Home Purchase Tips
Are you looking for your little corner of sun draped heaven on earth? If you are you’re for certain not alone!
Many Northern Europeans, Americans and Canadians are looking overseas for investment real estate or for a holiday bolt hole and if you’re considering buying a second home in the sun, a home from home abroad or an investment property overseas and you’re in a hurry to get started, these top 10 home purchase abroad points for success should set you off in the right direction.
1.Lawful Advice
Legal systems differ from country to country so never assume that you realise how exactly the whole house buy work is getting to work, and never anticipate things to of necessity go exactly your way! To be assured of the fact that your personal interest groups are being looked after and that you, your money and your property are 100% secure, legal and lawful it’s vital to seek independent legal representation in the country you’re considering buying property in.
This is specially sure if you’re buying property in a country where you do not speak the spoken language. You will be setting your name, signature and bond to contracts and legally binding documentsand however pleasant and helpful the real estate agent or vendor are it’s in your own best interests to make sure you have a local lawyer who’s in your pay representing you at such times.
2.Make Times
If you purchase off plan or you’re self-building or recreating abroad you need to factor contingency into your overall time planning. Weather, seasonal insistences, vacations, accessibility of important building stuffs - the list of factors that can adversely impact the build time of a house is almost endless! Your builder may confidently assure you that your property will be complete by a given date, and yet, depending on where in the world you’re buying your property, the completion date is likely to always be delayed! It’s just ‘one of those things’.
3.Specifying a Practical Budget
Other element, like time, that can oftentimes spiral a little out of control is the budget. Often we’re told that we should add an extra 10 - 20% on to any purchase price for fees and taxes; that’s all very well, but actually you have to factor extra money into your budget for things like seeing your second property abroad during and after the build phase, extras like light fittings, curtains, kitchen and bathroom upgrades, the application for and connecter of vital services, removal costs and/or furniture purchase costs, satellite TV installation, air conditioning or heating installation, car rental. If you have a set budget limit it’s important to sit down and work backwards including all the potential extras and fees and then see exactly how much is left for your property purchase. Don’t be caught out and seduced by the sunshine, set budgetary limitations before getting on the plane!
4.Latest Communication
If you’re buying a brand new property abroad - either off plan or during its build phase - make sure you have some way of continuing in reach with the developer or dealing agent. Ask in frontal about how often you will be kept up to date with progress, whether they can email or send you regular visual updates and what level of ongoing communication you can expect for them. Buying property is a very big consignment - financially and emotionally - it’s important you’re not left in the dark, sitting back home wondering how on earth your investment is coming along. Sort out your lines of communication before you sign on the dotted line and make sure you’re entirely comfortable with how the process will work.
5.Supervising & Dealing
If you self-build abroad or purchase to recreate you will require someone on site or in the vicinity of the property to oversee and manage the on-going build process. If you employ someone to take on the project management you need to be assured of their experience and credentials, you also need to comfortable with any language or social conflicts and that they will not affect the successful outcome of the project. Ask for references, ask to see other properties they have managed, ask to see qualifications. In terms of language and cultural differences you need to make sure your words will be understood and interpreted correctly, you also need to be sure that any instructions are passed on correctly to the builders. Employing the right project manager is a very important task! Get it right and the project should be a dream, get it wrong and the concept of ’stress’ is one that you will become increasingly familiar with!
6.What You View Versus What You Gain
If you’re purchasing off plan or remotely (e.g., from the comforter of your arm chair back home) you need written verification that what you see is what you get. All too often agents will show you the top of the range property and stop when your budget is going to buy you something more or less different. You need every detail confirming from the size and location of the plot, the size of the property with each room broken down, detailed floor plans with the location of windows, doors and integral items (from air conditioners to kitchens), the finish on doors, walls, floors, bathrooms, kitchens, external areas etc. And get some idea of the build quality. You might expect the quality to be on a par with what you have back home but you could be mistaken, what if there is no damp course or no cavity wall for example?! If possible visit other sites that the particular developer or builder has already completed to see the standards to which he builds to, and have all important site completion details written in to the contract with a clause stating you do not hand over final monies until you are 100% self-satisfied. Please don’t assume anything! So many people get caught out because they don’t ask the right questions at the right time.
7.Abroad Mortgages
If possible have any mortgage agreed in principal before jetting off to find your dream home in the sun. You need to know exactly how much money you are going to have before making any form of commitment to buy - even if that is a verbal commitment. In some countries such a commitment is as legally binding as a final contract! Furthermore, make any real estate agent aware that you will be seeking a mortgage for the purchase of any property before setting out. Then, if you find a house you like make sure the purchase contract is conditional to you securing the finance you need.
8.Investment Potency
If you’re looking to buy investment property abroad make sure you research the property market of the country you’re examining. Look at it from the points of view of stability, growing potential and the runniness of the resale market - after all, it’s all very well buying a property that then increases by 30% but what if you cannot then sell it?
9.Taxation
Check out about both the local and overseas taxation liabilities relating to foreign property purchase, rental, resale and gains. As taxation issues and liabilities change on a country by country basis you have to make sure you do your own detailed research but expect to face purchase tax in the country you’re buying in, gains tax if you sell within a given period and profit from the sale, also expect to pay some form of income tax either ‘back home’ or in the country in which the property is excavated if you rent it out for an income.
10.Property Purchase via an Offshore Company
The option to establish an offshore company for the purchase of real estate abroad is an option available to most people, but whether it is an appropriate course of action to take depends on many factors. Such factors include where in the world you wish to purchase, the value of the property and the laws relating to foreign ownership of real estate in that country. By using an offshore company to buy abroad an individual can sometimes avoid or reduce their taxation liability, avoid certain expenses and even laws. But the applicability of this option is something that can only be determined on an individual, case by case basis.
