Buying a property in another country can be both a
rewarding and an exciting prospect for many property
investors who have always dreamed of owning their
own piece of their favourite holiday destination,
but investors are warned not to let their hearts rule
their heads. It’s crucial to seek the right
advice and try not to cut corners. The principles
that property investor should stick to in the UK also
apply when purchasing overseas property.
Below are a few tips to ensure that purchasing an
overseas property is as hassle-free as possible.
Never sign a contract that you don’t understand.
If two versions are provided, i.e. English and local
language, ask your solicitor to confirm the English
version is a true translation, as you need to ensure
it doesn’t contain errors, omissions or extras.
Always read the contract. Ensure you are fully conversant
with the terms and conditions you are about to agree
Specific points to be clear about include:
• What deposit is required? Is it refundable
and under what circumstances?
• For new properties, what stage payments are
required and when?
• What is included in the price and what is
the cost of the extras?
• Check the due completion date.
Obtain an Approval in Principle
If you require mortgage finance, obtain an ‘Agreement
in Principle’ for the mortgage before agreeing
to purchase the property, or before signing any contracts
and paying a deposit. This will tell you exactly how
much you can borrow and the price range you can realistically
It will put you in a much better position with agents
and developers, proving to them that that you’re
a serious buyer, and you’ll be better placed
to negotiate price. It’s tangible evidence that
you can take along when house hunting and it can also
lead to your application being fast tracked once you’ve
chosen your property.
Before proceeding with the purchase (especially with
a re-sale property, regardless of age), ensure an
independent valuation of the property is carried out,
which should point out any problems with the property
– e.g. subsidence, damp, wiring defects - and
could also highlight any possible boundary disputes.
Seek specialist counsel from an independent English-speaking
solicitor who is not connected to your seller, estate
agent or developer. If required, you can also consult
valuers, surveyors or architects. They should be proficient
in your chosen country’s laws and processes
and also know the specifics involved in buying a property
It’s essential that they confirm to you that
all required permissions, licences and planning consents
have been obtained. In particular, your lawyer should
check that you’re buying a property with the
correct title. And that you are being registered as
the official owner.
One of the biggest advantages of taking out an overseas
mortgage is that the lender will do its own checks
on the property, ensuring that a proper legal title
exists, that the property is registered in the buyer’s
name and that a valuation of the property takes place.
New build properties
If buying from a developer
• What’s their track record?
• How long have they been trading?
• Are references available from previous buyers?
Check comparable properties in the area and any re-sales
offered on the same development.
If the developer mentions ‘rental returns’,
what are these based on? Check they’re feasible
and have been achieved in the past.
Before making any commitment to purchase, allow for
a cooling off period, just in case you see a must-have
property and are tempted to put down an instant deposit.