Buying an Apartment in Stockholm: Our Success Story
Are you thinking of buying an apartment in Stockholm? In this post, I'll share our experience and what we learned.
After discovering a water leakage in our rental apartment, we had to move out within two days. Our home insurance arranged a temporary place for us while our original apartment was being repaired.
Initially, they gave us one-month accommodation, but we could extend it if our rental wasn't ready yet.
Juggling between two apartments - with most of our belongings in the damaged and only essentials in the temporary one - became quite stressful for us.
That's when we chose to buy an apartment in Stockholm. But what was the process like? Was it straightforward?
In this post, I'll delve into our experience of buying an apartment in Stockholm, sharing the challenges we faced, the insights we gained, and some tips for anyone considering a similar move.
Why Buy an Apartment in Stockholm?
When it comes to finding a long-term and stable living situation, one option that many consider is buying an apartment in Stockholm. The city's rental market can be quite challenging, with limited availability of extended rental contracts. This often leads to a cycle of short-term leases and constant relocations due to housing restrictions, which can be exhausting.
But, owning an apartment offers a way to break free from this cycle and create a space that truly reflects your personality. It's an opportunity to claim a small piece of stability in a fast-moving city like Stockholm.
Of course, buying an apartment is not the solution for everyone, as it does require a significant investment. But for those who can and are tired of the transient nature of the rental scene, purchasing a property can be a rewarding and fulfilling choice.
What's the Stockholm Housing Market Like?
Renting an apartment in Stockholm is mostly about "first-hand" and "second-hand" leases. People prefer first-hand leases because they're stable, but they're hard to get because there aren't many available and they're in high demand.
This leads many to choose second-hand leases, which are short-term sublets that can be pricier.
The dynamics of buying an apartment in Stockholm have shifted somewhat. The interest rates have gone up, leading to a fall in apartment prices.
Finding a place to live in Stockholm has its challenges, so if you're new to the city, it's important to know what you're getting into and be ready to wait for the right opportunity.
How to Buy an Apartment in Stockholm: Step-by-Step
1
Understand the forms of housing in Sweden
There are different types of housing in Sweden, and each has its advantages and disadvantages.
Hyresrätt (Tenancy)
This means renting an apartment from a landlord. In Sweden, we have two types of tenancy contracts:
- The first-hand contract is an agreement between the tenant and owner of the building.
- The second-hand contract is an agreement between the tenant and the person who has a first-hand contract or the owner.
Most expats or immigrants in Sweden live in second-hand housing. The downside? You'll probably need to move after two years since it's difficult to find an apartment for rent in Stockholm that's long term.
I lived in two rentals before buying my own place. Take a look at my first apartment in Stockholm!
Bostadsrätt (Condominium)
When you invest in a bostadsrätt, you're essentially buying into a housing association known as BRF (bostadsrättsförening). This grants you the right to reside in a specific apartment within that association.
One of the conveniences of this arrangement is that the housing association handles the exterior maintenance. In return, you pay a monthly association fee (avgift).
Choosing bostadsrätt often proves more economical in the long haul compared to regular tenancy (hyresrätt). Moreover, it provides you the liberty to customize your living space. However, for significant changes, you'll need to obtain consent from the housing association. And if you're considering subletting, with the association's approval, that's an option too.
Äganderätt (Ownership)
Äganderätt, or owner-occupied, means you fully own the property you purchased. While this used to be exclusive to detached or row houses, some apartment buildings now offer äganderätt. This ownership gives you more freedom than bostadsrätt.
2
Get a loan promise from a bank
A loan promise, for those new to the term, is essentially a bank's commitment to lend you a certain amount when you're ready to make a purchase, ensuring you know your budget when looking for a home.
When exploring your options for a mortgage loan, SBAB is often highly recommended as they have some of the most competitive interest rates out there. If you're a union member, you might find another advantage: many unions negotiate even lower interest rates for their members.
So, it's always a good idea to shop around, compare offers from different banks, and understand what your amortization might look like.
Getting a loan promise is free. You only need your BankID to apply online. Just fill in the details of the application form, sign with your Bank ID, and you'll get your loan promise within a few minutes.
Keep in mind, when buying an apartment in Stockholm or anywhere in Sweden, this loan promise typically has a validity of three months, so it's important to time your application right with your home search.
