The market is unpredictable. Should you overbid on a house in Utrecht in 2023? Or can you actually buy well below the asking price? A year ago the answer was that the average home went for around 12% over the asking price. But is that still necessary now? And if you're presented with a sealed-bid procedure now, is that a bluff?
Contents
- What should you bid?
- The 2023 housing market figures
- What's happening on the housing market?
- Conclusion
If you're looking for a home in Utrecht in 2023, there's a good chance you'll have to deal with overbidding. The Utrecht housing market has grown enormously in recent years and demand for homes is greater than supply. This has led to a very competitive market, in which overbidding is often the norm if you want to be able to buy a home.
Overbidding in Utrecht 2023: is it necessary?
I'll never forget arriving at a client's housewarming and the guests there asking: ‘Wow, how did you manage that? A house for the asking price’. I felt a bit uncomfortable. I wasn't fully behind the deal myself and had explained that to the buyer too. He had good reasons why it was really very attractive for him. In his case it was a smart investment, and in the negotiations we were able to get the lowest price. Still, I didn't think it was a fantastic deal. It was okay. A few months earlier I had bought a house with an overbid of approx. €125,000. Those friends even said, well, of course you're sure of getting the house if you overbid that much. However, I was prouder of that one. The home was priced too low for the market. We acted super quickly and the home was eventually valued higher too. Based on comparable sales, the home was worth more than what we had bought it for. Strange, isn't it: not proud of the one at the asking price, a good deal at far over the asking price.
The main reason overbidding has become the norm all these years is the high demand for homes and the limited supply. This has led to a situation in which prospective buyers bid against each other to get hold of a home. As a result, prices higher than the asking price are often paid. Always look at what a home is really worth. Don't know? Then get advice.
What should you bid?
Overbid or go under the asking price?
If you want to overbid on a home in Utrecht in 2023, it's important to be well prepared. First of all, it's essential to map out your financial situation properly. This means you need to know your maximum mortgage amount and what your monthly costs are. Once you know your financial options, you can make a realistic offer.
But the market value is much more important. Nice that you might be able to borrow €700,000. Maybe you can even get a valuer to value it at around that amount. But if the home is worth €650,000, you're paying too much. You can find out the market value with handy tools on the estate agent's website or via Walterliving.
We estate agents also have handy tools we can use. Still, I often see that not quite the right comparable properties have been used. Precisely because of our knowledge, we know whether the transaction prices need to be adjusted and whether the homes really are comparable. Ask an expert to look at it with you and determine the current market value. The market is moving in all directions at lightning speed. You'll want to know what the home is worth right now in its current condition, and whether you're making a realistic offer.
If you want to make an offer on a home, it's important to act quickly. Make sure all your paperwork is in order and let them know you're seriously interested. It can help to write a personal letter to the seller explaining why you're interested in the home. This can sometimes make the difference between your offer and someone else's. What matters is that your proposal includes the following elements:
- Offer
- Conditions precedent (ontbindende voorwaarden)
- Completion date
- Items to take over
The 2023 housing market figures
What are the figures? How much over the asking price are people paying on average in Utrecht in 2023? We have the first quarter behind us. Funnily enough, we see that over the past quarters the average difference between asking price and sale price is 0%. That means that on average, homes are being bought for the asking price.
In 2023 a total of 802 houses have been sold. On average, homes sold by a non-NVM estate agent went for 1.9% below the asking price. At the 5 largest NVM offices, homes sold for an average of 1.15% below the asking price. At Gusto Casa, homes sold for an average of 0.4% below the asking price.
It's important to look at the value of a home. Listing a home at a certain price is a sales strategy. So it's important not to look at the asking price and percentages, but to weigh up the features of the homes, the location and the finish.
Update in November 2023
So far 3,145 homes have been sold in 2023. The average transaction price was €425,000. On average, bids were 1.1% above the asking price. The homes sold within 25 days on average, and 42% of them were bought with a buying agent. At Gusto Casa we sold this year at an average of 3.1% above the asking price.
What's happening on the housing market?
We can see the market is changing. In January, 283 homes were sold at an average transaction price of €410,000. Followed by February, when 200 homes were sold at an average transaction price of €407,594. In March, 314 houses were sold at an average price of €437,500. Homes were on the market for less time. Every week we see the number of house hunters slowly increasing. Demand is still much greater than supply. So we don't expect prices to fall much further.
New builds aren't getting off the ground. The homes are expensive and the completion times are uncertain. Because of all of Hugo de Jonge's plans, finding a rental home is even harder. People take a big risk when buying a new-build home. The chance that their current home will lose value is too great. A gap then opens up. But people who need a home right now can't wait for an uncertain completion date either. This means there isn't a healthy flow of people moving through the market.
Update November 2023
From September onwards the market suddenly looked very different. It got busy again like the old days, with packed viewing days, sealed-bid procedures, and bids far above the asking price again. Nice, an average of 1.1% above the asking price. But generally speaking, that won't get you there now. Unfortunately. The average transaction price has risen to €433,493. The average time to sell has gone back to 22 days on average, and the average overbid was 4%. With us, the average overbid was 6.7%. Homes were bought with a buying agent slightly more often. No less than 45%.
People with a buying agent in Utrecht paid an average of 3.5% above the asking price in 2023. From September, even 7.6%. Does that mean you end up paying more with a buying agent? It could, if you have one who does little groundwork and mainly wants to close a deal quickly. But most buying agents can tell you exactly what a home will go for. Lots of super-popular houses are bought with a buying agent. These homes are also often heavily overbid. Last month we even had a good old-fashioned overbid of €127,000 again, but we also bought a home for €60,000 below the asking price. Our average for this year is an overbid of 0%, and 1% from September. So I do fear that with the big overbid our percentage will rise ;) Here too, it's important to look carefully at the value and not just at the asking price and a percentage you supposedly need to overbid.
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Conclusion
Overbidding in Utrecht in 2023 is unfortunately not yet a thing of the past. Sometimes you'll still have to overbid considerably, and sometimes you can even end up below the asking price. You can't put a percentage on it. Analyse every home carefully, bring in an expert and secure your new home. Because feeling at home is being home.
The Utrecht estate agent where you come home. Whether you're a born-and-bred Utrechter or have Utrecht on your wishlist. We are the NVM valuer, selling agent and buying agent of Utrecht. We combine expertise, a feel for styling and marketing skills with local market knowledge.
Curious about the 2024 figures? We've also written a blog about overbidding in Utrecht in 2024.
