10 Ways Buying a Home in Sweden Is Totally Different Than in The U.S.

In 2012, I was 28, single, self-employed, and blessed by the once-in-a-lifetime combination of a post-recession housing market that hadn’t yet rebounded, historically low-interest rates, an almost perfect credit score, and an inheritance from my grandparents that was just the right size for a down payment at the time. I found a cute, 1920s, 1,200 square-foot, two-bedroom bungalow in Oakland, California, with great bones and a Meyer Lemon tree in the backyard that just needed painting (the walls included not two, but three shades of metallic turquoise when I bought it). I planned to stay there for at least 10 years.

Because the universe laughs at plans, a year and a half later I met a cute Swedish guy who was in the U.S. on a one-year study sabbatical from work. Our “perfect because neither of us wants anything serious” relationship quickly turned into me applying for a Swedish visa and getting the cute bungalow ready to put on the market. Three years after purchasing my first home, I was buying my first Swedish apartment—a 710-square-foot one-bedroom apartment in Stockholm. And now, three years after buying that, I find myself married, solidly in the DINK demographic, and am on the market again for something bigger.

So, how is buying in Sweden different than the U.S.? In some ways not at all, and in other ways, so different. The big caveat here is obvious: My U.S. home purchasing experience is entirely based in the San Francisco Bay Area, a very special and very expensive real estate market. And my Swedish experience is entirely based in central Stockholm (specifically on Södermalm), also a very special, very expensive real estate market. I often joke I’m the only immigrant in Sweden who looked around Stockholm and thought, huh, prices aren’t too bad here! But compared to the Bay Area—they’re relatively affordable. At the moment, the average price in central Stockholm is around 86,000 SEK per square meter, or 883 USD per square foot. To compare, the average price in San Francisco is around 107,100 SEK per square meter, or 1,100 USD per square foot!

In Stockholm and its surrounding area, apartments and houses are smaller. For apartments think more New York-sized than the huge flats in Chicago or California. Unlike New York, Swedish apartments are very well-planned to maximize space. Our current place in Stockholm is considered to be very large for a one-bedroom apartment, but it’s one of the smallest places I’ve ever lived in. Besides the size-differences, here are the biggest differences between buying a home in Sweden versus the U.S:

In the U.S., one of the first things people do when starting to house hunt is find a real estate agent whose job is to help you find the right place to buy, prepare your bid, and negotiate on your behalf during the legal transaction. But in Sweden, there are no buyer’s brokers. You apartment/house hunt on your own and place bids directly with the seller’s broker. The seller’s broker then represents both parties in the legal part of the transaction. My own current (seller’s) broker, Youssef Bakali of Innerstadsspecialisten, explained to me that legally, the agent is required to ensure the deal is equally beneficial to both parties. The only thing that swings in the seller’s favor is that the agent is obligated to get the best price for them. Since the vast majority of apartments are sold in an incredibly competitive open bidding process (more coming on this), this is achieved pretty naturally.

Licensing requires a three-year university education followed by a 10-week trainee program, upon the completion of which you can apply to the government-run board for your license and then get a job.

To help with the house hunting part of things, there is one large central online listing service: Hemnet (literal translation: home net). It’s joint-owned by several of the biggest broker firms and advertises around 98 percent of real estate listings in Sweden. It’s really the only game in… the country. Real estate agencies have listings on their own sites, and there is a Swedish version of Craigslist (called Blocket) but if you’re not selling your home off-market, it’s going to go on Hemnet. There is both a web and app version, and it allows you to set up very detailed filtering as well as multiple levels of alerts and lists—very similar to Zillow. Like my U.S. counterparts, I am admittedly somewhat of a Hemnet addict. I look at it when I’m actively looking for an apartment—as I am now—but also when I am not.

You make your bids in real time, mostly via text. At the open house, you sign up on a list with your phone number. The next day, the agent will start calling around asking for bids. When the first person bids, everyone on the list gets a text saying the amount of the bid from “Bidder 1.” Other bidders can then text or call the agent to put in a small incremental bid—usually bids are anywhere from 10,000 SEK (about 1,100 USD) to 50,000 SEK (5,000 USD), although at any point in the game, bids can jump up 100,000 SEK.