Some tips for applying for a loan promise
Acquiring multiple credit reports via UC (Upplysningscentralen) can negatively impact your credit assessment. Services like Lendo can help you look around for the best loan offers in a single report via UC. This way, you get to compare different offers without hurting your credit score.
Be sure to check out my post on the top ways to secure a loan in Sweden.
3
View an apartment
Viewing apartments in Stockholm can be an exciting process, but it's essential to know your options. Some apartments require pre-registration for viewings, while others host public viewings, where you can just walk in. At these public sessions, expect to see other potential buyers.
Public Viewings:
We tried this once, and the experience was decent but quite crowded. You can't really take your time to inspect the apartment, and you might have to wait to speak with the broker. While you'll receive a brochure with property details in Swedish, the same information is available online.
Private Viewings
My preference leans towards private viewings. Instead of going through the standard pre-registration for public ones, I directly reached out to the broker. Before scheduling, I inquired about the seller's expected price, details of the apartment, and availability. If our budget aligns, or I sense wiggle room for price negotiations, I'd arrange a private tour.
Also, you can comfortably discuss matters, especially price, and brokers often showcase other units and facilities in the building.
Tips
- Make a list of questions about the apartment's condition and what's included.
- Check the water pressure, natural light at different times of the day, and storage spaces.
- Walk around the area to check for local amenities and transportation options, and assess the noise levels.
- Consider the parking situation if you own a vehicle.
- Review recent sales in the area to understand market conditions.
- Look out for any damage or things that need fixing.
4
Place your bid or offer
In Sweden's housing market, bidding can be unpredictable -- sometimes ending below the asking price, except for new builds that have a fixed price.
A bid isn't final until a contract is signed, giving sellers the flexibility to accept any offer or withdraw before sealing the deal.
Real estate agents are legally required to pass all bids to the seller and keep a record that's shared with both parties at the end. This ensures transparency throughout the purchase process, which is important for making decisions.
Negotiations can get intense, and sometimes deals are attempted before bidding starts. We experienced this first-hand with an apartment near our rental. After negotiating, we made a final offer. When asked to increase our offer, we chose to withdraw.
Our own experience
When we bought our apartment, we didn't have to go through any bidding process. It was a brand-new apartment, and the association was selling it directly. This saved us a lot of time and relieved us from the dreaded process of buying an apartment.
5
Call the bank for a final assessment
The loan promise is basically the bank's first estimate of how much they might lend you.
After you win a bid or agree on a price, get in touch with the bank for a full review and financial check before you sign anything.
From my own experience, we viewed an apartment on Monday and by Tuesday I contacted the bank to show our interest. They looked at everything from our money situation to the property's condition and the broker's background.
They said it might take a couple of days to decide, but we got our mortgage approved in just hours! I quickly got in touch with the broker to wrap up the paperwork the same day.
The whole experience was unbelievable — getting an apartment in Stockholm and such fast mortgage approval was more than we hoped for.
Check out my post on the top ways to secure a loan in Sweden to learn more about optimizing your finances and navigating the loan application process effectively.
6
Sign the contract and other paperwork
At the contract signing, the broker will review all the paperwork and outline the next steps for you. Since the documents are in Swedish, you need to pay attention, especially to these sections:
Depositionsavtal (Deposit Agreement)
- Fastighetsmäklarens klientmedelskonto: You'll have to transfer a 10% down payment to the broker's account. When making the payment, ensure you include the reference mentioned under "referens att ange vid inbetalning."
- Handpenning: The amount you'll need to transfer is the 10% down payment.
- Datum för betalning av handpenning : This is the deadline to deposit the money.
- Tillträdesdag: This is your move-in date, often referred to as "access day."
Överlåtelseavtal (Transfer Agreement)
- Säljare: Seller
- Köpare: Buyer
- Köpeobjekt: Details of the apartment you're purchasing, such as apartment number, address, and association.
- Köpeskilling: Apartment's purchase price.
After the contract is signed, send the broker a 10% down payment within two weeks. The final 5% is due on your move-in date.
I got my mortgage through SBAB. They required me to open a savings account and deposit the 5% down payment. This amount will automatically be deducted on your move-in day.
Lastly, provide the loan documents to your bank and be ready for your move-in day. Exciting times are ahead!
