The road home – buying a residence in Sweden

In Sweden there are primarily three forms of housing commonly that are used:

1. Property – You live in your own house on your own land. If you choose to buy a house on its own land, you will essentially make decisions and assume responsibility for everything to do with your property.
   
   

2. Housing cooperative apartment – You live in an apartment and have the right to live there. You and the other people living in the building own the property and are members of a communal association, known as a housing cooperative association. 
   
   

3. Rental apartment – You live in an apartment and rent your residence. You can also rent a house, but the most common arrangement is that you rent an apartment and pay a monthly sum.

In addition to the three most common forms of housing, there are other kinds of housing arrangements. There are, for example, owner apartments, a concept where you own your apartment without a housing cooperative association. This is similar to the form of housing found in many other countries, but is unusual in Sweden. Another form is a lease, which means that you own the house but not the land on which the house stands, and you rent from the landowner.

If you choose to live in a housing cooperative apartment, you are at the same time a member of a housing cooperative association and make decisions about the property together with the other members of the association. You only have the right to make decisions about matters within your own walls, but even then the association may have to approve certain renovations or refurbishments.

What is expected of you as a member may vary significantly, depending on how many members and homes are included in the association. Put simply, you can say that the smaller the association is, the more you must be involved as a member. In a bigger association the level of commitment is usually not as high, but there may also be less opportunity to have an influence. It is important to be aware of this before you decide where and how you want to live.

In Sweden, all estate agents are university educated and must be registered with a governmental supervisory authority, the Swedish Estate Agents Inspectorate. The activities of estate agents are regulated in a special law, the Swedish Estate Agents’ Act, and there is therefore no need to involve lawyers or solicitors when purchasing a residential property in Sweden. The estate agent is responsible for creating the documents needed, and legally appropriate, for a property transaction.

In Sweden it is the seller who engages and pays the estate agent. The estate agent often has an exclusive right a property, which is regulated in an exclusive rights agreement. It is therefore extremely unusual for one property to have several estate agents. By law, the estate agent is obliged to safeguard the interests of both parties, so there is therefore no need for a buyer’s estate agent in Sweden. 

The estate agent is responsible for conveying the property, bringing together buyer and seller, and must also make sure that the seller tells the buyer everything the buyer needs to know about the property. It is therefore the estate agent’s responsibility to compile all the necessary information and to make sure that the buyer receives it.

In Sweden there are requirements for how much you must repay on your mortgage, a mortgage requirement, and a rule that means that you may not borrow more than 85 per cent of the property’s value, a mortgage limit. One tip is to talk to different banks so that you obtain good information about these rules and what your various options are when planning to buy a property. Also make sure that you obtain a written loan commitment at an early stage of the process. If you need to borrow money to buy the property, the estate agent will ask you about this when the bidding process starts or before you sign the contract.

There are many different ways to look for properties, and finding your future home can be time-consuming. There are many websites online that can make the process easier and more efficient. The most popular sites for those looking for housing are Hemnet.se and Booli.se, but you can also go directly to estate agents’ own websites. These sites provide a lot of price statistics and comparative figures, which can be useful. One good piece of advice is to visit various residential areas and arrange plenty of viewings.

The most common form of property viewing in Sweden is what is known as an open viewing. This means that the estate agent announces when the viewing will take place in the advertisement and invites all interested parties to visit the property on the designated date and time. In most cases there is also an opportunity to book individual viewings with the estate agent.

One pattern that has become increasingly common is that interested parties request an advance viewing of the property, i.e. to be able to go and view the property before the open viewing. In some cases this can result in the property being sold before the open viewing takes place. Interested parties are actually able to submit bids on the property at any time, and the seller can choose to accept a bid and sell the property even before the advertised viewing. If you are very interested in a particular property, it can therefore be a good idea to let the estate agent know about this at an early stage. 

During the viewing it is important that you take the time to investigate the property carefully. This is because you, as buyer, have an obligation to investigate the property, what is known as a duty to investigate. This means that once you have signed a contract you cannot invoke the seller’s responsibility for any defects or blemishes in the property that you could have discovered. It can be difficult to perform a detailed investigation during an open viewing, so it can be a good idea to request an individual viewing. You can then investigate the home in peace and quiet before you make up your mind.

It is not unusual to seek the assistance of an inspector to investigate the property. The inspector investigates almost everything, but there are things that are not included in a normal inspection. The inspector tells you which elements are included in the inspection and which things you must investigate yourself.

The seller can also choose to have the property inspected before it is put on the market. As the buyer of such a property, you will have an inspection record to study. This is a simple, convenient approach, but in these cases too it is important for the buyer to study those areas that are not included in the record.

