Bidding rounds when buying a home in Denmark: rules, bids and conditions

The two situations are often called the same thing. But the rules, and the point at which your bid can become binding, are not necessarily the same.

So the most important thing is not to guess what the other buyers will offer. It is to know which process you are taking part in, what your own ceiling is, and which terms are written into your bid.

In brief

• An ordinary negotiation and a formal bidding round are two different processes.
• In a formal bidding round, all participants submit bids before a fixed deadline and on a uniform basis.^[1]
• The estate agent (ejendomsmægler) must pass on every purchase offer to the seller immediately.^[2]
• The estate agent may not tell interested buyers how much others have bid.^[3]
• The seller can choose a bid other than the highest one, or reject all bids.
• In a formal bidding round, the bid as a rule becomes binding on the bidder when the bidding deadline expires.^[3]
• An adviser condition (rådgiverforbehold), a bank condition (bankforbehold) and the statutory right of withdrawal (fortrydelsesret) are different safety nets.
• Your maximum bid should be based on your overall purchase budget and the specific costs of the home, not on an attempt to match the other bids.

Is it always a bidding round?

No.

The term bidding round is also used loosely for a situation where several people show interest and the estate agent asks for their best offer. That does not automatically make the process a formal bidding round under the Executive Order on Bidding Rounds (Budbekendtgørelsen).

Ordinary negotiation

In an ordinary negotiation, buyer and seller can exchange offers, counter-offers and questions about price, handover and other terms.

An early expression of interest can be non-binding. A specific purchase offer or a signed purchase agreement (købsaftale) can have a different legal effect. So read the wording and make sure you know what you are actually being asked to submit.^[4]

Formal bidding round

A formal bidding round follows special rules. The participants get a shared basis and a fixed deadline for submitting bids. Apart from price and the preferred handover day (overtagelsesdag), among other things, the terms must be the same for everyone.^[1]

So ask the estate agent directly:

• Is this a formal bidding round under the Executive Order on Bidding Rounds?
• When does the deadline expire?
• Which documents and terms apply?
• How should the bid be submitted?
• Which details may be filled in or changed?

How a formal bidding round works

The process can look like this:

1. The seller decides to run a bidding round.
2. The interested buyers receive the material and the conditions.
3. The buyers submit their bids before the same deadline.
4. The bids are kept confidential from the other buyers.
5. The seller reviews the bids after the deadline has expired.
6. The seller chooses a bid, continues negotiating or rejects them all.

The process must be transparent and clear, so the participants submit bids on a comparable basis.^[5]

What may the estate agent disclose?

The estate agent represents the seller. The agent must inform the seller immediately of every purchase offer the agent receives.^[2]

On the other hand, the agent may not tell you the size of the other buyers' bids. That also applies if you ask how much you need to add to win.^[3]

You are welcome to ask about the process, the documents and the seller's wishes. But do not expect to be told anything about the competing bids.

Does the seller have to choose the highest bid?

No.

The seller decides who the home is sold to and can also choose not to accept any of the bids.^[4]

Price can matter, but the seller can also look at:

• Preferred handover day
• Whether the bid contains conditions
• Whether the financing is in place
• Which fixtures and fittings are included
• Other specific terms

That does not mean you should remove safety nets to make your bid more attractive. A condition can matter a great deal if the bank or adviser later finds a problem.

When is your bid binding?

It depends on the form and the document.

In a formal bidding round, the starting point is that the bid becomes binding on the bidder when the bidding deadline has expired.^[3]

In an ordinary agreement process, you need to distinguish between:

• A non-binding expression of interest
• A specific purchase offer
• A purchase agreement signed only by the buyer
• A purchase agreement signed by both parties

Boligejer.dk describes the purchase agreement as the parties' contract. Once the seller has signed, the seller cannot simply withdraw, while the buyer may have access to the statutory right of withdrawal.^[6]

Because small wording differences can change the meaning, you should not rely on the word bid alone to tell whether you are bound.

Conditions and the right of withdrawal

Three concepts are often mixed up.

Adviser condition

An adviser condition gives the buyer's adviser the chance to review and approve the purchase within the deadline and on the terms set out in the purchase agreement.

Bank condition

A bank condition makes the purchase dependent on the bank approving the financing. The wording and the deadline must be clearly stated.

Read more in the guide on lawyer and bank conditions.

Statutory right of withdrawal

When buying real property as a residence, the buyer normally has six working days to withdraw in return for paying 1 per cent of the purchase price. This is a different safety net from the adviser and bank conditions.^[6]

So a condition should not be treated as a minor detail in the bid. It should be judged by the uncertainty it is meant to handle.

Your bid is not the same as your purchase budget

Your purchase budget is the overall financial ceiling for the home. The bid is the price and the terms you choose to offer on a specific home.

The budget must also leave room for:

• Down payment (udbetaling)
• Land registration (tinglysning) and loan costs
• Adviser fees and insurance
• Moving and renovation
• The home's running costs
• The buffer you want to keep

A bidding round does not change those figures. If you raise your bid, you also change your financing need, your down payment and your monthly finances.

Read the guide on the purchase budget and use the specific home as your starting point.

Handover day and other terms

A bid is not just an amount.

The preferred handover day can matter to the seller. So can agreements on fixtures and fittings, the right of disposal (dispositionsret) and specific works.

Write the terms clearly. A short message such as “I bid 4 million” does not necessarily tell the seller:

• When you want to take over
• Which conditions apply
• Whether the bid has an expiry deadline
• Whether fixtures and fittings are included
• Whether the bid depends on approval of documents

The more specific the document, the easier it is to understand what is being accepted.

Example: two bids with different terms

The seller receives two bids:

The seller can choose A, B or neither. The table does not tell you which bid the seller prefers.

Nor is it the buyers' task to make their bid as unconditional as possible. The task is to understand the consequences of the price and terms before the bid is submitted.

Checklist before you submit a bid

• Do I know whether the process is a formal bidding round?
• Have I received the material the bidding is based on?
• Do I know the deadline and how to submit?
• Have I compared the price with completed sale prices per m² in the municipality (in Danish)?
• Have I calculated my overall purchase budget?
• Have I allowed for the down payment and purchase costs?
• Is the preferred handover day written in?
• Are the adviser and bank conditions clearly worded?
• Do I know when the bid becomes binding?
• Have I read the documents I can realistically get through?
• Can my finances still work if the bid is accepted?

Common misunderstandings

The seller has to choose the highest bid

No. The seller can choose another bid or reject them all.

The estate agent can tell you what the others have bid

No. The size of the other bids may not be disclosed to the interested buyers.^[3]

All bids are the same in legal terms

No. An expression of interest, a specific offer, a bid in a formal bidding round and a signed purchase agreement are not necessarily the same thing.

A bid without conditions is always best

No. It can increase your risk considerably. Conditions should be judged in light of your financing and the specific purchase.

An odd amount gives a proven advantage

The seller chooses based on the overall deal, not on whether the amount is round or odd.

Summary

In a bidding round, your own ceiling decides your bid, not a guess at what the others bid.

First you need to know which process you are taking part in. Then you need to know your own budget, understand the terms and be clear about when the bid can bind you.

The seller can choose something other than the highest bid. The estate agent must pass the offers on to the seller, but may not tell you the size of the other bids.

See your overall financial ceiling in the Purchase Budget calculator.

BoligKlar gives you a second pair of eyes and an overview. The specific legal terms must be assessed based on the bidding material and the purchase agreement.

Frequently asked questions