People are no longer bound to stay in their native country. They can jet-set across the world or make another home abroad. Living abroad can be fun and life-changing, but it can have serious ramifications if you are unaccustomed to how other countries sell and buy a property. That is why it is important to educate yourself about how to purchase your new home overseas. If you are ready to buy property abroad, here are a few guidelines you should keep in mind before you sign on the dotted line.
- Make Use of Professional Property Agents and Developers
Every country has professional real estate agents and developers, with apartments and villas to buy. If you are buying a property for business, a developer is an essential asset. Buying a property can be risky anywhere. When you enlist the help of an agent or developer you are reducing the risk that can occur when buying a property overseas.
When you hire a professional agent or developer, you should be like an annoying 3-year-old and ask any question that pops into your head.
*Make sure you ask plenty of questions so that you can understand every aspect of purchasing property overseas.
*Your initial questions should target the company you are using. This can help you vet them and to see if they are the right fit for you.
*Next, do a little more research on the company. See if their track record and other details match up with what they’ve told you. Make sure you get the details of what services they offer to their customers.
*Do not agree to be represented by them until you get a written Term of Business.
- Find An Independent Lawyer
If you are purchasing overseas, an independent lawyer can help make the transaction as smooth as possible.
*An independent lawyer is a lawyer who represents you and only you. They do not represent your real estate agent, your developer or an investment group.
*The lawyer will protect you and inform you about any risk or dangers associated with making a purchase. *Never trust your agent only. Get confirmation from your lawyer throughout the entire process.
- Crunch The Numbers
*Set your budget before viewing properties. If you are borrowing money from a mortgage lender, this budget should include the provisional mortgage offer.
*Do not buy more properties than you can logically afford. It is a huge risk if you are banking on selling extra properties. (See #4)
*When you borrow money, you should take into consideration that borrowing criteria can change over the years. Before you borrow, discuss fixed long term repayment plans with your financial specialist before purchasing a property.
- Risk To Reward Ratio
Some people buy property overseas for investment. If you are buying your property for an investment, you have to assess whether or not the reward is greater than the risk. For instance, if you are buying more property than you can afford on the assumption that you will make more money if you sell it at a later date, you can be setting yourself up for financial disaster. Objectively look at the risk compared to the rewards. In most cases, big returns require significant risk. You have to figure out if the big return is worth the hassle.
- Keep Up-To-Date With Exchange Rate Movements
*A small change in rate can affect you and the value of your property. If the Euro drops 10% in value, the property you were looking at can become too expensive for you to afford. You can control this a little by talking to a specialist in your desired overseas area to secure your rate exchange.
*The cost of mortgages is also affected by rate fluctuations. Take to a foreign exchange specialist to help you lessen your risk.