Top tips for buying abroad
The overseas property market is complicated and competitive, so prospective buyers are being urged to undertake thorough research before committing to a sale abroad.
The idea of buying abroad is very tempting but the process is not straightforward, and it differs from country to country.
Overseas property expert Simon Conn said he has seen an increase in the number of buyers not carrying out proper checks before signing on the dotted line.
As a result he has put together a list of the top issues to look out for when purchasing a property overseas, but he added: “Do not be put off buying overseas – it should be no different to buying at home. Just take the relevant precautions to ensure that you are minimising the risks.”
10 tips for overseas purchasers
1. Ask questions about where a property has been built. For example, if it has been built on an area that should have been set aside for green belt or agricultural land, then the chances are there is a risk. Make sure you take advice from an independent, English speaking lawyer – preferably not from the same area as the property.
2. In some cases there can be problems with properties that have been constructed with the wrong permits, granted as a result of corruption, or with no permits at all. Take advice from an independent lawyer to save you the heartache of seeing your newly purchased dream home demolished.
3. Research the background of the property’s location as you may be surprised to learn about the chances of earthquakes or volcanic activity, or it may be in a poor neighbourhood, loud nightlife, or have commercial units nearby with associated activity.
4. Consider planning permission and which licences the property needs. Not having the correct licences could have an impact on what utilities you can obtain.
5. Poor construction is a common problem. Always obtain an independent valuation, ideally from a professional surveyor expert in that country, even if it is a new property, as this will highlight any problems.
6. Beware that new properties can sometimes be built in poor soil and with insufficient foundations, substandard building materials, or in dubious locations such as flood plains.
7. One of the most important warnings when purchasing abroad is when it comes to contracts. It is common to only receive one contract in the local language, in which case, you must have a professional translation completed. If you are given two copies of a contract which include the original and a supposed translation, get the translation checked by a professional.
8. If you are buying a property to rent out consider the cost of maintaining the property. Decide if it is worth employing a managing agent to look after it for you but do not forget to factor in their costs as it will reduce your profit.
9. How often do you intend to visit the property yourself to ensure it is kept up-to-date? If it is a long term let, think about the wear and tear on furniture and other fixed goods.
10. Always get your finance approved in principle before signing a contract and if you are applying for a mortgage, ensure any contract signed is “subject to finance”. This will help you recover an initial deposit if you are turned down during the mortgage process due to financial analysis, valuation and legal issues.