If you are going to buy a housing cooperative property, you must also study the association’s finances. The finances are usually reported in the brochure you receive in connection with the viewing; otherwise you must make sure that you study the latest annual report and the association’s statues. If you are not used to reading annual reports, it can be a good idea to seek advice. If, for example, you have to borrow money for the property purchase, the bank can help you to review the association’s finances. 

It is relatively common for there to be a bidding process, which results in the price in the property advertisement being exceeded. However, it may also happen that the closing price is lower than the starting price. For most newly built homes, there is instead a fixed price, in which case the normal rules on priority apply, and the first party to register an interest is given the opportunity to buy the property.

A bid in Sweden is not legally binding for the person submitting it. The bid is not binding until both the buyer and the seller have signed a purchase agreement. Nor is the seller obligated to sell at a certain price, but they can choose to pull out of the sale at any stage of the process up until the signing of the agreement. The seller can also choose to sell the property to a bidder who has not submitted the highest bid. 

The estate agent is obligated to pass on to the seller all bids that arrive before the contract has been signed. Under Swedish law, the estate agent must maintain a list of all bidders and the bids placed. This list is made available to buyer and seller in connection with the date of taking possession, when the estate agent hands over his/her record.

The contract outlines the rules that apply to the transaction, for example when payment is to be made. Firstly, it applies to the down payment. In normal cases, you usually have seven to ten days to make a down payment, which is generally 10% of the purchase price. The remainder of the purchase price is paid on the date of taking possession.

The contract also regulates what is to be included in the purchase over and above what is considered normal. It is a good idea to read the section entitled What is included in the property? or to ask your estate agent if you are uncertain. 

A purchasing contract also specifies any terms and conditions of purchase. These can involve, among other things, conditions for a mortgage or an inspection. In the case of housing cooperative apartments, there is, for example, always a condition that the buyer must be approved by the association and become a member of it. When you draw up a contract, the estate agent will therefore document the buyer’s identity, which is an obligation under law.

In some cases, signing a contract can seem stressful. It is a good idea to talk to the estate agent if you have any questions before signing the contract. If you still feel uncertain, it can be useful to ask a friend to come along or to engage an interpreter just for the contract signing. 

The period between contract and taking possession is a good time to make preparations – for the seller to leave their home and the buyer to move into their new one. 

The final cleaning is something that concerns both parties and is regulated clearly and unambiguously in the contract. A final cleaning is very thorough and is difficult to do oneself. As a seller you should therefore find out how extensive the final cleaning is and then make a decision about whether or not you should engage a cleaning firm.

If anything in the property stops working because of normal wear and age between the sale and the date of taking possession, the usual practice is that the buyer meets the cost. If, however, something stops working or deteriorates significantly as a consequence of the seller’s negligence, or because of an accident, the seller is normally responsible for restoring or replacing whatever has stopped working.

The date of taking possession is the day on which you pay the purchase price and receive the keys to your new home. It is now that you have full and complete responsibility for the new home, regardless of whether you actually move in on that date or do so at a later date. You should arrange insurance for your home as from the date of taking possession.

On the date of taking possession, the buyer and seller meet at the estate agent’s office or at the buyer’s bank. During this meeting the estate agent presents the final documents to the seller and the buyer. The estate agent also has contact with the buyer’s and the seller’s bank to make sure that everything proceeds smoothly. Finally, the estate agent hands over a record describing the various tasks the estate agent has performed during the course of the assignment. This documentation also includes the bid list, which states which parties have participated in the bidding process, if relevant.

The elements that belong to a residence and are therefore included in a purchase are governed by law in Sweden. Examples of things normally left in a residence are wardrobes, the cooker, fridge, freezer, washing machine and tumble dryer. Feel free to ask your estate agent for more detailed information. The seller can make exceptions from these rules. In this case it is important that this is made clear at an early stage of the process, ideally before the viewing. The exceptions are then regulated in the contract drawn up between buyer and seller.

Even in the smoothest property transaction, questions can arise along the way. If, for example, something emerges that you the buyer did not expect, you must contact the seller directly. In these cases the estate agent can only offer guidance and inform both parties, without acting on behalf of either buyer or seller. Feel free to ask your estate agent about the rules that apply and how you should proceed to resolve any problems. 

If, however, you feel that the estate agent has done something wrong, you must contact the estate agent directly. If you still feel dissatisfied after an initial contact, you can submit a written complaint to the estate agent. Document the process, for example, by sending the complaint by letter or email. If you still fail to reach agreement, as a consumer you can ask to have your case heard by the Swedish Real Estate Industry Board for Consumer Disputes. 

