When buying a home, you’ll often encounter the terms “costs buyer” (k.k.) and “freehold” (v.o.n.). You’ll regularly see these abbreviations in advertisements, and you may have heard them mentioned while talking about houses. But what exactly do they mean? And what’s the difference? We’ll explain it clearly below.
Cost buyer (k.k.)
The abbreviation “k.k.” stands for “costs buyer.” This means that on top of the purchase price of the home, there are several additional costs that are the buyer’s responsibility. These are costs necessary for the legal and financial transfer of the home.
What are included in the costs buyer?
Although the exact costs can vary, the costs buyer usually include:
- Notary fees: For drawing up and executing the deed of transfer.
- Cadastral fees: For registering the home with the Land Registry.
- Transfer tax: This is a percentage of the purchase price (usually 4% for an existing home).
- Valuation costs: Often required by the bank for obtaining a mortgage.
- Mortgage deed: Notary fees for the mortgage deed.
- Mortgage closing fee: Any costs you pay to the bank for arranging a mortgage.
- Insurance: Such as buildings insurance, which is often mandatory with a mortgage.
- Other costs: Consider ground rent (if applicable) or a contribution to a guarantee fund, such as Fondo di Garantia.
Important to know: buyer’s costs do not mean that you, as the buyer, have to pay the commission of the seller’s real estate agent. The selling agent is paid by the seller, unless you engage a buyer’s agent yourself. In the latter case, you will, of course, pay the fees of your own buyer’s agent.
Because these costs are in addition to the purchase price, it is important to consider them in your financial planning and mortgage application.
Freehold (v.o.n.)
The abbreviation v.o.n. stands for freehold. This means that some of the costs normally borne by the buyer are now paid by the seller.
What does the seller pay with a freehold property?
With a freehold property, the seller usually covers the following costs:
- Transfer tax: This is often the largest expense you save.
- Notary fees: In many cases, the seller pays the costs for drawing up the deed of transfer.
What do you still pay yourself with a freehold property?
Although some of the costs are covered, you, as the buyer, remain responsible for the following costs:
- Valuation costs.
- Costs for the mortgage deed (notary fees).
- Mortgage closing fees.
- Insurance and other additional costs.
With a property with buyer’s costs, the additional costs are added to the purchase price. With a freehold property, the costs for transfer tax and part of the notary fees are included in the purchase price. This difference can amount to thousands of guilders.
Tip: Newly built homes often use the “freehold” option, while existing homes usually have buyer’s costs. Always check carefully what costs you can expect and factor them into your financial planning.
With this knowledge, you’ll be better prepared to buy a home and can accurately assess the financial consequences. Have any questions? Contact Joubert Realty!