Lots of people are keen on buying a home on a sunny shore or in a city of their dreams. The price of foreign property can seem very attractive, especially when exchange rates favour the currency of the prospective buyer. Whatever your motivation, chasing this dream can be like walking on a minefield and it is smart to be aware of the risks involved.
There are some simple things you can do to help limit the risk and (hopefully) live happily ever after!
Research & independent advice
You should always do careful research and only take independent legal advice when you want to avoid getting burned. You need somebody who understands the laws of your chosen country, and speaks the language fluently. Be aware to not use someone recommended by your developer or estate agent as they may not have your best interests at heart.
To avoid unexpected surprises about the property after the deal is closed, you should pay for an independent survey to highlight problems like subsidence and boundary disputes.
Before parting with any money you should instruct a specialist property lawyer to advise on all contracts and documents, and prepare a proper due diligence report. Make sure that your solicitor checks that you have the right planning consent and licences and that your property has the correct title. It is also important that you are registered as the official owner.
When transferring money in your domestic currency, it’s usually better to change your money and possibly set up regular payments through a currency transfer service. Local banks typically provide foreign exchange services that involve wider margins on exchange rates, higher fees and limited transaction sizes, making them a bad deal for you.
Image: Houses going down by Images Money (flickr.com)