Buying Real Estate In Sweden vs The US

[@Ferdawoon]

A reason that the Bostadsrättsförening (BRF) don't like that people sublet their apartments too much is because they want the people living there to care about the area and the association. Both in terms of keeping the outside areas clean, tidy and calm (and not throw snus or cigarettes out from the window and down on the pavement below) since that makes the area nicer to live in, but also because everyone is financially linked to the association. Should the area start to look bad, or if people don't maintain the property because "it's not mine anyway, why should I invest time and money to keep things nice?" then the value of the property can fall and bring the value of apartments around down with it. For many Swedes their home is the biggest investment they will ever make, in terms of financial value of property, and they might even have loans with their property as collateral to buy a car or something similar. If the value of the property goes down then the Banks will not loan as much money or even tell the person to start repaying because now the collateral is worth less than their current loan. As Stefan mentions, the monthly fee goes to maintaining the property and pay for gardening, repairs, cleaning, various ventillation inspections, renovations, etc. Should people start to litter more then the price for cleaning will go up and that money must come from somewhere which means they might have to increase the monthly fees. Also be suspicious about BRFs with a low monthly fee. It could be perfectly fine when looking at other factors, but a low fee is used to make the apartments seem appealing to buyers which increases the value of the property should they want to sell. On the flipside, once there is need for an extensive renovation (such as "Stambyte" when they replace all the water- and sewage pipes in the entire building) the coffers could be very low or empty and suddenly the monthly fee will skyrocket. An adjacent BRF had to increase their fees by 30% in one go to be able to get a loan to pay for the renovation.. Similarly now with increased interest rates and all prices in gneeral going up, in some rare cases the associations have had to increase the monthly fees by about 100% just to cover interest!

[@SirIdot]

That is part of the reason, but the most important one is that the association needs it's members to do the work to manage the association and do work to keep costs down. The association needs to recruit members to sit on the board since almost all of them only allow members to sit on it. You also needs people to help out in some way, even if it's only on the "work days" a couple of days per year. If a lot of members don't live in the association then few will help out and it becomes a problem. There is also a law that the association must treat every member equally. That means that if they allow someone to rent out theit apartment for some reason, then everyone else with the same reason must also be allowed to rent out. So most associations are very strict and only allow the reasons that must be granted by law.

[@senchaholic]

This 100%

[@Thaerii]

"Also be suspicious about BRFs with a low monthly fee. It could be perfectly fine when looking at other factors, but a low fee is used to make the apartments seem appealing to buyers which increases the value of the property should they want to sell." The most common reason for the fee to be low is that the BRF is old and has paid off most or even all of its loans, but like you say it's not the only one so you should always check. Be wary if it's less than 50-60 years old and the fee is lower than you'd expect for an apartment that size. "On the flipside, once there is need for an extensive renovation (such as "Stambyte" when they replace all the water- and sewage pipes in the entire building) the coffers could be very low or empty and suddenly the monthly fee will skyrocket. An adjacent BRF had to increase their fees by 30% in one go to be able to get a loan to pay for the renovation.." When my ex and I went looking for apartments back in 2007, we looked at one in a BRF that was just about to swap out all the sewage pipes ("stambyte"), and it was a doozy. They were going to raise the fee in increments, no more than 15% a year, but when it was all said and done, it would have meant a 60% increase in total. Let's just say we noped out of there very fast! The apartment we ended up buying was built at around the same time, but that BRF opted for sealing the old pipes with plastic instead, which was done about a year after we moved in, and they had saved up for it beforehand so they didn't have to adjust the fee at all. Sure, that treatment doesn't last as long as brand new pipes, but there was a plan in place to use those extra 2-3 decades to solve the problem without having to raise the fee above what inflation would demand.

[@RobertClaeson]

Another reason is the tax status of the BRF. If more than 40% of the BRF's revenue comes from non-tenants (such as commercial units, parking spaces, or sublets), then the BRF is taxed as a business, which increases the cost for everybody (and makes the taxman happy indeed).

[@andersmalmgren6528]

@@RobertClaeson its tide to how much area is business based vs fee. So you can have 100 percent income from businesses if the area they reside in are of a certain percentage. I have a friend that has zero fee and still taxed as a BRF (äkta förening).

[@Dan-ln4kn]

Fixed interest in Sweden is between 1-10 years. We have 8 years on our house.

[@williammckinney4090]

Housing co-ops are common in NYC.

