This week we have a guest blog from the team at Live Financial and it’s all about buying property overseas. With the European markets looking healthier than a few years ago, many of us Brits are choosing to invest our money in an overseas property. But with many still nervous about making an overseas purchase, the team at Live Financial have shared some top tips about how to safely purchase your dream property abroad.
The start of the spring also means the start of the planning process for many considering buying a property abroad. Whether you are still in the research stages, or ready to make an offer, it is important you plan!
Buying property is not a process to be rushed. You need time to research the market as a whole and also spend time researching the companies in the market place – using the right professionals will save you time, money and stress. Investing time and being prepared to spend money on good service providers at the beginning of the process will save you a lot of hassle later and potentially avoid expensive mistakes.
Here are some top tips!
Use an Independent lawyer
No matter what anybody tells you, no matter how easy it all seems and no matter how lovely the agent seems, always use an independent lawyer to represent you throughout the purchase of your property overseas.
An “independent” lawyer represents you and only you; it is the lawyer’s job to protect you and inform you.
Know your numbers
Make sure you know your budget before you start looking at properties – this should include at least a provisional mortgage offer if you’re borrowing money.
If borrowing money, your repayments will stretch over several years, years in which lending criteria and borrowing costs may change. Discuss the long term repayment with a financial specialist before proceeding.
Beware exchange rate movements
The rates do not need to move substantially to affect the value of your purchase. When you start looking, £100,000 may buy you a certain property – a 10% drop in the value of the £ against the Euro, for example, may then put that property out of your budget. If you’ve already signed contracts to buy, this could cause you a problem. Speak to a currency specialist discuss the option of securing your rate of exchange early.
The rate fluctuations will also affect the costs of mortgages (if you raise the mortgage overseas and earn your income at home). Again, speak to a currency exchange specialist to highlight the risks and to take appropriate action.
Use professional agents and developers
There are few, if any, guarantees when buying property, at home or overseas. Using an independent lawyer significantly reduces the risks you take on an overseas property purchase and employing a professional agent or buying from a professional developer will also help you.
Ask lots of questions. Initially, focus questions on the company itself, not the properties for sale. Dig around for details on the founders of the company and the track record of the company. Ask for client testimonials and make sure you find out in detail exactly what service they offer. Don’t just take their word for it – ask for details on their service in writing, preferably in the form of some type of “Terms of Business”.
Remember the risk to reward ratio
If you are buying property overseas as an investment (as many people have done in recent years), you need to bear in mind that big returns may come with significant risks. Be careful to assess the possible downsides to an investment property as well as the enticing investment numbers that could be achieved if all goes to plan.
For more information on foreign exchange and the services offered by Live Financial then visit their website at: livefinancial.co.uk/