7
Move into your new home
This was a day we'd been eagerly waiting for! Looking back, from when I first moved to Sweden and settled into my first Stockholm apartment, to now owning an apartment with my husband - it's been quite a journey!
On move-in day, we visited the broker’s office to complete the process, which took less than an hour. During this time, we:
- Signed a few final documents.
- Made the final payment, covering the remaining 5% of the down payment.
- Received the keys and the code to the building's entry door from the broker.
8
Get a home insurance
Once you've settled into your new place, it's smart to get good home insurance. It'll help cover costs if something unexpected, like a leak or theft, happens.
Check out my detailed post on home insurance in Sweden for more info. We use Hedvig for our insurance–they even sorted us out with a place to stay after a water leak in our last rental.
Important Translations When Buying an Apartment in Sweden
- villor = villa
- radhus = townhouse
- lägenheter = apartments
- nyproduktion = new production
- område = area
- slutpriser = final prices
- acceptpris, accepterat pris = accepted price
- amortering = amortization, the amount to pay off your loan
- ränta = interest rate at the bank
- månadsavgift or avgift = association fee
- driftkostnad = operating cost
- lÃ¥nelöfte = loan promise, the estimated mortgage loan you can get
- mäklare = broker
- visning = viewing
Tips on Buying an Apartment in Stockholm
- Use Lendo to get the best loan offer with just one UC report. Check out this post on the best ways to get a loan in Sweden.
- Research about the location. Don't solely depend on online information. Explore the area in person and you'll quickly get a feel for it.
- Research the area's average price per sqm. Don't get too excited when you see a cheap apartment. It is cheap for a reason.
- Expect a price increase of around 10% (sometimes more) because of the bidding.
- You can negotiate directly before the bidding starts. The broker will contact you the next day, and you can discuss your offer.Â
- Research on the finances of the building's association.
- Consider the avgift and driftkostnad on top of your amortization.
- Don't sign on the first apartment you see. Visit at least 5 apartments first before you make a decision.
- Get a loan promise!
- Call your bank before bidding & signing the contract.
Websites for Buying Apartments in Sweden
There are several housing sites that you can use, but I only browsed mostly at Hemnet and Booli.
It is also good to browse different brokers' and housing developers' websites such as:
- Svensk Fastighetsförmedling
- Skandia Mäklarna
- UNIK Fastighetsförmedling
- MOHV
- Brabo Stockholm
- IKANO Bostad
FAQs About Buying an Apartment in SwedenWhat are the different types of housing options available in Sweden?
In Sweden, you can choose between "hyresrätt" (tenancy), "bostadsrätt" (condominium), and "äganderätt" (ownership) as your housing options. Each has its advantages and considerations.What is the process for getting a mortgage loan in Sweden?
To secure a mortgage loan, you'll need to approach different banks to compare interest rates and get a loan promise. A loan promise serves as an estimate of how much the bank can lend you and is valid for a limited time.How does the bidding process work when buying an apartment in Sweden?
The bidding process is common in the Stockholm housing market. Bidders submit their offers, but until the buyer and seller sign a purchase agreement, the bid is not legally binding. The seller has the right to accept or reject bids.What fees should I be aware of when purchasing an apartment in Stockholm?
When buying an apartment in Stockholm, you'll need to consider fees such as transfer fees, mortgage fees, association membership fees, and individual measurement and billing costs for utilities.Are there restrictions on renting out my purchased apartment?
If you opt for "bostadsrätt," you can usually sublet your apartment with approval from the housing association, but typically for a limited duration, often up to two years.
Final Thoughts: Buying an Apartment in Sweden
In conclusion, our experience of buying an apartment in Stockholm has been surprisingly smooth and positive. Purchasing directly from the building's association eliminated the need for a bidding process, making the experience more straightforward.
A few weeks after we moved in, SBAB pleasantly surprised us by sending a thoughtful gesture -- a lovely bouquet, which added an extra touch of warmth to our entire home-buying process.
I hope that sharing our experience has provided you with valuable insights into what it's like to buy an apartment in Stockholm or anywhere else in Sweden.
Remember that each person's experience may vary based on the type of housing, location, and individual preferences. Whether you're considering "bostadsrätt," "hyresrätt," or "äganderätt," thorough research, careful planning, and understanding the associated fees will contribute to a successful and fulfilling home-buying journey.