[@ManSeekingChrist]

This English explanation was extremely helpful to me as a fellow American living here. Smart decision to rent!

[@jjinwien9054]

Great to see you again on KZbin!

[@Olofberglund]

4:47 actually, most banks offer 3 months to 10 years duration on mortgages in Sweden. The thing that makes longer duration less viable in Sweden is that if you want refinance the mortgage before the term ends, you need to compensate the bank for the lost expected income from the interest rate - if you refinance with a lower rate (somewhat simplified).

[@satanihelvetet]

A very good video! You really caught the most important of the Swedish home market and types of living.

[@anders630]

An important fact regarding association is that renovation can be done with a majority descision. In some countries where you own an apartment renovation requires 100% owners to accept which leads to buildings deteriorating because a few owners block any extra costs. There can also be the case where they arent even able to reach some owners.

[@andersmalmgren6528]

You should mentioned that you talk about the shared areas of the building. Not the apartments :D

[@Mazoox500]

One other thing that might be pertinent regarding buying homes in Sweden is that you have to also pay “pantbrev” & “lagfart” on most houses. This is around 3,5% if no previous pantbrev is registered on the home. And this has to be paid by you. You are not allowed to add this to your finance.

[@jadeh2699]

Very interesting and surprising information. I especially appreciate the name of a website for viewing properties.

[@subwarpspeed]

About owning a flat or owning a stake in a housing association. Since 2009 there is a type where you actually own the flat called "ägarlägenhet". Before that I till it want possible to own property in the vertical space on Sweden but they got it updated and it would similar to "radhus" (seeing different translations such as townhouse, row house, terraced house). So when you actually own the flat you can do as you please with renovation and renting it out. The common parts that still needs collaboration are done in a compulsory community association (? Samfällighetsförening), like if you on the rural area have a road passing by that everyone needs to be part of. The key part is that they association doesn't own the property like a home association does. I read that only new buildings can become directly owned flats ("ägarlägenheter") or there hasn't been any dwelling the last 8 years. Like if a commercial building is converted to flats it can be this. So the existing home associations and the way it works will stay in place.

[@filipnorell3146]

mycket intressant, fler videos nu:)

[@ArchieArpeggio]

In a nut shell that is basicly same here in Finland. I have bankloan that has solid payment for every month, but there is different variations for the loaning system and when you make the deal with yor bank it depends what is the interest rates at the time what kind of loan is the best option. If the rate is very low, it is best for you to take loan for that interest for whole loan time. If the interest is high then it might be better to take loan where the interest rate changes in real time for expecting those interest rates possibly are going to get down and it changes monthly. Then there is something from the middle (i have this one) where the loan interest is checked every three month period. So if you take the first one you know exactly when you have the last payment, but in these two other options the loan live with the interest rates so if the rates gets lower, that loaning time mighst end up sooner, but if inerests goes and stays up long periods it takes more time to pay that whole mortage out. Then there is more risky loan where you shorter every month with same amount mortage plus you pay te interest that changes, so you might get into trouble if the interests goes up very much and the monthly payments goes up as well. What comes for the interest itself it is always banks own prime interest prosentage and Euribor prosentage. Banks prime is solid what it ever is when you are taking the loan and Euribor is the one that changes so even when interest rates rises the banks prime will remain the same.

[@biankakoettlitz6979]

same in Norway, but sometimes you have the same payments and I think , it's longer than 3years. It's called 'faste renter' if you want them, oh must ask the bank.

[@torbjorngunnarsson2986]

In Sweden, you can get an atmint probe with a 10-year binding period. For me, it was 4.9% when I bought the house and thought it wouldn't get any lower. But I was completely wrong, the interest rate just dropped. But now after twelve years it is soon back at that level.

[@FPfreddyyy]

If you want a house consider contacting a prefabhouse manufacturing company and having a house built for you. You won't need to put down the 15%. You will likely get a lower interest rate. It is cheaper often than buying an existing house. The whole process takes only a few months and you get a new house. I considered doing this when I lived in Gothenburg, but then I moved out to the country side instead. You won't be able to live in the centre of Stockholm though.

[@johantill6423]

Buy a home in my beloved Sweden. Most depends in what area it is. A small 2 room flat in Stockholm or a nice small farm including a barn with a workshop/garage and some acres of fields and some forrest parts. About the same price.😊 Thx for one more nice video. BUT the sound! Changes all the time. Starts loudly and then fading away. Or its just me having a bad day. Have a nice weekend and take care!

