, especially in Stockholm, is so intense, that unscrupulous sublet landlords often try to get away with charging well over the legal amount, charging what is known in Sweden as ockerhyra, or “excess rent” and hoping that their tenants are too desperate to complain.  

What many foreigners do not realise is that even after the rental period is over, they can still get back any excess rent they have paid by applying to the Rental Board or Hyresnämnden, which functions like a court judging rental disputes. 

“If you have the evidence then it’s fairly easy,” Sjölin said. “I get a new case every second week on repayment of unfair rent, and I think that I win most of them.” 

“Nowadays, you can get paid back excess rent up to 24 months back in time, so people tend to get more money,” he added. “In some cases, they can get 200,000 kronor. In other cases, perhaps it’s only 30,000 kronor or 60,000 kronor. It depends on how long you have rented the apartment, and how excessive the rent you’ve been paying has been.”

The first step is to establish what would have been a fair rent, either by asking your landlord what they themselves pay directly or by checking with the Tenants’ Association.

“Because we negotiate most rents in Sweden, we normally know what the firsthand rent is,” Sjölin explained.

Then you need to collect together your evidence.

“It’s a good thing to have a written contract and also papers from your bank showing that you paid rent every month, and perhaps photographs of the apartment, so the rental board can get an idea of the apartment you were renting and what would be a fair rent, and also the termination for the contract so you can show the court how long you’ve been living in the apartment.” 

But Sjölin underlined that since Sweden has free burden of evidence, none of this is essential. 

“Even if you’ve been paying in cash, if you have witnesses who can testify what you were paying each month, you still have a chance of getting your money back. It’s a bit more tricky, but I’ve won two cases like that this year.” 

People in Sweden, he explained, tend to wait until the rental period is over before seeking to get paid back excess rent rather than challenging their landlord while they are still living in the apartment. 

“You don’t have any legal protection for your home for the first two years, so if you bring the matter up with the person you’re renting the apartment from you risk losing your contract and having to move out, so most people wait until they’re supposed to move anyway,” he said.

If you apply to the rental board for a refund close to the day you move out, you can then make your landlord pay back all excess rent paid in the 24 months leading up to the date you contacted the rental board.

If you are a member of the Tenants’ Association, you can contact them and ask for help with your application, but there are also specialist companies, like Orimlig Hyra AB who will buy your case off you and give you a refund within 48 hours, saving you a long wait in exchange for a cut of the money reclaimed. 

Sjölin said that the rental board normally took about 8 months to come to a judgement, but that if the person with the first hand contract appeals, that could extend the waiting time by between six months and a year.