A Cautious Approach to Buying Property Abroad

When you consider just how significant a purchase ‘property’ actually is to the average buyer, it’s very hard to fathom why so many people are willing to purchase unseen, to buy off-plan or remotely via the internet, and basically without the slightest inkling of just what it is they’re getting for their money.

It’s even harder to understand why so many people are rushing to buy property abroad without waiting for proper surveys to be conducted, without employing independent legal advice, without considering the long term investment potential and the day to day practicalities of owning a second home in a remote location...and yet this is exactly what more and more British people are doing every year.

The British national obsession with property, house prices, mortgage rates, bargains and investment property hot spots has gone global.  It seems you’re no one nowadays if you don’t know someone with a second home abroad! 

So, the time has come - I’ve tentatively tip-toed around this subject area for some time now, not wanting to sound like a party pooper or a reluctant and passion-free person - but the time is right to promote the idea of applying a cautious approach to buying property abroad!

First up, don’t leave your brain on the plane! 

You will no doubt be seduced by the surroundings of your chosen destination into dreaming of the idyllic holiday-like lifestyle you can enjoy all year round when you secure your dream home in the sun, but you have to ensure you tread carefully because there are traps and pitfalls at every stage of the property buying game and these facts do not change just because you change country.

Set yourself a realistic budget based on the research you do into the types of property you’re interested in, the area you’re interested in and ultimately the country you’re interested in. 

Know that if something looks like a bargain and is selling at a price that is ‘too good to be true,’ chances are you should walk away!  Employ the same defensive tactics as you would employ if buying ‘back home!’ I’m not suggesting you set out determined to see the bad in everyone and convinced that each person you speak to is trying to rip you off, but at the same time I’m telling you that not everyone you come across will have your best interests at heart!

Do research into the local market and find out how the property buying process works in your chosen country.  You need to know whether you will be asked for a securing deposit when you register an interest in a property, you need to know how much this will likely be.  You have to know whether an offer is legally binding, you need to understand how property law works in your country of choice.  All this research can be done before you even set foot on the plane!  If you arm yourself with solid basic facts then you will be in a strong, confident position and you will be less likely to fall for estate agent exaggerations.

Don’t be rushed into making a decision or parting with cash.  Make sure you employ independent and qualified legal support to ensure your interests are protected.  If you are unsure of the meaning of any paper work you are asked to sign make sure you get it translated.  Pay attention to detail - make sure boundaries are marked on the contract you sign, make sure your solicitor confirms them with the local land registry office. 

Never ever assume anything; never ever accept it when someone assures you of a fact...get facts and assumptions confirmed by having them written into the legally binding contract.

While it’s true that many property markets offer an attractive and affordable alternative to the UK property market, it doesn’t mean that you can only profit by purchasing abroad.  Time and again you hear stories of usually level headed people snapping up property bargains abroad without a second thought.  These people don’t have surveys done on the property, they upset the neighbours permanently and alienate themselves by demolishing and rebuilding and creating noise and dust, they don’t bother considering how planning applications work and get turned down and have an uninhabitable property on their hands, they don’t know where their boundaries are, they find out they don’t own what they thought they owned, they encounter title deed problems - and these are just people I know personally!

Don’t become a victim of the overseas property market by failing to do your homework and by being a passive purchaser.

The final warning goes out to all those people funding their overseas property through equity release on their UK homes. 

Think carefully about the level of debt you’re exposing yourself to and how you will manage that debt if interest rates go up, if you cannot rent out your property abroad for the income you anticipated, if you want to sell up and the market is deflated for example.

Please do your comprehensive and boring homework.  Approach buying a property abroad in the same way you would approach buying a property back home.  Why does that sound so banal and stupidly obvious?  Because it is banal and stupidly obvious I suppose - but guess what, it isn’t the approach most people take!

And finally, do not be put off!  With property prices in Malaga and Montpellier having soared some 144% over the last 4 years for example, you can see the benefits of taking the time to find the right property market and the right property and basically the benefits of getting it right!

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