[@andersmalmgren6528]

But no sane person wants to buy a prefab house. You want a old classic house from pre 1930.

[@_Wolfsbane_]

Note that there is a major difference between buying an aparment and a house. When buying a house you have an extensive responsibility to inspect the property. ANY faults that could have been found during an inspection of the property but found after signing the contract is on you and at your expense to fix (basically, there are allowances for hidden defects - but those are really rare).

[@andersmalmgren6528]

Same for apartments, just that the faults most often cant be as severe as with a house

[@_Wolfsbane_]

@@andersmalmgren6528 it's not really the same - the obligation when buying a house is more extensive.

[@fredyyfredfreddy]

What you buy is also a share in the home association, anyway have you considered buying a plot of land and having a prefabricated house built for you instead. Provided that the land has a preliminary building permit, and has electricity and water already drawn close to it, and is suitable for building, the whole process is much faster than most people think and in Stockholm and Gothenburg it is usually also cheaper than buying an existing house, plus you get a new house.

[@matteste]

Meanwhile, the US have endless number of homes that just stand empty and unused while there are over half a million people that are homeless, all for the sake of the stock market.

[@juangalton999]

Well once we get the government out of the economy I believe things will stablize.

[@schoolingdiana9086]

@@juangalton999That’s backwards. We need to get corporate hedge funds out of the real estate market. It’s corporations driving that, not the government.

[@caughtinthevoidfloyd5821]

Lol its clear you do not have any education in economics. Attacking the stock market? Lolol ok bud

[@caughtinthevoidfloyd5821]

​@@schoolingdiana9086its illegal immigration most of all. Cost american tax payers at least 130 bil every ywar plus drive up the demand

[@fredyyfredfreddy]

Also note that the real estate agent should look out for the interest of both parties, except for when it comes to price where they represent the seller.

[@JohnKalb-d7k]

Interesting video! So what if I want to rent a city apartment long term (multiple years) in Sweden? Based on the video, most associations won't allow this. So what are the options for long term apartment renting? Thanks, John

[@dtesta]

You forgot to mention who pays for the agent. This differs a lot between countries. In Sweden, it's always the SELLER that pays all fees to the agent, so the buyer does not need to care about those things. Also, you should have explained how the bidding process works, because that is also different between countries :) Otherwise, great video :)

[@FloridamanForever]

House prices in Sweden are very inflated. The cap on property tax at rough 1000 dollar per year, heck in New Jersey you pay that per month for a regular house. basically principal free loans and most mortages have a low adjustable rate mortage.

[@MrLalanjo]

Having owned both a house and apartment in the US and here in Sweden I just want to add that the buyser (if memmory serves me right) end up paying for 2 real estate agents in the US instead of one here. Regarding locking in interest rates you can most commonly lock it in on 3 monhts, 1,3,5,8 or 10 years. Also one major difference is that if your morgage is less than 50% of the property value you do not have to pay an ammortization here in sweden, unless you wish to do so.

[@Multifobb]

It's only the seller of the property that hires the real estate agent and pay them on Sweden. So tbh... The real estate agent is always on the seller side trying to max the price for the seller. But all bidding info is open do it's not like it's a scam or anything. But as a buyer, be aware the agent is usually get higher commission is selling price is higher.

[@schoolingdiana9086]

That’s only for those who sell to first time home buyers.

[@chrisk1084]

There is one called "Good brokerage practice" and reads as follow; The broker must be a so-called impartial intermediary. This means that the broker must look after the interests of both the seller and the buyer. But there is an exception and that applies to the price of the home. As regards the price, the broker must, despite the requirement of impartiality, try to get the highest possible price for the home if the assignment comes from the seller.

[@lionfromthenorth4580]

I can think of Stockholm being the worst place in Sweden to buy a home in... I live in a small town in Skåne. Much easier to find a good place, not that expensive and a good size. Now, we are a family, 2 adults and 2 teenagers. We live in a so called "radhus". It's also easy to walk or take the bus to wherever you wanna go. I don't mind being a tourist in Stockholm, but I wouldn't consider moving there.

[@andersmalmgren6528]

1520 never forget!

