Apartment agony

We made our first bid on an apartment last week!

It was all very exciting:  the minimum size (70 square meters, or about 760 square feet), full southern exposure for maximum sunlight, with a small space for an office, and located in our neighborhood, literally across the roof from our current sublet.  The move would have entailed taking our boxes and furniture down the elevator, across the entry, and up the elevator to the new pad.

The reason we made the bid, with confidence, rested on the fact that the seller had switched from the bidding process to “acceptpris,” in other words, stating exactly the price that she would take.  The acceptpris slightly upped the starting price, 2.995 million SEK (about $470,940), to 3.1 million SEK (about $487,820).  We speculated as to whether this meant there was a bubble — recent sales in this building for lesser apartments had gone much higher, well above 4 million SEK (about $600,000).

Our new loan, procured after our old loan was so disappointing, made paying these unseemly amounts seem entirely reasonable:  After paying down 15-25% of the apartment price, and getting our 30% tax refund for having purchased an apartment, our monthly payments would amount to somewhere around 10,000 SEK (about $1,500).  A reasonable rate, we felt.

And we thought we were the only ones to notice.  We called the week that the apartment went for sale at the acceptpris, and the broker showed it to us last Thursday evening.

Brokers here in Sweden are supposed to fairly represent both seller and buyer.  He speculated that global events (Japan’s nuclear meltdown, Libya’s war) had spooked the market here in Sweden and that the several week’s lull would be short-lived.  We talked about wine trails in California.  He gently broke the news to us that the seller had decided to see if she could get more for her place.

This lovely seeming gentleman had to put our offer to the owner, whom Matt and I secretly nicknamed Grandma (80 years old, with excellent cartoon nudes hanging on her walls next to giant knockoffs of Andy Warhol’s Marilyn Monroe series). But because she had reconsidered her decision, he said, at her request, he had scheduled another showing for that Sunday. While this was the price she said she would accept a week ago, the broker told us, oh, she must have spoken to her family members and friends, who told her she could demand a higher price.

And so, on Sunday, at the showing, another couple came to see — and bid 3.0 million SEK with the offer to move in May 1.  We had asked for July 1 to take ownership.  And so the bidding began.  Could they meet 3.1 million SEK?

The other couple brought their parents into the mix, according to the broker, who called me on Monday afternoon.  They upped their offer to 3.1 million SEK.  Could we offer anything more, or move in earlier?  So we offered 3.14, and stuck to July.  The broker said he would put that to the seller.

That evening, the broker said Grandma liked our new offer.  (I slipped from hating her to loving her again.)  But now he had to tell the other couple to see if they would bid more — he thought it unlikely.  He would call us on Tuesday.

On Tuesday afternoon, around 2 pm, he called to say that there was a “70% chance” that the other couple would not bid higher, and could we meet the next day to sign papers?

An hour later, he called to say that the competition had offered 3.15 million SEK, and stuck to their May 1 date.

At this point, Matt and I had both had sleepless nights.  On Sunday afternoon and Monday evening, which are typical days for the 30-minute apartment showings that are the norm here, we had visited several more apartments.  We saw two the same size in the center of Sodermalm — presumably the hipper, cheaper island in Stockholm’s archipelago.  These were small, dark places (one was literally below ground and you could hear the constant rushing sound of water through exposed pipes at the center of the apartment, flushed from the upstairs neighbors — we called it the Dungeon).  We climbed the stairs of a fifth-floor walkup with northfacing windows and a WC that Matt couldn’t fit into.  We saw a comparable place in nearby Ostermalm that would have cost as much as Grandma’s, but had a lower avgift (monthly management fee) that included broadband internet and a gym, which would have meant lower monthly payments for us — only no sunshine.

We had run the numbers again and again.  Was Grandma’s tiny apartment worth this much money?  For me, the sunshine was the key — five full windows facing south — and in a neighborhood we know and like for its access to the Djurgarden, downtown Stockholm, and more.

But this was ridiculous.  I felt jerked around.  I no longer felt like playing the game.  I didn’t want to hear from this broker ever again.  After speaking to Matt, who agreed that we did not want to bid higher, I called the broker late afternoon on Tuesday and said we were not willing to up the ante in this weird poker game.

His response?  It wasn’t over yet — the other couple could still renege.  The seller could decide to take our bid anyway.  My response?  Incredulity.

In the meantime, we bid on the Ostermalm joint.  As I write this, we have been outbid:  the latest offer is now at 3.32 million SEK ($524,000), and most likely will go higher today.  (The Dungeon is at about the same price.)

Next post: Our options.

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4 Responses to Apartment agony

  1. Jordi says:

    Holy shit. What a nightmare. This is a socialist country?!?!?!? $450,000 for 70 square meters? Land owners must be rich as hell. But one you don’t like, rent it for a few years, live somewhere worse, pocket the profit and go for 80 meters-squared.

    Hang in there.

  2. Kimmi says:

    Or – keep renting until you find something you DO like. Why do you feel as if you have to buy now? Have you researched alternatives ways to obtain property? (In DC you can sometimes score houses at auction for just the back taxes owed…JLo did this a few months ago for a lovely home in Columbia Heights.) I have no idea what these alternative ways might be in Stockholm, but picking up a $450,000 loan for 70 or 80 square meters sounds like a bad deal.

    • zurichsee says:

      Yes, it does sound like a bad deal — but it seems to be the norm here! We keep wondering if there is a bubble… my next post will detail some of our other options.

  3. Pingback: Our apartment-hunting options | Fourteen Islands

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