Buying a property overseas brings with it additional challenges to purchasing at home and amid all the confusion many buyers ignore the basic principles that they would normally apply to the situation, sadly ending up with a compromised purchase they could have avoided. The key things to remember are to do your research thoroughly, learn about the local and national market, take some qualified advice, speak to others who have already bought in the same area, test what you have been told and lastly and importantly don’t be rushed into a decision.
The purchase of a property abroad is often not intended as a permanent home, at least not in the short term. It will be for use as a holiday home, a rental prospect or as an investment and therefore the criteria for selecting a particular property will be different.
One of the main pitfalls is not knowing what you are looking for so try to define your needs and requirements as closely as you can, both in terms of the type of property and the location – without this your search will be too wide and you will waste a lot of time looking at unsuitable properties both at home and more importantly when on a search visit. Start with the basic property details such as an apartment or villa, how many bedrooms, must it have a pool, what size plot or garden? Go through all aspects and work out which are immovable and which you will compromise on. You also need to reach agreement with your buying partner/s to avoid possible problems later on.
Then ask yourself some more difficult questions to work out what else is really important to you – such as the style of property, the standard of interiors, i.e. how modern is the bathroom and kitchen and are you happy to do some renovation works yourself or does it have to be a new property? Test your views to work out your position.
Then do the same for the location – as well as the specific town or area also consider how far you want to be from a beach or the nearest town or village; will you always be happy to use a car?
One final factor in knowing what you want is to consider how you will use the property – will you also rent it out and if so will this be to the public or will you only allow use by family and friends? How often do you intend to visit and therefore do you need to consider who will look after it in your absence? These factors will influence your requirements too.
Once you have these answers you will have something factual to start your search with and a focus to enable you to include or discount potential properties as your search progresses.
It is essential that you understand how the purchase and sales process works in the local market – in Portugal there are inevitably differences to your home market and you need to be aware of these from the start. Purchase and sale costs can vary significantly. Also make sure you understand the structure of the market and don’t assume it’s the same as your home country – only then can you be sure that you have visibility of all that is for sale. For example in Portugal there is a strong private sales market that operates via local press and private signs, mainly driven by the high commissions that selling agents charge and there are many more estate agents than in the UK with most properties for sale with multiple agents.
Some consequences of this ‘shared approach’ are that written details are very brief indeed, nothing like the carefully produced glossy brochure you may be used to at home. Also the agent you talk to will often search other agents for properties they think might be suitable but may have no personal knowledge of them. It is important that you brief the agent fully, understand the details they are sending you, know how they are paid and ask lots of questions.
There are a myriad of property websites out there and estate agents sites making it easy to find any number of potentially viable properties that seem to meet your criteria. Without physically seeing the properties the challenge is then ensuring that those you add to your short list for your viewing visits are what they seem and that you won’t be wasting valuable time visiting unsuitable prospects.
One of the main reasons why buyers end up with a compromised purchase is down to time. Many allow too little time on viewing trips to see enough properties to get a good feel for what is available and to ensure they find something to meet their criteria. They would never fall into this trap at home. One thing you can do to mitigate this is to develop a good relationship with the sales agents and to get them to do as much of the work for you as possible – a key part of this is checking the facts and adding to the information provided in the written property details. Ask the agent specific questions based on your search criteria to ensure the property meets all your needs before you agree to view.
Searching for a property in an unfamiliar market takes time and at a distance is a difficult prospect for many. If you don’t have the time to search for the property yourself consider making use of a search agent – many operate in the overseas markets but most are not totally independent. They work closely with a number of estate agents and developers and are recompensed by sharing commissions with these agents meaning you will only be shown properties from their portfolios rather than anything else on the market that may better suit your requirements. You as the purchaser will have to pay for the services of a truly independent search agent – this is the only way you can guarantee they are working in your interests alone. However their costs may be offset by their ability to agree a healthy discount as they negotiate locally on your behalf.
Searching for the property of your dreams overseas is not an impossible task and many succeed, but by remembering to do thorough research, getting to know the location, building relationships with agents and giving yourselves enough time you can avoid many of the pitfalls along the way.