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PROPERTY

How does home buyer and seller insurance in Norway work?

When purchasing or listing a home in Norway, you can take out insurance on the transaction. So, what do policies offer, are they required, and should you consider one?

Published: 9 April 2024 12:40 CEST
Pictured is a home in Norway.
What's the difference between buyer's and seller's insurance in Norway, and do you need either?

Insurance policies in Norway cover both the sale (boligselgerforsikring) and purchase (boligkjøperforsikring) of a property. 

Both policies cover any potential expenses that could occur with a property. This could be if the property had a fault not previously picked up on or to cover legal costs if the buyer wants to make a claim against the seller. 

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

Property purchases in Norway have a liability period of five years, and insurance covers the entire liability period. 

Seller’s insurance covers the party who sold the property if there was an issue with the home and will cover the buyer’s costs. 

The rules for selling property in Norway have changed in recent years. Previously, homes could be sold “as is,” which meant the buyer was more responsible for costly issues with the home. 

However, this rule has now been phased out, and most properties in Norway come with an extensive property report where any known and potential issues with the home’s condition must be listed. 

The seller of the home is far more responsible for errors and defects with the house that the buyer was not aware of when making the purchase compared to when homes could be sold “as is”. 

READ MORE: The important small print to look out for when you buy a house in Norway

Still, sellers can, in some cases, be responsible for damage and issues that they were not even aware of. For example, prior work carried out in kitchens and bathrooms that weren’t approved by the authorities would count, as would water damage. 

When this happens, the selling party usually has to repay part of the purchase price or discount the home. 

Seller’s insurance can also be used when issues cost more than 10,000 kroner to correct, with the policyholder paying the first 10,000 kroner. 

The insurance also includes lawyer coverage in the event that the claim goes to court. 

Seller insurance is normally priced at between 0.2 and 0.55 per cent of the sale price. 

Home sellers’ insurance isn’t a legal requirement, and you can sell a home without it, although many brokers recommend it. 

Most homes sold in Norway are sold with seller’s insurance, which is especially recommended when selling older, larger properties. 

The condition report that is now common also means that the risk of the buyer discovering any undisclosed issues with the home is quite low, but not zero. 

Whether the seller has taken out insurance shouldn’t matter too much to buyers. Just because a seller has such insurance doesn’t mean the home is fault-free or that you will have greater rights than if the seller didn’t have insurance. 

Buyer’s insurance, meanwhile, covers legal costs incurred by buyers if they wish to file a complaint. 

For example, should their be issues with the pipes in the property that neither party knew about, seller’s insurance covers the cost of the repairs, while buyers insurance covers the legal costs of making the complaint. 

Therefore, the main perks are having access to a lawyer if you need one and avoiding legal bills. 

However, you most likely won’t end up using your buyer’s insurance policy, as the seller’s insurance resolves many disputes before going to court. The insurance company also decides whether it’s worth taking your case to court.

While insurance for sales is standard practice, buyer’s insurance is less common. 

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ECONOMY

What lower inflation in Norway means for you 

Inflation in Norway continues to slow. However, the cost of living in the country isn’t slowing as quickly as economists expected. Here’s what that means to you. 

Published: 10 May 2024 11:44 CEST
What lower inflation in Norway means for you 

Inflation is slowing 

Norway’s Consumer Price Index, CPI, which measures changes in prices for household goods and services, has slowed yet again. 

Between April last year and the same month this year, prices in Norway rose by 3.6 percent. It marks the third time that price increases have been below four percent since the start of 2022. 

The figures, released by Norway’s national data agency Statistics Norway, mark the fourth month in a row where the 12 monthly inflation figure has been lower than the yearly figure from the month before. This means prices are rising less rapidly than before. 

“Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before,” Espen Kristiansen at Statistics Norway said. 

Food remains one of the biggest contributors to inflation 

The price of food and non-alcoholic beverages rose by 3.3 percent from March to April, according to Statistics Norway. 

Chocolate, soft drinks, coffee, and citrus foods saw the biggest price increases, which the national data agency called “unusual.” 

What wasn’t unusual, however, was the cost of food rising following Easter, when many supermarkets ran offers to compete for customers. 

“The rise must be seen in the context of the fact that large offer campaigns in connection with Easter dampened prices in March,” Kristiansen said. 

The figures for April show that food prices in Norway have increased by 6.8 percent compared to a year ago. 

The rising cost of food and drink in Norway could potentially outgrow wages this year, even if expected pay bumps will outpace forecasted inflation overall. 

Economists expected inflation to fall more 

Inflation hasn’t eased as much as some experts were expecting. Core inflation, which excludes energy prices and taxes, was measured at 4.4 percent year on year in April. This is above what economists surveyed by the newswire Reuters expected. 

Norges Bank, the country’s central bank, raised the policy rate to a 16-year high of 4.5 percent in December. The bank has said that inflation should generally be around two percent, so it has used interest rates to curb price increases. 

As inflation isn’t falling much quicker than expected, economists predict that the central bank may wait until December before slashing rates – which for consumers means that loan and mortgage repayments will remain high for the foreseeable future. 

“The fall in inflation has not been much greater than Norges Bank has thought. This, therefore, indicates that an interest rate cut may come in December instead of September,” Kjersti Haugland, chief economist at DNB Markets, told public broadcaster NRK. 

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