Buying the house you are renting, what should you pay attention to?

Many people who rent property are given the opportunity by their landlord to buy their rental property. In this article, we explain to you what to look out for and what all you need to arrange as a tenant/buyer.

Why does the landlord want to sell the property to me and is this even a good deal?

First, this. Some people wonder why the landlord wants to sell the rental property to his tenants. For a landlord, this often has the following reasons:

Many tenants have rent protection and simply cannot be evicted by the landlord. Selling to the tenants is therefore very practical and easy for the landlord.
Selling to incumbent tenants is often the easiest way to go, though. The landlord does NOT have to take care of most of the efforts involved in a regular sale (sales preparation, photographer, Funda, broker, etc.).
There is often awarding involved. In a good respectful and pleasant landlord-tenant relationship, a landlord is often willing to simply give it to a tenant.

This should be agreed upon if you buy your rental property from your landlord

Here is a super handy list of points to agree with the landlord when you buy your rental property. No worries, we’ve created a draft email for you here with these points that you can use and so you don’t forget anything.

First, agree on a purchase price. No worries, later in this article we explain how to check that you haven’t overpaid.
Agree on what financial caveats you need (to get a mortgage).
Agree the date on which ownership of the property passes to you.
Agree what items (moveable items) will be left in the home (e.g., closets, curtains, washing machine, etc.).
Agree on which date a deposit/bank guarantee should be paid to the notary (10% of the purchase price).
Agree whether or not you will have the home structurally inspected first.
Agree to have the house appraised before signing the deed of sale or before the expiration of the legal cooling-off period for the bank (but also to find out if you will not pay too much for the house).
Agree on who gets to choose the notary and who pays the notary (usual practice is for the buyer to choose the notary and also pay).

A handy sample email for the agreements you make when buying your home can be found here (in English and Dutch).

What should you arrange if you bought the property you are now renting?

You have to take care of all this.

Read carefully the title deed and any other documents the owner sends you. Be aware that if you buy a rental property from a Housing Corporation there are sometimes special clauses included in the title deed either in the purchase agreement about a buy-back arrangement (you must first offer the property to the Corporation if you sell it in the future) or a rental prohibition (you may not, or may never, rent out the property),
Get a quote from a notary of your choice for the cost of taking care of the deed of purchase, mortgage and delivery. Notary fees (also depending on the region) can vary from approx. €1200 to €1800. Give the notary with whom you want to go into business agreement on his/her offer.
Consider whether you want to register the purchase of this property in the land registry. Please read this brief this article to understand why you should or shouldn’t. Communicate this choice to the notary in the next step.
It is VERY recommended that you and/or seller take a moment to fill out and sign this List of Items about all the things that remain/ belong to the home.
Make sure that the arrangements you have made are recorded in a purchase agreement as soon as possible and this purchase agreement is signed. The easiest way is if you have your chosen notary draw up the purchase agreement. You can then simply give this notary the ‘ confirmation of sale ‘ that you prepared along with a copy of sellers+your ID, address, marital status, email address, phone number. Optionally, you can also have the purchase agreement drawn up by a broker, but the cost is expected to be the same. Also email the notary all documents/documents you received from the seller (energy label, CoE documents, proof of ownership, etc.).
Schedule a building inspection. You can do this throughout the Netherlands at companies such as Woningkeur or Perfect Keur, for example.
Are you looking to remodel and want to finance that remodel with your mortgage? If so, please fill out this remodel specification. You’ll find an example of how to fill it out here.
Arrange for a good appraiser to make an appraisal report as soon as possible. Clearly indicate to the appraiser that you are currently renting the property and you are buying your current rental property from the landlord. If you want to remodel that home, indicate this to the appraiser right away. Is your property located in North Holland? Give us a call or send us a this form.
Inform your mortgage broker about the purchase. Please briefly send him/her the “Confirmation of Purchase” by e-mail and indicate that you have already engaged an appraiser.
When the appraiser sends you the appraisal report, send it to the appraiser DIRECTLY.
Constantly provide the mortgage broker with all requested info and documents to proceed with the mortgage application. Check with your mortgage advisor at least once, preferably twice a week to see how the mortgage application is progressing and if he/she needs any documents or other information (trust us, this is often where the most delays occur).
Note in bold in your calendar when the financial reservation expires. If the mortgage is not finalized by that date, apply in writing to the seller for an extension of the financial reservation.
Is the financing in place? If so, please inform the sellers about this.

Various arrange

Is internet, gas, electricity and water not yet in your name? Then arrange this.
Take out property insurance in good time (except for apartments, where this is usually already taken care of by the owner’s association).
You will receive a bill of sale and a draft deed of delivery from the notary about 1 week before the transfer of ownership. Check this one out.
If the bill of settlement says something must be paid to the notary, pay it DIRECTLY.
Bring your valid ID (passport/driving license/ID card) with you to the notary!
Agree with the seller on a final inspection (see next point)

Final inspection

It is customary before you go to the notary, to first inspect off in the home with the seller. You then go to see if the property is completely in accordance with what you agreed to in the purchase agreement. That is, whether all items are there that would be left behind, no damages have been added, etc. You also then record your meter readings.

In the case where the tenant is buying, it is a little less exciting because you are already living there. Still, we do recommend that you agree and keep this inspection. Then check at least these things. 20-30 minutes is more than enough for you.

As a home buyer, how do you know you’re not overpaying if you don’t have a buying agent?

You can check this pretty easily. After all, you need an appraisal report to apply for a mortgage. An independent appraisal report prepared by a licensed appraiser will show what the property is worth. Therefore, make sure you get that appraisal report done before you sign the purchase deed or at least before the legal cooling-off period expires. If the appraisal report reveals that you agreed on a purchase price for the home that was far too high, you can still cancel the purchase with just 1 email or phone call.

Attention! One problem, however, is that many appraisers take at least a week to prepare an appraisal report. We (VK Makelaars&Taxateurs) usually deliver an appraisal report within 2 business days already. So feel free to call us (we work in a large part of North Holland).

Notary

After this, you go to the notary. Again make sure everyone has his/her valid ID with him/her, there is buildings insurance on the property, and the notary’s invoice has been paid. Are there any problems with the inspection (for example, there is a puddle of water in the living room)? If so, call the notary public immediately for advice.

Hopefully you got a lot out of this article.

If you need help, for example, getting your new home appraised, send us a message or give us a call.

Need help?

We can also COMPLETELY INVEST you if you buy your rental property. For this we charge a flat rate of €3500, – incl. VAT. You will then receive our intensive help throughout this process and our fees will only be charged if the property is successfully purchased (i.e. on a no cure no pay basis). The advantage of this is that we also check really well that you have made a good deal commercially, legally and constructionally. If you only have us as appraisers, we can help you with this as well. Just drop us a line or give us a call.

Goodluck!