Off Plan Property for Sale Turkey

Turkey will most certainly be one of the hottest destinations for property seekers in 2007.  The nation has a wealth of attractive and well priced real estate for sale, it has a fantastic climate, safe buying process and what’s more, property for sale in Turkey makes a good long term investment choice as well as a fantastic holiday home in the sun.

In this article we look at how a first time buyer of overseas property can find the best off plan property for sale in Turkey for their needs and avoid the pitfalls that are often associated with buying abroad such as being seduced by professional sales pitches and elaborate and unrealistic promises sometimes made by agents and developers!

Is buying an off plan property in Turkey too sophisticated for a new investor or can anyone do it?

Buying a property off plan overseas can be a relatively straightforward process as long as a buyer, whatever their level of experience approaches the process with their eyes wide open and always, always takes local independent legal advice before entering into any form of contract whatsoever – and in terms of property for sale in Turkey the advice is no different.

Another essential piece of advice for anyone buying property abroad is never be too nice or too trusting during the negotiation and purchase process – really, it pays to be quite level headed, direct and even ruthless without going so far that you alienate the developer, agent or lawyer of course!

Furthermore the saying ‘buyer beware’ was absolutely made for those buying off plan abroad because so many checks have to be made and questions answered before a buyer should commit to purchasing.  Nothing should be taken at face value, no important points of the sale should be agreed only verbally and every essential aspect of a sale should be checked before a signature is committed to a Turkish purchase agreement.

Buyers need to check out the pedigree of the company they are considering buying from, they should ask to see completed examples of a developer’s work, building permissions for the project in question should be checked as should title deeds and if at all possible checks relating to the financial liquidity of the property development company should be made to ensure that the company is not about to go bankrupt.  In addition to this it is essential a lawyer checks to make sure there are no outstanding debts or mortgages on the land to be developed and that the buyer of the property in Turkey will not therefore inherit any debts or be unable to get their title deeds upon completion of the sale.

In addition to these points, those buying off plan in Turkey should have very clear instructions written into the contract about when payments are due and the payment date should relate directly to the stage of build the property is at.  Furthermore there should be provision made for financial penalties if the developer is late on delivery because for every month a property is late an investor cannot rent out his property if he buying to let abroad for example and a holiday home purchaser cannot enjoy his holiday abroad.

Additionally the main issue to be aware of from the outset is that property law and also property buying processes differ greatly from country to country and so any potential buyer should ensure that they are aware of at least the basics that they will likely encounter if they buy property in Turkey.

By making yourself aware of the likely procedures that you will encounter when buying in Turkey, the length of time it can take to get to completion, the requirements that exist to get permission to purchase from local government for example, you will be ensuring you face no nasty surprises along the way and that no unscrupulous agent or developer can circumnavigate certain legal essentials of the purchase process.

So how do you avoid getting ripped off by pretty pictures and seductive sales patter when buying property in Turkey?

It’s actually very hard to avoid being seduced by pretty pictures and seductive sales patter because property literature and sales pitches are honed and specifically produced to get you to buy!  The best way is to question everything you’re told and check up on any and all promises made or inferred.  As stated earlier, never be too nice or too trusting because you will get ripped off – if not for your entire life’s savings then for the inclusion of air conditioning or white goods which a developer may be holding in reserve for negotiation purposes.

A top tip is do as much research about Turkey, the area and town where you’re wanting to buy before you even get on a plane and fly out to view properties.  Get a feel from a number of agents about what your budget will get you and then you’ll have a rough gauge of what you can buy before you even arrive meaning you are less likely to pay over the odds for your investment property or holiday home in the sun.

In addition to this please consider avoiding inspection trips – if you sign up for one you will be hounded by representatives of the company ‘sponsoring’ your trip and you will be put under immense pressure to purchase and put down a deposit before returning home. 

No one needs this extra pressure when considering making a property purchase as it’s a stressful enough experience anyway.  What’s more, just as there is no such thing as a free lunch there is no such thing as a free inspection trip.  Developers or agents ‘sponsoring’ the trip will have statistics relating to how many trips they have to provide before they get one sale and so the cost will be divided up accordingly and added to the cost of each property available for sale.

Always be suspicious, ask questions, don’t accept anything as a given unless you have factual evidence to back it up and when it comes to getting a contract drawn up have each and every single thing discussed, promised and agreed upon written into the contract and checked by your very own independent lawyer.

But how do you know if a property developer is going to produce what he promises?

Well, that depends a lot on the laws of the land in which you’re buying.  Buyers in the UK for example are protected by sophisticated laws that can prosecute developers who make false promises but in Turkey it can be tricky, and litigation procedures can be a nightmare in a foreign language even if the law is well and truly on your side.

So what you have to do is ‘due diligence’ and what this essentially means is you have to check out a developer you’re thinking of buying from in a rational and methodical way.  Ask to see completed examples of his work, check out the build quality, if at all possible speak to people who have bought from the developer before and find out how the purchase and build went for them.

On top of this you can ask around and speak to your lawyer about the financial state of the company and how long they’ve been in business.  Get as much background information about the developer and the state of his work before you even commit to buying…and then begin negotiations.  While the price of a property may not be for negotiation, (though it never hurts to ask), one can often get the inclusion of extras such as air conditioning or the upgrade of fixtures and fittings agreed by a developer eager for a sale and then with all the negotiation and haggling completed, a buyer should sit down and document every single thing that a developer has promised – from completion dates to penalties payable by him if he’s late, from extras included and discounts given, from materials used in the construction to where and when money should be payable.  All this information should be given to the lawyer or notary responsible for drawing up contracts and it should be agreed to and signed by the developer as well as the buyer.

Basically, by covering every single aspect of the sale carefully and staying right on top of all promises made a buyer of property in Turkey can tie a developer in to a very tight contract which is the best way of legally protecting the buyer’s interests and ensuring a developer delivers what he says he will.

So, from breaking ground to putting the roof on is it possible to make money from off plan property in Turkey?

In a word – ‘yes’ – though naturally there are lots of ‘it depends’ criteria attached to this answer. 

If you’re thinking of buying off plan in Turkey with the sole aim of flipping upon completion to realise capital gains that have accrued throughout the build process you need to be aware that you will be subject to tax on those gains (unless the build process takes more than four years!) and that this fact will reduce the attraction of this investment approach a little.

Furthermore you need to be sure that there will be a hungry market waiting for your particular property and which will snap it up upon completion allowing you to take out your initial investment and profit.  Therefore you need to be in a centre where demand for real estate is high and where purchasing power is likely to be strong enough to buy your property even when it has increased in value.  Istanbul will be a favourite for this approach in 2007.

For buyers who are just hoping to see a rise in the price of their property during the build process but who are hoping to let the property out or just enjoy it themselves rather than sell it upon completion, the main tourism and employment hotspots will be the best places for growth over the short to medium term and as long as the build duration is likely to be at least 9 months, those buying in the near future will enjoy a healthy period of price expansion as their off plan property comes to completion.

One final reason why those who buy off plan early in Turkey can often enjoy healthy gains during the period in between breaking ground and completion is because property finance for construction projects in Turkey is so expensive and so developers often offer early buyers good deals to get cash flow into a development project to fund its initial stages.