Before beginning any property transaction, whether in the UK or overseas, it’s vital that you carry out as much research as possible, and also that you understand the scale of the financial commitment you’ll be entering into.
While the internet is a good starting point for gathering information, you should also plan to make at least one visit to the region you’re considering; otherwise, you run the risk of making an ill-informed decision about a property, location or price.
It’s a good idea to try and talk to other overseas buyers about their experience of purchasing property in your chosen country. You should also consider renting an apartment or house in the area for a month or two, both to acquire local knowledge about the region but also to gain some personal insight about whether the location is exactly right for you.
We all have fantasies of owning a beautiful holiday home, of relaxing by our own pool and enjoying a sun-drenched tranquil setting. However, you can only realise these dreams if you ask some sensible questions before you buy.
You should always remember that you’re purchasing only what is written in your contract. You can't base the value of your property on any projected future growth or on anything else that is currently intangible.
Laws regarding the ownership of property by non-nationals or non-residents vary from country to country: it’s therefore essential that you have all the relevant information before committing yourself to an expensive purchase. You need to know your rights about property ownership as well as understand related issues such as taxes and fees for registration. For example, while some countries don’t have stamp duty fees, many do have an equivalent cost.
You should agree a flat fee with your lawyer at the outset, as some may try to bill you for extra costs if the purchase is delayed for any reason. Try and talk to several lawyers in the country of your choice and make sure you get several quotes for comparison. Check whether there are any property lawyers in the UK who specialise in transactions in the country of your choice – and if you do choose to use the services of a UK-based lawyer, make sure they are registered with the Law Society (www.lawsociety.org.uk).
Once you’ve retained the services of a lawyer, make sure that the contract of sale conforms to the civil laws of the country where the property is located. The laws of some countries state that there must be a dual contract of sale, which means that the contract must be written both in English and in the native language of that country.
Before the purchase goes ahead, your lawyer should investigate whether there are any restrictions imposed which might restrict your ability to sell the property at a later date. They should also check that there are no hidden taxes or fees involved in the purchase, that the property has a clean title and that it is free from any debts or disputes. In some countries, property ownership may be shared by several members of the same family; your lawyer must therefore ensure that all the owners have signed the contract allowing the sale to proceed.
And finally, before handing over your contract or any other legal documents, you should always make sure that you have a copy for your own records, and that you have a receipt from your lawyer or the seller’s lawyer, confirming that they are in possession of your original documents
Property purchases are usually priced in the local currency, which means that you may need to organise a transfer of the equivalent value in sterling. Before transferring any money, check the exchange rate on the day, and remember that exchange rates listed on any currency converter will not include bank charges or broker fees. It's advisable, therefore, to base your calculations on a value 3-4 points lower than the figure displayed. For example, where a conversion rate is 1.80, your calculation should be based on a rate of 1.75 – 1.76.
If you are transferring money to an estate agent, ask to be provided with a bank exchange rate receipt showing the sterling amount exchanged along with the rate and amount received. Alternatively, you could use a money exchange company in the UK from whom you would purchase the exact amount in your required currency. Most money exchange companies will then forward your payment onto its destination.
If you need to decorate or furnish your property, it is a good idea to visit as many local suppliers as possible in order to get some prices for comparison. If you have purchased a property in a tourist resort, prices of goods will be higher and you may want to travel to the nearest city or town where prices may be cheaper.
While most off-plan properties have an optional furniture package, it is still a good idea to obtain independent quotes. This will allow you to weigh up the cost and convenience of having the building developer furnish your property for you against the cheaper option of sourcing furniture yourself.
When buying a property, either the UK or overseas, it is essential that you understand that the value of your investment can go down as well as up. Property prices can remain stagnant for years, shoot up to unsustainable levels or devalue dramatically. So if you do see some capital appreciation, you should not assume that this trend will continue. The key to any successful investment is judging when to buy and sell.
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