What you need to know before you buy a property abroad
Purchasing a property can be a complex and difficult procedure at home, but for people going through the process overseas there are even more issues to consider and potential obstacles to overcome.
But if buyers make their plans carefully and take a cautious, considered approach, there is no reason to get caught up in any legal, financial or administrative tangles.
Below are a few pieces of advice to help anyone planning to undertake a foreign property investment.
Proceed with caution
In its advice to buying a property overseas, the Foreign and Commonwealth Office (FCO) recommends using the acronym Care, in which the letter C stands for ‘caution’.
As investing your time and money in a home abroad is such a big step, it is crucial to take your time, look through as much information as possible and seek advice from authoritative sources before going ahead with a transaction.
One of the most sensible ways to get the process underway is to look into property laws in the country you are interested in. Regulations can be very complex and difficult to navigate, so it pays to give yourself time to get to grips with them.
Take independent legal advice
Another approach that pays dividends is to use an experienced, independent lawyer with strong knowledge of property law who can guide you through the process.
According to the Association of International Property Professionals (AIPP), this is a crucial step, regardless of how smoothly the deal seems to be going and how good a relationship you feel you have with the agent, vendor or developer.
Your lawyer’s most valuable attribute is independence, meaning they represent your interests alone and take on the responsibility of keeping you protected and informed.
Legal counsel is not an area for cutting costs and lawyer fees should be factored in as part of the overall purchase costs, according to the AIPP.
Do your research
One of the best ways of ensuring that you feel fully prepared and comfortable going into the buying process is to do some thorough and exhaustive research.
The FCO recommends a number of ways of familiarising yourself with overseas property markets, including searching through local papers and forums, reading independent purchasing guides, comparing real estate prices and visiting your location in advance.
Another crucial step is to do your numbers and clarify your budget before even starting to look at properties. This stage could include a provisional mortgage offer if you are planning to borrow money.
Keep it professional
Insist on professionalism at every step of the process. At the surveying stage, for instance, make the most of the Royal Institute of Chartered Surveyors, which encompasses a network of some 100,000 qualified members in 140 countries who can provide impartial advice.
Membership of the AIPP is also a sign of a company’s professionalism and reliability.
To ensure the organisations you are working with are always up to scratch and never resting on their laurels, it can help to take a slightly sceptical approach and ask a lot of questions.
Keep an eye on exchange rates
Investing in property overseas can require international payments for mortgages and other products and services, so it is important to monitor exchange rates and understand how fluctuations are likely to affect you.
The AIPP points out that rates do not need to move substantially to have a major influence on factors such as the value of your purchase. A ten per cent fall in sterling against the euro, for instance, could put a property you were considering beyond your budget.
Taking time to speak to a foreign currency specialist will help you secure a rate of exchange and improve your knowledge of potential risks.