Purchasers looking to cash in on the boom in overseas property this Christmas could be in for problems if they leap in, pay a non-refundable deposit, and sign on the dotted line without taking advice, CFS is warning.
Interest in buying property abroad for investment or retirement purposes is running at record levels and shows no sign of waning, said Simon Conn, senior partner at CFS.
He said: "Unfortunately with many more of us spending the festive season in the sun, some can be tempted to snap up the property of their dreams before doing the necessary research into the, sometimes complex, purchasing processes involved in buying overseas."
"Before they know it, they can be in a `no way back` nightmare - that would have been totally preventable with the right forward planning and which has the potential to turn what seems a perfect seasonal purchase into a prize turkey," he goes on.
In order to help potential purchasers to avoid this situation, CFS has issued a list of `top tips` that it believes will help to smooth the buying process and ensure purchasers can enjoy their property abroad with confidence and security.
"The golden rule is always to make seeking specialist advice your first move before buying overseas and by following this rule the property you consider this Christmas could be the best present you ever buy," concludes Conn.
Top tips for buying abroad:
1) Don't sign anything you don't understand. CFS has had many examples of clients purchasing an overseas property,
which has had no planning permissions, building licences, title, legal registration (in the current seller's name) or may have a debt already registered against it - ie: The developer may still owe money to the bank who have assisted in the construction process.
2) Seek specialist advice.
Before considering a purchase overseas, a purchaser should seek specialist advice from independent solicitors and architects (whose offices should not be close to the intended purchase, so as to ensure impartiality), who should be both proficient in their chosen country's laws and processes and
also know the specifics involved in buying a property there.
3)Get an independent valuation
Before proceeding with the purchase (especially applicable to a resale property), they should seek an independent valuation, so problems such as subsidence, damp, wiring defects or boundary disputes are revealed.
4) Protect your deposit
If a purchaser is arranging finance on the property this should be stated in any contract. This is because, if an 'opt-out clause' is given and the loan is not agreed, this will ensure any deposit previously paid is refunded. They should also try and arrange their mortgage finance 'in principle', before agreeing to purchase, or before signing any contracts and paying a deposit.
5) Check for hidden extras
They should check with the estate agent or vendor on costs charged by legal and government authorities for purchasing a property.
6) Do not be pressured
Do not be pressurised to sign there and then, especially with 'off-plan' type arrangements, as the promised re-sale once built and guaranteed rentals are not always as easy/available as indicated. Try and see other resale or recently constructed properties already on site - which will give an idea of the 'quality of build' - and speak to other purchasers to check on their experiences. You can wait until you return home before committing and then check with the same type of financial experts that you would do as if purchasing in your home country, who may not always be able to give exact but can give sound practical advice on the principles.