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 one 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 dive deep into our journey 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.

However, 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 put down roots and 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 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 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.

When it comes to buying an apartment in Stockholm, property prices have generally gone up over time. This is because of things like more people moving to the city, its worldwide popularity, and low loan interest rates. Apartments in popular areas can be expensive, and if you want one, you have to move fast because of the stiff competition.

In short, 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

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:

1. The first-hand contract is an agreement between the tenant and owner of the building.
2. 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. Though 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.

Step 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 hunting for a home.

Before diving in, it’s crucial to do some research on interest rates. If you’re in need of pointers on this, I’ve got a detailed blog post about the top ways to secure a loan in Sweden.

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 won’t cost you a dime. In fact, with your BankId, you can easily apply online. I received my loan promise from SBAB just a few minutes after my application.

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.

Step 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, don’t worry; 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.

For more information and options on viewing an apartment, check out the Tips and Guide from Svenskfast.

Step 4: Place your Bid

In Sweden, the bidding process is quite unique. While a property’s price might exceed its original listing, there are instances where the final price is lower than the starting point. This isn’t the case for newly constructed homes, which usually come with a set price and are offered to the first interested party.

Interestingly, a bid isn’t legally binding in Sweden. A potential buyer or seller is only bound to the deal once both parties have signed the purchase agreement. Even more, a seller isn’t obligated to choose the highest bid. They have the freedom to select any offer, or even to withdraw from the sale before the contract’s signing.

Throughout this process, estate agents play a pivotal role. By law, they must convey every bid to the seller and maintain a record of all bids. This record is then shared with both buyer and seller at the deal’s conclusion. Being aware of these nuances ensures a more informed and adaptable approach during the property purchasing journey.

Some proactive brokers might try to seal a deal even before official bidding begins, opening the door for early negotiations.

For instance, we were once drawn to an apartment, which, coincidentally, was near my then-rental place. A feature that stood out was its spacious balcony, although I later realized it wasn’t much use in the winter.

After a lengthy back-and-forth on the price, we made our final offer. To our surprise, another buyer pitched a similar bid around the same time. The seller then countered, asking for an extra 5,000 SEK. It might not sound like much, but something didn’t sit right with us.

Ultimately, the thrill of acquiring that particular place faded, leading us to step back—a decision I later felt grateful for.

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.

Step 5: Call the Bank for a Final Assessment

The loan promise is essentially an initial estimate from the bank indicating the loan amount you could potentially receive. Once you’re successful in your bid or you’ve settled on a price, it’s important to contact the bank for a comprehensive evaluation before signing anything.

In our experience, after viewing an apartment on a Monday, I rang the bank the very next day expressing our interest. The bank then reviewed several factors, from our finances to the state of the property and even the broker’s credentials. They had initially mentioned it might take a day or two for a decision. However, to our surprise, we received mortgage approval in just a few hours! Elated, I immediately coordinated with the broker to finalize the paperwork that very day.

The entire process was surreal – securing an apartment in Stockholm and getting mortgage approval so swiftly was beyond our expectations.

Step 6: Sign the Contract

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!

Step 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:

1. Signed a few final documents.
2. Made the final payment, covering the remaining 5% of the down payment.
3. Received the keys and the code to the building’s entry door from the broker.

Step 8: Get a home insurance

As soon as you’ve moved into your new apartment, it’s important to protect your investment by securing a reliable home insurance policy. Accidents can happen, and unforeseen events like water damage or theft can be financially burdensome without proper coverage.

I have a separate post about home insurance in Sweden, where I discuss more details. Our home insurance is with Hedvig, and they were the ones who provided us with an apartment after a water leakage incident in our rental apartment.

Important Translations When Buying an Apartment in Sweden

1. villor = villa
2. radhus = townhouse
3. lägenheter = apartments
4. nyproduktion = new production
5. område = area
6. slutpriser = final prices
7. acceptpris, accepterat pris = accepted price
8. amortering = amortization, the amount to pay off your loan
9. ränta = interest rate at the bank
10. månadsavgift or avgift = association fee
11. driftkostnad = operating cost
12. lånelöfte = loan promise, the estimated mortgage loan you can get
13. mäklare = broker
14. visning = viewing

Tips on Buying an Apartment in Stockholm

1. Talk to different banks so they can compete on the interest rates. Check out this post on the best ways to get a loan in Sweden.
2. 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.
3. 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.
4. Expect a price increase of around 10% (sometimes more) because of the bidding. 
5. You can negotiate directly before the bidding starts. The broker will contact you the next day, and you can discuss your offer also. 
6. Research on the finances of the building’s association. 
7. Consider the avgift and driftkostnad on top of your amortization.
8. Don’t sign on the first apartment you see. Visit at least 5 apartments first before you make a decision. 
9. Get a loan promise!
10. 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

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 of flowers, 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.

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