What To Watch Out For When Buying Property Abroad
The property industry seems to bring out the worst in many people – or perhaps certain elements of the industry just attract unscrupulous individuals? It’s probably because there’s so much money to potentially be made from real estate that dirty tricks such as gazumping and undercutting become common practice, and lies and mistruths abound. However, understanding why bad behaviour is synonymous with property doesn’t actually help the majority of us who are simply looking for a secure home.
What’s more, understanding that bad behaviour is common practice in the property industry certainly doesn’t assist those of us who want to buy a home abroad - because then even more complications arise because we’re likely to be less sure of when a lie is a lie, and when something unbelievable is actually true and just a strange quirk of an unfamiliar legal system! Therefore, in this article we’re going to summarise what you need to watch out for when buying property abroad so that you stand less chance of falling foul of the dirty tricksters!
Accepting that the property industry attracts sharks and conmen because of the potential money to be made out of bricks and mortar is an excellent starting point when you begin the hunt for that ideal home abroad!
Because you will then be far more likely to have your wits about you and question any tiny detail that crops up that seems unlikely. Remember that old adage – ‘if something seems too good to be true it probably is’ – well it certainly holds true when it comes to real estate.
So, assuming you’re now going to be suspicious of anything you’re told (!), if you come across a detail that appears too good to pass up, perhaps it’s actually a detail that is indeed ‘too good to be true.’ Therefore don’t take anything at face value, question every detail promised, request proof for any claim made and go through any contract with a fine-toothed comb before you add your signature to it.
When it comes to buying a property abroad off plan here are a number of other considerations that you need to keep in mind. The worst-case scenario for you is that the property you want to buy will never be built, or it will be on a development that is never completed.
Trust us when we tell you - this does happen.
You may well be lured by the promises of plunge pools on every terrace, of a water park for the residents, onsite amenities and facilities from spas to restaurants, tennis courts to fitness suites – but what guarantees do you have that any of these additional extras will ever be provided? And when it comes specifically to your property, what guarantee do you have that it will be built to your exacting standards?
You need to view completed examples of the developer’s work. I know it’s a bit of a catch 22 situation for a developer selling off plan if you refuse to buy from him because he has nothing completed to show you…but let him worry about that! If he is a serious developer who wants to be in the game for the long haul, he’ll find backing to help him construct and complete a project and sell once finished so he has an example of his work to help him build up his reputation. If he has nothing he can show you – walk away. I’ll just reiterate that and say it a little louder – if you are not shown a completed example of the developer’s work – WALK AWAY. Do not take a gamble – it’s just not worth it unless you don’t mind betting tens or even hundreds of thousands of pounds.
Now even if you have seen some completed examples of the developer’s work I will reiterate the point about you requiring guarantees about the completion of your specific property and the ‘promised’ amenities and facilities. You require something in your contract that states the development’s completion will be done by a certain date and if it is not then you will receive penalty payments, or the right to cancel the sales contract and have all monies paid reimbursed to you.
The only security you will have will be in the form of the contract that you sign – firstly you need to ensure you’re buying in a nation with a well-established legal system where the rights of property owners are protected by the law. Secondly you need to ensure the contract you sign is correctly written, legally binding and looks after your interests. You need a good solicitor on your side who can explain the intricacies of the nation’s legal system to you and guide you through the buying process. And finally, you have to ensure that any contract you do sign is conditional to your lawyer ensuring all is okay with the title deeds of the property, the freehold status of it and any other essential aspects such as you securing financing and a structural engineer returning a satisfactory report on the home.
In conclusion - take your time, do not be rushed into making a buying decision, trust gut instincts, don’t trust non-contractually bound promises and double check everything with your solicitor – that way you should manage to avoid the potential pitfalls of a property purchase, whether that be at home or abroad.