Property related FAQs

How is Bustad Eiendom AS going to operate? Are they going to have any employees?

Yes, Bustad will be an operating company with its own employees. These will be responsible for case management and daily operations and have the final decision-making authority.

What running costs is Bustad expecting to cover related to the transaction?

The running cost is relatively low once the initial transaction (buying the property) is completed. Given that Bustad reaches a certain size, the running cost will be more than covered by fees from homeowners.

What mechanisms make people want to buy back the housing share from Bustad so that it is not just a fictitious value that never gets realized?

Even though Bustad offers a great deal for homeowners, it is crucial to create a balance so that a certain percentage of homeowners buy back from Bustad. Here are some examples of when that might occur.

The homeowner has done significant upgrades on their house and believes they will sell the house for a higher price than Bustad estimates as its value.
Homeowners have improved their finances and see their house as a safe place to put their savings (thus buying back)
Some homeowners might buy a pre-tokenized house and do not want to co-own with Bustad.
There will also be fees if the homeowners need Bustad to do any administration (signing documents etc).
If needed, it is even possible for the Eigar token to choose to reduce the buyback price for homes owned over a certain amount of years, thus making it even more attractive to buy back the share.
If the homeowner dies, leaving an estate that needs to be settled, Bustad can demand that the property is sold on the open market if the heirs do not wish to repurchase the fraction owned by Bustad.

How much potential upside will be lost in transaction fees, government fees, and other third-party costs?

The initial purchase brings the highest transaction cost. There are government fees (document fees, registration fees etc.) and other third-party costs. These are baked into the price offered by Bustad to the homeowner. Simply put, the cost is unlikely to be less than 5% of the transaction value. Bustad pays these fees, but in reality, the cost is covered by the homeowner, who parts with a slightly larger percentage of their property.

How is the value of the property determined?

Bustad uses the same tools as real estate agents to estimate the value. If it is difficult to estimate the correct price, Bustad may ask you to provide an e-tariff by an independent property appraiser and possibly a condition report.

Do I have to pay rent for the sold part to Bustad?

No, you do not pay rent to Bustad, but you are responsible for all ongoing costs and maintenance of the accommodation.

What will this be like for the mortgage bank?

The bank still has a 100% collateral on the house and gets a more secure mortgage customer. You have a lower debt ratio and better finances as a result of lower borrowing costs.

Does Bustad only pay off debt?

Yes, Bustad only pays with debt you have in the bank. It can be secured debt such as mortgages and car loans, or unsecured loans consumer loans and credit cards.

How much does it cost to buy back the fraction from Bustad?

The price for buybacks is estimated open-market price when Bustad bought the fraction, adjusted for any upturn in the real estate market. Bustad uses a recognized price index to estimate property price increases in your region.

What are the costs of using Bustad?

Bustad offers homeowners a slightly reduced price as Bustad only buys a fraction of the property, does not charge rent, the transaction is not on the open market, and the homeowner can repurchase the fraction at any time. Technically, this is done with Bustad asking for a slightly larger share of ownership. For example, if you use Bustad to reduce NOK 500k from your debt, Bustad might ask for NOK 550k ownership in your home based on estimated open-market value. This is your starting point for repurchasing the share as it will cover public fees, other costs, as well as a buffer for Bustad Coin. This is factored into the house price, i.e. You pay nothing in cash. All costs are clearly stated in the offer.

What if I redecorate?

You are free to renovate/upgrade your home at your own expense. The buy-back price from Bustad will not be affected by this.

Does Bustad cover ongoing costs on the property?

No, you are responsible for ongoing costs, maintenance and insurance.

Can I sell my home?

Yes, you can sell your home at any time. You have three options:

You can first repurchase the fraction from Bustad, then sell 100% of the property yourself.
You can sell your share in the open market, and the new owner must enter into the agreement with Bustad. Bustad will charge a percentage fee of the transaction value.
You can sell 100 % in the open market together with Bustad, but Bustad will, as a minimum, be guaranteed the original open-market price adjusted for any price increase in the region.