Many people who have travelled abroad have felt the temptation to purchase property overseas. For example, UK residents often consider buying overseas property in nearby European countries like France or Spain, and real estate agents often locate near popular tourist attractions to sell property to such visitors.
Sometimes the price of foreign real estate can seem very attractive due to the foreign exchange rate favouring the prospective buyer’s currency. Tourists can also become enamoured with a delightful travel destination, perhaps leading to an interest in buying overseas property as a way to spend more time there. Still others might be interested in investing in undervalued overseas property based on the view that it will appreciate substantially over time.
Whatever your motivation for buying overseas property, the following top five tips can help ensure that you have a more positive experience in doing so.
Although global property price trends do occur, property markets in different locales can go through cycles of rising and then correcting lower. These cycles may be moving independently in each location.
In other words, just because property values are rising in your neighbourhood, does not mean that they are also rising in Spain or France. Such trends are especially important for investors who will typically want to buy near the bottom and sell near the top of a cycle.
Furthermore, some countries prevent or limit property ownership by foreigners, so you will want to make sure that you have the legal right to purchase real estate in that country and under what conditions you can do so before handing over any money in order to avoid scams or disappointment.
Basically, before putting up your money it really makes sense to do your homework about the property market in the country where you are considering making a purchase.
Great deals can certainly be had when buying property overseas directly from owners. Nevertheless, if you are unfamiliar with the local property market, then purchasing through a professional estate agent or from a reputable property developer can provide useful guidance that can help you avoid many pitfalls when buying overseas property.
Such professionals typically have an obligation to see that you are properly informed about the details of the purchase. They will also usually make an effort to complete the deal and ensure your satisfaction with it.
Even if property deals in your country of residence may generally not require the services of a lawyer, having an independent professional attorney representing your interests and watching out for potential legal problems can be invaluable when buying property overseas.
Before signing any documents relating to a potential property transaction, make sure that you have them professionally translated if they are written in a foreign language, such as French or Spanish, that you are not entirely comfortable reading. In general, you need to know exactly what you and the seller are agreeing to, in words that you can clearly understand.
Once you have read, understood and agreed to the terms of an overseas property purchase, you will then need to make arrangements to pay for it.
When transferring funds denominated in your domestic currency to make either a payment in full, a down payment, or a series of smaller mortgage payments, you will probably want to find a better foreign exchange solution than simply visiting your High Street bank.
Such local banks typically provide poor forex services which often involve very wide dealing spreads and limited transaction sizes. Fortunately, you can usually do much better by changing your money through a regular payments service, such as that offered by OFX.
Remember to mention BritishExpat when you register to get your first two transfers FEE FREE!