It’s not a group text—you’re texting directly to the broker and the broker lets everyone know when the going bid has been raised. This continues for the next two to five days until there’s only one bidder left standing. The winning bid will generally be 5 to 20 percent over the list price. When we last bought an apartment, accepted bids were usually 20 percent over the asking price. Now, in a slower market, listing prices are closer to accepted bids.

The process is very nerve-wracking, as you have no idea how high other people are willing to go. However, unlike in the U.S. where you just throw out a single offer and cross your finger that it’s the highest (even if it’s 100,000 USD higher than the next five people), in Sweden, you’re more sure you’re paying market value since there’s transparency in the bidding process. Overall I am way more fond of the Swedish bidding system because of this, but extremely competitive people who have a hard time stopping might not do as well with it.

Usually, the contract is signed just one to 24 hours after bidding ends. It’s done with all parties in person at the broker’s office, and takes an hour or two. Though time to contract is short, it takes a long time to gain possession of the house or apartment—the standard is about three months, give or take, in which you’re mostly waiting for everyone to vacate their premises. When the possession day comes, you again meet in the broker’s office, sign the final contract, wait for the money to wire between the banks, and get the keys! We moved into our current apartment the same day we took possession.

Apartments only very rarely have formal inspections (they’re more common on houses) and the buyer has very few reasons they can break the contract after signing. A seller will provide a very detailed written description and will disclose anything about the property the buyer should know, but the open house usually suffices as a visual inspection from the buyer. If something turns out to be different than disclosed (a so called “hidden fault;” i.e. not visible to the naked eye) within a reasonable amount of time, both the buyer and seller will work with the broker to resolve the issue, mediation style. It’s often considered easier legally to take possession of the home and then sell than try to back out after signing a contract.

At least for the last few years, you need to be ready to pounce when buying a home. Typical timeline: An ad goes up on Hemnet at the end of the week, the open house happens the next Sunday and Monday evening, bids start Tuesday, and contracts are generally signed by Friday, if not Wednesday afternoon. That’s two weeks max! Usually, you have to decide to buy within 48 hours after spending less than 30 minutes in an apartment.

The classic American 30-year fixed mortgage is unheard of here. Almost everyone has floating rates or fixes their rate for three to five years at a time, at most. A standard down payment has long been 10 percent. However, unlike in the U.S., most people in Stockholm don’t have the goal of paying off their mortgage when buying an apartment—it’s just not a dream that’s part of the culture like the way it is in the U.S. That said, starting in 2016, a new law was passed, forcing Swedes to actually make headway in paying off their mortgages. You’re now required to amortize (or pay off) one percent of your loan each year if you finance more than 50 percent of the property value. If you finance more than 70 percent, you must pay two percent of the loan each year. If the mortgage value is more than 4.5 times your yearly salary, you must pay three percent of the value each year.

Swedish apartment ownership (bostadsrätt) is more similar to the American co-op structure than condo structure—you don’t actually own your apartment, rather you own a share of the building, plus the right to live in your unit. You also pay HOA/co-op fees (known as “BRF avgift”). For a two-bedroom apartment in Central Stockholm, you’d pay between 200 and 500 USD per month. The fees cover things like water, garbage, cable, and heat, in addition to building maintenance.

Like in the U.S., the bank pre-approves you for a certain amount before you buy. But once you have an accepted offer on an apartment, the bank quickly and re-approves your loan (usually over the phone or internet) for that particular purchase before you sign the contract—they just want to make sure you’re not vastly overpaying the market rate for your home or buying more home than you can afford.

I think the home buying process in Sweden aligns with what I’ve learned about Swedish culture in the last four years: It’s more restrained and focused on fairness and manners, and overall less litigious. Parties aren’t pitted against each other and there is more leeway for potential faults from everyone. If there is one thing about Swedes you can generalize about, it’s that they don’t like to make a fuss and are good at following the rules—I blame (or credit) the structure and group experiences that universal daycare instills in children.

All this being said, the U.S. felt safer to me as a first time buyer because I had the support of my own agent who I was able to choose and who was paid to protect my interests. Especially as American real estate contracts are so damn long and so incredibly complicated. As an American—who is also the daughter of a lawyer—I have always been trained to go out of my way to protect my own interests. It was difficult to fully grasp—and be okay with—the assumption that everyone’s interests are protected.

In the end, there is of course one major common denominator among buying a home in the U.S., Sweden, or really anywhere else in the world: It’s likely the single largest financial, and most emotionally-charged investment most people ever make.