[@JohnKalb-d7k]

Thank you for that concise video which helped me a ton navigating this jungle! I have two questions, maybe you know the answer? I am asking about most *typical* condominium associations because I understand associations can vary: (1) As a foreigner from another EU country, can I buy a right of residence and then live there myself for say 5 months of the year, while the apartment would be empty for the remaining 7 months of the year? In that case, I would not be a tax resident of Sweden (because I spend less than 6 months in Sweden in a calendar year). So in other words, does the association only care that I am the main resident there (and no-one else), or do they require proof that I am actually a tax resident at that address? (2) Different situation, unrelated to the above: Do I need approval from the association if I buy the right of residence, and my immediate relative (a child) lives there full time and long term, and I never live there? Thanks! John

[@SweDaneDragon]

If you rent long term, the owner can't end the contract. The renter is protected by law to stay as long as they follow the rules in the contract. This is the reason that they don't want owners to rent out long term.

[@SirIdot]

Not really. You can have the renter forego that right in the contract. The number one reason for the association not wanting their members to rent out is that it relies on its members to participate in the management of the association in some way. At least some members need to sit on the board and do that work, since almost all prohibit external members on the board in their bylaws. It also needs a portion of the members to at least do some work to keep costs down, even if it's just to help out on the "work days" a couple times a year. If apartments are rented out less people will participate in these kinds of things since renters don't have any "skin in the game".

[@robertjohansson-x8o]

one thing I'm wondering is, lets say you buy a property whit you're significant other whit a 30 year fixed interest loan. what happens if you split-up after lets say 5 years, and you need 2 sell you're property? Do you still need 2 pay the 25 years off interest 2 the bank ? Think that's the issue whit the Swedish system, nobody wants a long loan hear because you will have 2 pay The interest difference compensation.

[@proxmoxie]

As a board memeber of a housing association, if the number of people rent out their apartments long term - it can decrease the tenants engagement in the association itself. However there are something called "Likhetsprincipen" or equality principle, menaing that if they approve a person long term, they have to approve the rest applying for the same if the conditions are equal. Valid reasons (Legally or by praxis) are: - Doing military Service, - Serving a prison sentence - Trying out living with a partner - Working or studying at another city/country Some associations have approved renting out 6-12 months if the market is bad atm(meaning that its difficult to sell the apartment).

[@northbreeze0198]

Wow, the market is another place in Sweden. Are you now a home owner?

[@schoolingdiana9086]

Your brother only had to put 5% down? Is he in Portland, too? How did he do that? Anywhere in WA state it’s a minimum of 20% down.

[@E-jit]

Smart thing renting in this economy. I locked down my loan for four years and I’m dreading the upcoming re-negotiation for the following four years.

[@XanderLow]

Hi, but dont you have to pay like a ridiculous amount of closing cost in the us? Thinking about buying a property in Orlando.

[@igoodkid334]

Thank you for the info but you never said what if a foreigner , American, wants to buy, would I have the same rights? Am I allowed to buy an Apt. do I need a resident permit? to live there, details please.

[@ResonatingSweden]

Hello from the north. As a foreigner who bought a house (vila) in the North of Sweden, my process looked completely different than what you describe, especially different when we were not residents of Sweden yet and we going of the rule that we are EU citizens and have the right to buy a property anywhere in EU. Maybe I should do a video about that. 🤔

[@Max-ts1jx]

Just checked out you're channel; and as someone who plans to move to northern sweden someday (probably near umeå or sundsvall) I think a video like that would be very informative!

[@ResonatingSweden]

@@Max-ts1jx You got it! I will do it for you then 😅

[@biankakoettlitz6979]

Sounds to me like 'Borettslag' in Norway, but in Norway you own your apartment, but not the building/outer wall you live inn, therefore the mortgage (lån) of the building is decided into numbers of residences it has. But in Norway you have the other consept , too. It calls 'selfeie'. Maybe someone wants to move to Norway. Sorry, couldn't resist😄😊

[@Max-ts1jx]

I'm curious as of how long the loan terms in general are, not just the fixed rate. I've read online that it can be 50 years sometimes which just sounds unbelievable to me.

