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PROPERTY

How not to buy a house in Norway: Five pitfalls to avoid 

Buying a home in Norway comes with many challenges, from the dreaded bidding rounds to the small print. Here are some of the mistakes you need to steer clear of. 

Published: 17 April 2024 12:00 CEST
Pictured is the city of Ålesund on Norway's west coast.
There are a number of key pitfalls to avoid when purchasing property in Norway. Pictured is the city of Ålesund on Norway's west coast. Photo by James Obernesser on Unsplash

Norway’s property market moves quickly, and most homes do not spend too long on the market. 

Furthermore, rising property prices can make it feel like it’s constantly getting harder and harder to get on the property ladder. 

However, despite rising prices and the market’s breakneck speed, it’s important not to rush into things and end up making a massive mistake. 

Not sorting your paperwork 

Before you are ready to start putting in offers on houses, you will need the mortgage offer from the bank. Therefore, you should fix this before really getting stuck into viewings. 

Banks in Norway offer mortgages of up to 85 percent of a home’s value, with a 15 percent deposit required. 

They will also stress-test your finances against interest rate raises and consider factors such as your income and any existing loans you may have. In Norway, your debt typically can’t exceed five times your income when purchasing a property. 

Once you’ve got an offer, you can approach other banks to see if they will better the offer you received, and after this, you are ready to begin searching as you know what you can afford. 

READ ALSO: What foreign residents in Norway need to know to get a mortgage

Not reading the small print 

There is quite a lot of important small print when purchasing a house that will cost you big time if you don’t properly read it. 

All homes in Norway generally come with an in-depth report on the property’s condition, and in most cases, the buyer is responsible for uncovering flaws in the property. 

During a condition report, an appraiser will check for deterioration on the property, assess the materials used in the construction and thoroughly evaluate the home for any areas where maintenance will be required in the immediate or near future. 

Pay particular attention to things like the electrics, plumbing, kitchen, bathroom, and moisture damage, as repairs to these can be incredibly expensive. 

Then there’s the information about the housing association to which many, but not all, homes in Norway belong. 

It is crucial to check the association’s monthly costs and shared debt, as well as any future plans for major renovations that could increase those costs. 

Being able to tell a well-run housing association with healthy finances from one in a more perilous position can make or break whether a home is for you.

READ ALSO: How to analyse a Norwegian housing association’s finances

Showing the realtor your proof of funds 

Banks issue proof of funds certificates (Norwegian: finansieringsbevis). However, you should never show this to the realtor selling the property. 

This is because it will reveal how much money you have available, and as the realtor is working for and being paid by the seller, they will do what they can to ensure a higher price for the seller. 

Bidding on homes that you aren’t quite sure about 

Once you have your mortgage offer or proof of financing, you can put in offers on homes. 

Be warned, though. You shouldn’t just put in bids to be involved and get a feel for the market. 

You also shouldn’t put in offers on “maybes” either, as all bids in Norway are legally binding. 

This means that you could end up having to buy a property you put a speculative bid on if it is accepted by the owner. 

Agents do their utmost to prevent people from bidding on more than one home at a time, but some offers can slip through the cracks, so you also need to make sure you only bid on one property at a time. 

You also need to make sure you don’t offer more than you have, as you will be expected to follow through with the purchase. 

It is incredibly difficult to back out of a home purchase in Norway, and if you do manage to wriggle out of the process, it will likely end up costing you quite a lot of money. 

Not having money for the other costs 

Given that property is typically the largest purchase of most people’s lives, it’s easy to lose track of the smaller costs. 

One of these is stamp duty (dokumentavgift). When buying a freehold property in Norway, you will need to pay 2.5 percent of the purchase to the state in stamp duty. 

Banks in Norway don’t offer financing for stamp duty. So it’s worth remembering that you will need to pay this cost. 

One advantage of buying into a housing association is that you will not need to pay stamp duty. 

READ MORE: The hidden extra costs when buying property in Norway

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PROPERTY

The key things you need to know about purchasing property in rural Norway 

Whether it's time to up sticks and get away from Norway's cities, or you've always dreamed of owning a holiday home in the country's stunning rural areas, there is some key info you need to know. 

Published: 26 April 2024 15:21 CEST
The key things you need to know about purchasing property in rural Norway 

This article was based on several questions from a reader. The Local Norway aims to answer readers’ questions, even if it isn’t used for an article. So if there’s something you’ve wondered whether it’s practical or cultural, you can drop us a line at [email protected] 

It’s no surprise that Norway’s countryside attracts so many admiring glances from across the world as, depending on where you end up, you could be within an hour’s drive of fjords, mountains, and forests. 

The prices explained 

The website Finn.no lists almost every property for sale in the country. After a few searches, it will quickly become apparent that homes in rural Norway seem like excellent value. 

Using figures from the property firm Krogsveen, the average cost of property per square metre in Oslo is 89,000 kroner, the national average is 50,674 kroner, and in Møre og Romsdal in western Norway, the average cost is much lower at 28,722 kroner. 

Møre og Romsdal is one of Norway’s more remote counties, home to stunning regions like Sunnmøre and Sunnfjord.

READ ALSO: How much does an apartment in Norway cost?

This illustrates how much more you can get for your money in rural parts of Norway compared to elsewhere.  

There are some reasons for the price differences. Firstly, some homes in rural areas require full-time residence. If you plan on moving full-time, this won’t be an issue. 

If you are after a holiday home, this will be a barrier. Prices are typically higher in areas that are popular with leisure property owners. 

Some of the cheaper homes will be “fixer uppers”, even if you want to keep the home’s original charm. Bathrooms, kitchens, plumbing and electrics can all be incredibly expensive. 

Furthermore, investing in these areas of the home is unlikely to directly increase the property’s value due to the low demand. 

Farms should be avoided 

The charm of a Norwegian farm is difficult to avoid, lots of room, a large welcoming home and bright red farm buildings. 

However, these buildings are worth avoiding unless you intend to use the property for farming. 

Rules on the ownership of agricultural properties date back more than 1,000 years, and there are a few key things to be aware of. 

Firstly, you will need to live on the property full-time and typically use it for its intended purpose: farming. You will also need to apply for a license to own the property. This is part of a government act to protect agricultural land. Then, there are a number of special rules to ensure that some farms remain in a family line. 

Farming in Norway isn’t a particularly profitable venture either, so taking over a farm may not be as attractive once all the rules are laid out. 

The rules for foreigners buying rural properties 

Norway’s property market has no restrictions on whether foreigners can buy property. 

This means you can buy a property in Norway’s stunning rural regions. However, there are several practical obstacles. 

Most practical issues don’t apply to full-time residents. 

However, non-residents can’t get a Norwegian mortgage as they have ties and income to the country. 

Furthermore, not having an electronic ID and identity number will make it quite difficult to put in bids on homes, set up utility bills for the property, and get a bank account to pay these bills. 

If you manage to purchase a place, you can obtain a D-number from the Norwegian Tax Administration to try to open bank accounts and pay bills. 

Other practical info

For starters, you will likely need access to a car if you buy a place in the countryside. 

Owning a car will be crucial for reaching amenities, and depending on how remote you choose to go, you could end up a 30-minute drive away or need a car suitable for tackling difficult terrain to reach main roads. 

You’ll also depend on a car to get to and from work and to ferry kids to school and back. 

Houses in rural areas may also have much more expensive running costs. Older, larger properties are notorious for sky-high energy bills in the winter. 

Of course, finding a suitable job to match your career ambitions can be much more difficult in rural areas than in the bigger cities. 

READ MORE: The downsides of life in the Norwegian mountains you should know about

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