Bidding without a financing clause in the Netherlands

More and more Dutch homebuyers are choosing to bid without a financing clause to make their offers stand out. But this move carries real financial risks. In this article, we walk you through what a financing clause means, why sellers care about it, and how you can protect yourself if you decide to leave it out.

This article is written by Bart, our mortgage advisor at OHAO. In this article, we briefly explain what a financing clause is, what sellers usually prefer, the risks for buyers, and your options to stay protected.

What is a financing clause?

A financing clause (voorbehoud van financiering) is a condition you can include in the purchase agreement when buying a home in the Netherlands. It gives you a set period — usually 3 to 6 weeks — to arrange your mortgage.

If your mortgage application is rejected within that period, the clause allows you to cancel the purchase without paying a penalty.

In the Netherlands, there is no such thing as a mortgage pre-approval. The financial clause exists to bridge the gap between signing the purchase agreement and receiving your mortgage approval.

To invoke the clause, you typically need to provide at least one — sometimes two — official rejection letters from your mortgage lender. You must also submit this before the agreed deadline. If you miss the deadline or cannot provide the required proof, the protection no longer applies. In this case, you need to pay a 10% deposit.

Why do sellers prefer offers without a financing clause?

When a seller receives multiple offers on their property, two things matter most: the price and the conditions attached to the bid.

• An offer with a financing clause introduces uncertainty. The seller has to wait weeks to find out whether the buyer's mortgage is approved. If the mortgage falls through, the seller has to start the entire process again — re-listing, new viewings, new negotiations.

• An offer without a financing clause removes that uncertainty. This is why, in a competitive housing market, sellers often prefer a slightly lower offer without conditions over a higher offer with a financing clause. From the seller's perspective, lower risk commonly outweighs higher money.

Dutch real estate agents often advise sellers to prioritise unconditional offers. In cities such as Amsterdam, Rotterdam, and Utrecht — where demand far exceeds supply — it has become increasingly common for winning bids to have no financing clause.

What are the main risks of buying without a financial clause?

There are a few risks if you are not prepared and are thinking of buying a property without a financial clause.

If you decide to bid without a financing clause and your mortgage is not approved, you are still legally required to go through with the purchase. If you cannot pay for the home without a mortgage, the seller can claim a contractual penalty. This penalty is usually quite large and could put your savings or financial security at risk.

The penalty is usually 10% of the purchase price. So, if you buy a home for €400,000, you could owe €40,000 if your mortgage falls through. For a €500,000 home, the penalty would be €50,000. You would need to pay this out of your own savings, and you cannot get it back through a mortgage.

Once you sign the purchase agreement, you have a legal 3-day cooling-off period to change your mind for any reason. After those 3 days, the agreement is binding. Without a financing clause, you lose your only legal way out if your mortgage is denied, and you could face the full penalty.

This risk is even more important for expats. Lenders may have additional requirements, such as residency, how your income is structured, or the 30% ruling. Even if your finances look good, these factors can still lead to unexpected mortgage rejections. For this reason, it is highly recommended to first check your finances with your mortgage advisor to avoid unexpected surprises.

Table: the 10% penalty you face if your mortgage is rejected after bidding without a financing clause.

When does it make sense to bid without a financing clause?

It is important to understand the risks, but when does it make sense to omit the financing clause? Bidding without a financing clause is not always reckless. In some situations, it can be a reasonable strategy — but only with proper preparation.

Your mortgage advisor is confident about approval

If your mortgage advisor has thoroughly reviewed your income, debts, and borrowing capacity and is confident that your application will be approved, the risk of rejection is significantly lower. This is especially true when your required mortgage is well below the maximum amount you could borrow.

You have significant savings as a backup

If you have enough savings to cover the 10% penalty in the worst case, bidding without the clause is less risky. Of course, no one wants to lose that money, but it means you could handle the loss without serious financial trouble.

You use bid insurance

With bid insurance, you can leave out the financing clause and still be fully protected. If your mortgage is rejected, the insurance covers the 10% penalty, so you do not have to pay it yourself. The certificate is usually ready within one business day and is valid for 40 days. You only pay for the insurance if the deal goes through at the notary's.

This option is especially useful if you want to make a strong, unconditional offer without risking your own money.

How to protect yourself when bidding without a financing clause

Here are some ways you can reduce or even remove the risk:

1. Get a thorough financial assessment first

Before you start bidding, ask your mortgage advisor to review your full financial situation and confirm that you meet all the mortgage application requirements. This means looking at your income, work contract, debts, BKR registration, and how much you can borrow. The more prepared you are, the less likely you are to face rejection.

2. Get bid insurance

With bid insurance, you can make an offer without a financing clause, and the 10% penalty is covered if your mortgage is not approved. This is often the wisest choice if you want to make a strong offer without risking your own money.

3. Negotiate a shorter financing deadline

If you do not feel comfortable removing the clause completely, you can try to agree on a shorter deadline, such as 2 or 3 weeks instead of the usual 6. This gives the seller more certainty while still providing some protection for you.

4. Work with a mortgage advisor who can move fast

Working with an independent mortgage advisor who knows many lenders can help speed up your mortgage approval. Some advisors can get approvals in just a few business days, so you wait less between signing and getting your mortgage.

How we work at OHAO?

At OHAO, we help you prepare before you start bidding — so you can act quickly and confidently when you find the right home.

The first step is always a thorough financial check. Our mortgage advisor reviews your income, employment contract, savings, existing debts, and any special circumstances, such as the 30% ruling or foreign income. Based on this, we calculate your maximum mortgage and borrowing capacity using the same criteria banks use.

Once the financial check is complete, we can issue a letter confirming your financial situation and the maximum mortgage amount for which you qualify.

You can include this letter with your bid to show the seller that your finances have been professionally reviewed. This already gives your offer more weight than that of buyers who bid without any financial documentation.

If you want to go a step further, you can opt for bid insurance. This is the bidding insurance, which lets you bid without a financing clause while remaining fully protected against the 10% penalty if your mortgage is rejected.

Not every buyer needs bid insurance — but every buyer benefits from knowing their financial position before making an offer. Whether you choose to bid with a financing clause, use a letter of confirmation, or go for full bid insurance, being prepared is what gives you an advantage in the Dutch housing market.

Frequently asked questions by expats

Can I still withdraw during the 3-day cooling-off period?

Yes. Dutch law gives every buyer a 3-day cooling-off period to withdraw from the purchase agreement for any reason. After that, the agreement is binding, and the financing clause — if included — is the only remaining exit route.

Do I need a real estate agent to bid without a financing clause?

No, it is not legally required. However, working with a buying agent can help you assess the property, negotiate terms, and make your offer stand out.

How does bid insurance work?

Your mortgage advisor reviews your finances and the property. If everything checks out, a certificate is issued within one business day. You bid without a financing clause, and if the mortgage is rejected, the 10% penalty is covered. You only pay the certificate fee when the deal closes at the notary.