[@andersmalmgren6528]

Overtime the best loan to get is the 3 month one. Sure if you time it right a fixed rate of 2-5 years might be a win. For example if you tied your loan right before the increase that we saw last year. But for most people over lets say 30 years, a 3 month loan period is much better

[@schoolingdiana9086]

Only 30 years for the maximum

[@Henrik46]

The BRF option is NOT unique to Sweden. It exists in the whole of Scandinavia, and also in Germany, Switzerland, Austria and Quebec, Canada. Here in Norway, it's basically the only affordable housing that's remotely central. Except in Oslo, where nothing is affordable. 🙄

[@tokslut]

I have seen 10 year loans. You should talk about paying the house/flat of is not as common in Sweden, just pay bank fees like a rent is more normal here I think than in the US. I hate apartments and rather live by the forest edge in my own house and like that way more :)

[@persianeyes16]

You forgot to mention that you get punished in the USA for putting less than 20% down. They charge you a monthly PMI which adds hundreds of dollars to your mortgage

[@schoolingdiana9086]

Absolutely. If his brother is only putting 5% down, his interest rate is going to be insanely high.

[@levkriscoins9115]

Norway and Denmark have same association

[@ulfpe]

If you have an appartmen in a housing ascociation you own a share of the association, not your actual appartmen. Apartments can not be property as property IS land. If you buy a house you buy property.

[@joachimeriksson8557]

Lita inte för mycket på vad mäklaren säger när du väl köper. Om du kan kontrollera mäklarens olika påståenden så gör det!!!

[@Olofberglund]

💯 I slutändan är det säljaren som betalar mäklarens arvode.

[@bogganalseryd2324]

Yeah, trusting af

[@CarlTingström]

Swedish housemarket is so broken. I think they have regulated it way too much

[@stickygusman740]

👍👍

[@amanda700_]

No no in Finland 🇫🇮 They have like this 2

[@Joakim.Bengtsson]

Don't trust Swedish real estate agents when selling property. They mostly care about selling as fast as possible so they earn money more quickly. Sometimes it is better to not sell and put the house/apartment on the market at a later date.

[@boljdurk8790]

Wow, terrible advice. Way to throw an entire profession under the bus because you, apparently, have had a bad experience. If you dont like the price you are getting - dont sell. If the market is down and slow and you are after max profit - dont sell. Its not rocket science.

[@Eriedu]

You never really own a home in the USA because every year you have to pay property taxes (around $4,000/ year). They go up every year. In Europe that's not the case. The usa is inferior when it comes to home ownership. Home insurance in the U.S. is mandatory too and it costs $3500 year. On top of those two you must pay HOA. U.S. homes are made of cardboard too, weak materials. Europe wins hands down.

[@vertitis]

You'll lose a lot of money from renting, even having a loan on a Bostadsrätt usually makes less bills than renting and in the end of the day you'll also own the right aswell. Same thing with houses, and were you for example buying a house cash, you can end up with less moneys on bills than renting a one bedroom apartment of say 40ish square meters. Now ofc Stockholm has ridicolous prices, it's a world of its own and some people just feel like they just have to live there among the snobs. Why is really beyond me since there's so many places that are nicer and at a tenth of the price. For me, I live in a bostadsrätt, and my bills are slightly less than half of what a renter would pay for a similar size apart and I can choose how my apartment is decked out. I also have a say when it comes to what's gonna be done to the house and the yard. If I were to sell today I'd basicly lived here for free for 50 years eventho I've only lived in this apartment for 12 years. That's not counting the less bills but only the profit of selling. Ofc it requires a lot more moneys these days to get into the market than it did when I did it, and no one knows where it's going to go next. I personally think that the homes are overpriced.

[@KaisaKylakoski]

Not only in Sweden, house associations are standard in Finland. Not suprised that Swedes don't know that.

[@epicLEKLE]

I don’t think most Swedes believe it’s the only country with a housing association. However, this channel is about Sweden. He clearly says ”one of the only country’s in the world” not the only. Also this guy is American. Sounds like you’ve got a little brother complex

[@cynic7049]

Seems like Sweden, Finland, Norway and Denmark have them and probably no one else. Not a uncommon thing.

[@Olofberglund]

@@cynic7049well that’s uncommon in a global perspective. Even compared to rest of Europe we all four countries together are only a fraction of the total population of Europe.

[@tokslut]

Why do Americans feel the need to say "right now" all the time? We get it that it is at the moment when you say it. Starting stating obvious stuff gets annoying ;) That said, you did not do it as much and it was an informal video, thanks :)

[@chakradharkokkula2952]

hi Stefan. I am from India. I have been following you for the past 3 years. I would like to meet you, I am in Sweden now. Please let me know how to contact you. I have sent messages on Facebook as well.