Why does it pay off to invest in a mortgage advisor when buying a house?

Tips and useful insights about the Dutch housing market

Lennart Kaag is a freelance mortgage advisor and buying agent at Vervier and Flo Makelaars in the Netherlands. We
asked him several questions about his view on the mortgage market in these days, some recommendations and tips for individuals or companies interested in buying or selling a house or another real estate property.

Question: What are the main reasons for an individual buying a house to engage a mortgage advisor?

The real estate markets in the Netherlands are booming and even during the corona crisis the prices in the housing market have moved steadily in one direction, up. When you make the decision, as a first-time home buyer, to buy a house in the Netherlands and you find a property you really like, it is likely you are competing against other potential buyers for the same property. In most cases, you will have a short window of time from finding the property, schedule a viewing and being able to place a bid on the property. Engaging with a mortgage advisor early in the process will provide you with a good understanding on your maximum borrowing capacity, any additional fees that you can expect that are related to the transaction and provide you with an overview of expected monthly fees. Being able to convey the message to a seller that you can finance the property and are able to move fast is an important element to make sure your offer can stand out versus other offers from other potential buyers.

“You will have a short window of time from finding the property, schedule a viewing and being able to place a bid on the property.”

Q: What services do you offer?

Most people do not really want a mortgage, it is simply a tool to acquire a larger goal such as home ownership, a financial stable future, or simply lower monthly fees for housing.  The mortgage is a necessary evil, a product that can accommodate to achieve those underlying goals. The right mortgage for one client can be completely different for the next depending on the individual preferences, financial situation, and future goals.

We combine mortgage advisory with real estate brokerage. From a home buyers’ perspective our services include mortgage advisory, buyer’s consultation, and a full-scale brokerage buyer’s agent service.

Depending on the situation you might only need mortgage advisory or you would be also interested to opt for additional services. If you like to be in full control yourself and like to seek out properties, doing the viewings and negotiate on your own behalf than opting for the mortgage advisory is the suitable option. If you would like additional support during the viewing process, the buyer’s consultation provides you with insights on the underlying property what a suitable price would be and we provide a suitable negotiation tactic to increase the likelihood of winning the bid while keeping in mind what a realistic price should be. For those who do not like the hazzle of property selection and viewing we can provide full-service as a buyer’s agent.

“We combine mortgage advisory with real estate brokerage.”

Lennar Kaag photo
Lennart Kaag

Q: What are the steps that you take when you advise your clients?

Many people make the mistake of viewing properties without having a good understanding of their borrowing and financial capacity.  This can result in disappointments such as not being able to finance a winning bid, not being able to prepare a bid on time or simply not being able to convey a bid effectively to a seller. Buying a house can be a very time-consuming and stressful process. Especially in the current market. To avoid this from happening we guide our clients from A to Z to make the process as smooth as possible.

The following steps are taken from the first consultation to the final transaction date.
1) Understand a client borrowing and funding capacity
2) Viewing properties
3) Start bidding on properties
4) Winning a bid
5) Select notary, valuator and potentially other required services
5) Finalize advisory and start mortgage application
6) Schedule transfer date after mortgage approval
7) Final transaction and taking ownership of property for the clients

“To avoid it [to become a stressful and time-consuming process] we guide our clients from A to Z to make the process as smooth as possible.”

Q: Next to your mortgage advisory role, you are also a purchase advisor. Can you tell us about that?

The buyer’s consultation (purchase advisory) is there to help buyers in their decision on whether they should move ahead in preparing a bid on a selected property and if so, what would be a proper bidding amount for the property. We also present the client with recent price data to show what a fair value should be for the property based on similar transactions in the same area. The service also includes the bidding on behalf of our buyers and the negotiation process and what would be important clauses and terms and conditions to add to the bid.

Q: What are the biggest mistakes that people typically do when they look for a mortgage?

Usually, people are fixated on only getting a mortgage for the lowest monthly fees and lowest interest rate. Whilst buying a house it is also important to consider different scenarios for the future. What happens if interest rates will rise, will you still be able to pay for your mortgage? What if you decide to work less hours? Or if you decide to have children? What happens when you get sick? The mortgage application presents a perfect opportunity to take a critical look at those scenarios and what options are available to take out additional insurance where it its suitable for the clients’ situation.

“Usually, people are fixated on only getting a mortgage for the lowest monthly fees and lowest interest rate.”

Q: Do you also help entrepreneurs with mortgages related to their business?

Yes, we can provide mortgage advisory services for entrepreneurs. We provide a customized approach to each entrepreneur and the possibilities and limitations depend on many different factors.

The process is a bit more complex compared to individuals that are employed. How much you can borrow as an entrepreneur depends on many different factors. Are you looking to finance a business location or a home? Are you a freelance worker or do you own a larger business with several employees? Do you have one business or do own/ manage multiple companies? How many years are you an entrepreneur? Are your revenue streams affected by the corona crisis?

“How much you can borrow as an entrepreneur depends on many different factors.”

Q: Do you have an example of how you supported one of your clients in the past? (something raising interest with others, without mentioning the name of the client)

I was approached by an expat client in December, and she wanted to know what her options were in Amsterdam. After reviewing the requested documentation, we had a good understanding of the financial possibilities. Two weeks later she was scheduled to have her first viewing for a property that she found herself on Funda. She was really excited about the object and we decided to prepare a bid. After we made a review of the underlying property we decided on a price. We were able to win the bid despite there being a slightly higher bid on the table from another potential buyer. The seller decided to go for our bid as they were convinced, we would be able to get the financing done and transact on a relatively quick schedule. The valuation report came in with a much higher price giving my client further confidence that she made a good deal. As I had already reviewed her situation before the bidding process, we could initiate the mortgage application right after winning the bid, which resulted in a very quick assessment from the bank as most required documentations for approval were already collected. In the end, we were able to transact one month later in January resulting in a fast and smooth experience for everybody involved in the transaction.

“The seller decided to go for our bid as they were convinced, we would be able to get the financing done and transact on a relatively quick schedule.”

Q: How do you expect the house market in the Netherlands to evolve in 2021 and 2022?

Prices for real estate in the Netherlands have risen across the board in 2020. Housing prices were about 10% higher throughout the Netherlands compared to the same month last year. And especially the last two months from my own practice I can tell there is more competition per house compared to last year. A recent report by ING showed that over the last 15 years the total amount of houses that are listed for sale are at a historic low. On top of that it is estimated that 20% of current transactions are sold to investors (buy to let) rather than homeowners (buy to live).  Additionally, interest rates are at historic lows and the coronavirus outbreak seems to have the effect that people are postponing selling their properties. In the very short-term I expect this trend to continue as there are simply a lot of buyers and not enough listed properties. However, I do expect that more opportunities will come in the coming months and as the year goes by as many of the trends that resulted in the current situation seem to be reversing and government policy is being put in place that benefits first-time home buyers.

“There is more competition per house compared to last year.”

Q: What single piece of advice would you give to a person intending to buy a house and getting a mortgage now?

You cannot start early enough in your assessment of your financial capabilities because once you have found something you like you will have to make quick decisions. We are happy to be your starting point and we can always provide you with the first assessment of your situation free of charge.


For more information about mortgages in general or to discuss your personal situation, please  Lennart Kaag’s website, or contact him directly at contact@lennartkaag.nl.