How to purchase a new-build cooperative housing home. Follow the different steps here, from registering your interest in a home until the day you're ready to move in.

Breaking ground
Breaking ground means that a housing development is in the preparation stage prior to upcoming sales and construction. Register as an interested party now to get more information about the plans for the development. 
You also find out if you need to do anything else to get prepared for when sales begin, as some home builders require you to register with them as a prospective purchaser since this will determine your position in the queue, if any, for the allocation of homes.

For Sale
Once the register of interested parties has been processed, the remaining homes are offered for sale through publication on the website. New construction developments are often presented in separate showrooms, either at the estate agent's office or close to the construction site. 

Contact the responsible estate agent to find out how sales in the development concerned will proceed. 

Booking agreement/preliminary contract
 If you're offered a home you say yes to, it's time to sign a booking agreement or a preliminary contract.  At this stage, we recommend you review your finances and get a loan commitment from your bank. 
 If you need help finding a bank contact, ask the estate agent responsible for the development. 

Booking agreement
The booking agreement is a type of expression of interest and is signed with the builder. This often occurs in the early stages of a development when the builder is exploring the level of interest in the market. The booking agreement is not legally binding and in simple terms means the developer reserves a specific home in your name for a certain fee. The fee forms part of the total sum and will be deducted when final payment is made. 

At this stage, you may withdraw from the purchase and recoup the booking fee less an amount equal to the builder's administrative costs.

Preliminary contract
A preliminary contract is a binding agreement between you and the newly formed cooperative housing association where you undertake to purchase the home. At this stage, a financial cost calculation is prepared showing the estimated costs for the association's acquisition of the property and the estimated operating and capital costs. The costs are calculated and conditions can and may change in terms of e.g. the deposit i.e. the purchase sum, monthly fee and occupancy. However, there is legislation that protects the purchaser against unreasonable changes and which in certain cases give the purchaser the right to withdraw from the purchase. 

Because the preliminary contract is legally binding, the purchaser may not withdraw from the purchase under circumstances other than unreasonable changes. This is considered breach of contract and can lead to the payment of damages. If the association has been granted permission from the Swedish Companies Registration Office to receive advance payments, it has the right to demand advance payment from you when the contract is signed. The size of the advance payment may vary. If you paid a booking fee earlier, this amount will be deducted from the advance payment. 

When the preliminary contract is signed, the housing association will also conduct membership verification checks on you; however, you will not be formally adopted as a member before tenure is transferred.

Interior options
In many, but not all, housing developments, there is an opportunity to participate and influence the interior of the new home. The options and price differences vary from development to development. Contact the responsible estate agent for information regarding the development concerned. 

Tenancy agreement
When the cooperative housing association has drawn up a financial plan and received permission from the Companies Registration Office to let dwellings, you sign a tenancy agreement with the association; this usually takes place a few months before moving in. In many cases, a partial payment, the amount of which may vary, is required. Any advance payment previously made will be deducted from the partial payment. When you sign the tenancy agreement you become the legal owner of the home. 

The information in the financial plan is now definitive, and the estimated costs from the preliminary contract are now adopted. The purchaser cannot withdraw from the purchase at this stage without being in breach of contract, which may lead to the payment of damages.

Before the association signs the tenancy agreement, it checks whether you can be adopted as a member by the association. If you previously signed a preliminary contract, the membership checks were conducted then, but you were not formally adopted as a member until now. 

Time to sell your current home
If you plan to sell your current home, now is the time to get prepared. We’ll help you put together a sales plan that coordinates with your moving in to the new home.

Your new home begins to take shape
While your new home is beginning to take shape, you will receive regular updates about progress, and in certain developments you may also be invited to visit the construction site at specific times. 

Inspection
Before moving into your new home, a final inspection is carried out by an independent inspector who will assess whether the construction work was professionally executed. The parties involved are the builder and the cooperative housing association. 
In many cases, the purchaser also has the opportunity to attend and is able to check that any options are as they should be, since they are not covered by the final inspection.

Finally ready to move in
If no definite moving-in date was provided earlier under the tenancy agreement, it must be notified no later than three months before moving-in day. Final inspection usually takes place a few days before the moving-in date, but may not take place later than moving-in day. You will receive the keys to your new home on moving-in day. 
Because many people often gain access to their new homes on the same day, you may be given a predetermined time to use the lift to make moving in as convenient as possible.

Enjoy your new home
Buying a newly built home is usually a much longer process than buying an existing one, but once you get the opportunity to enjoy the feeling of being the first person to live there, you will know it was well worth the wait.