There is a lot you should know before you buy a property abroad. Exactly what you should know depends on the country you want to buy a property in. On this page I am going to talk about some of the general rules of buying a property abroad. Things that you need to consider regardless of where you are planning to buy a property. Contact me to get information about the area that you want to buy a property in.
The most important rule to remember when you are buying a property abroad is that the laws and regulations in the country where you are buying a property can be very different from the laws of your country. You can not assume to know anything.
What are very basic legal principles to you might not be a part of the legal system in the country where you are buying your property. There are many different legal system based on different legal principles. It is very important that you understand that American law does not apply outside of the United states. The same is true whatever your nationality might be.
The most important rule when buying a property abroad is.
Most transactions goes smoothly and most brokers are reliable but you can not assume that every one that works in real estate abroad is a trustworthy individual.
Being a broker or Realtor means different things in different countries. The united states and most of Europe regulates who can call themselves a real estate agent. It usually requires a license. The legal responsibility are clearly specified in the law and the code of conduct for real estate agents. This is not the case in all countries.
There are a large number of countries where every one who wants to can call themselves a real estate agent and sell houses are free to do so. They are usually not bound by any rules and it is not unusual that they stretch the truth to get a house sold. They will have no legal responsibility for any problems you discover with the house.
I normally recommend that you choose an expat real estate agent from the US or Europe. This will not guarantee that you find an honest broker. There are less then honest expat agents in most countries. It will however improve the chances that you find a good broker.
The main reason for choosing an expat real estate agent is to use an agent that has grown up in the same business culture as you have. This will reduce the risk of miscommunication. A broker that has the same background as you is also more likely to know what is important to you, what information you want and what you are really asking about when you ask a question.
You will also be able to tell what the real estate agent is real saying when he or she gives her reply. This is especially important when you a buy a property in Asia and some other areas where a lot of statement have a secondary meaning that the locals know well but you might not pick up on.
It is very hard to find out if a broker is honest or not. You can talk to local expats but that will often only give you part of the story. Many expat communities are full of resentment and petty conflict that can taint the answers you get. The answers you get can also often be based on no personal experience. Try to find someone who have already bought a house from a broker and see what they have to say.
Remember that many countries does not have exclusive listings so you have a choice of Realtor even if you want a specific house.
Talk directly to the owner
It is a good idea to ask to talk directly to the owner whenever possible. By talking directly to the owner you prevent the real estate agent from taking advantage of the situation. It is not unusual that brokers in some countries broker one price with you and another price with the seller pocketing the difference. This difference can sometimes be substantial. I know of several cases where the agent pocket 50% of the price. This is often not illegal but can be prevented by talking directly to the owner and by offering the real estate agent a straight commission.
You should know that it in some cultures is common for the owner of a property to tell a real estate agent “I want $100 000. You sell the house and if you can get more you can keep whatever you can get over $100 000.”. They prefer this setup to paying a regular commission. This is due to the fact that they feel that the commission comes out of their money even if they get more than they wanted. The real estate agent isn’t being dishonest with the seller by pocketing the difference. They are simple completing their mandate while earning as much money as possible.
If you have purchased a house this way it is important to realize that the agent didn’t do anything illegal and you should not feel resentful. You paid what you thought the house was worth to you. Whether the money you paid went to the real estate agent or the seller should not matter. Some brokers are in fact very good at their job. The might have pocketed a large chunk of money but still got you a better deal than you would have gotten with anyone else.
You should always arrange for your own inspection. Do not use the inspector that the real estate agent recommends. He might be very good but there is always a risk that he is a friend of the agent that will miss problems with the house to help the agent sell it. Or he might not be qualified to inspect the house but still get the job from the agent as a favor.
Do not tell the real estate agent that you are planning an inspection. Nor should you let him know who will be making the inspection. Simple ask to come and see the house a second time and bring the inspector unannounced. This guarantees that you get an honest inspection. ( or at least maximizes the chance)
This might all sound very paranoid and unnecessary. The truth is that it usually is unnecessary but I still recommend being paranoid for those rare occasions when every thing isn’t as it looks to be. My advice when buying a property abroad is always “trust, but verify”.
Remember that there is many countries where a home inspector doesn’t have any legal responsibilities. They are simple a contractor that have started to offer inspections on the side. They are not responsible if they miss something. In the end it is good to inspect as much as possible yourself.
Finding a good lawyer can be hard. Once again I recommend finding one yourself rather then using the one the real estate agent recommend unless you are familiar with the legal system in the country. You should look for a lawyer that is experienced in property law and if possible one that speaks English. If you can not find an English speaking lawyer you should always get your own translator. Never use one provided by the lawyer or the agent.
Do not be afraid to pay to get a good lawyer and translator. Hiring some one that is cheap can be very expensive in the long run.