Many of the challenges faced when buying property overseas are surmountable, but some people lose perspective and common-sense, when faced with buying an apartment or house overseas.
Thinking it through
Generally people come at such a big decision, as buying property abroad, still in holiday mode and do not always think things through clearly. Some people for example may have set their heart on an idyllic, rural, peaceful setting, but then when they decide they want some income from the property and decide to let it out, their choice of remote location might not be the holiday-renters dream and it might end up difficult to let. So it is best to try and think things through up front.
Is financing in place?
Setting a budget or ensuring finances are in place at an early stage, can often be a stumbling block. It often takes longer to secure an overseas mortgage than in the UK and the process differs from country to country. So it is a good idea to make sure the broker or bank requirements are known up front and even to pursue several mortgage applications at the same time, this is possibly easier to do through a broker. Otherwise it could mean no finance is in place, to follow through on the purchase and this may put the deposit in jeopardy.
Contracts and Appropriate legal advice
Often people don’t read contracts carefully or get put off if they are in a different language. It is critical to know that a buyer is getting what they think they are buying, with all the correct title.
The best way to do this is to get an independent lawyer, not necessarily one recommended by the developer, who will put buyer interests first and who can speak the local language. They can ensure absolute evidence of clear title (ownership) before a buyer parts with money, who can review contracts and include penalty clauses should the developer not meet progress deadlines.
Check out the developer
This has been a tricky one for off-plan buyers. It’s difficult to know that a new developer is all they claim to be, that the property is theirs to sell, or even that they’ll finish the property to the standards expected.
This has been an issue in Spain for lots of buyers of off-plan property. They have parted with deposits only to find that a developer has folded, as a result of the Global economic crisis, before completing on the property. It is a legal requirement, as part of the buying process in Spain, to have an insurance policy or a bank guarantee, for a deposit on an off-plan property. This is designed to protect the off-plan buyer and the deposits paid. Read more on Spanish property deposits.
Correct Title Deeds?
It is important to ensure a property is being bought with the correct Title (proof of Ownership) and being registered officially. There are cases in Cyprus, where buyers have found it can take a long while to get their ownership registered properly and this can leave buyers vulnerable.
There are some steps that can be taken to reduce the risk of Title Deeds taking a while to be registered in the buyer’s name. For example, buyers should ensure their legal advisor conducts a full search at the Land Registry Office to make sure the Title is clean and that no existing mortgages exist on the property or land. Read more on Cyprus property title deeds. In some European countries it is the property not the individual that can carry debt.
It is not possible to completely eliminate risk, but if research has been thorough and use has been made of the tools available to manage risk, then informed decisions can be made, and overseas property can deliver far more enjoyment.
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Property Venture® is an award-winning, UK-based agency for overseas property who helps people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.
The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property
On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say
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