Homes Abroad

Buying Holiday Homes Abroad

It’s that time of the year again - Christmas is over, New Year celebrations were a bit of a let down and it’s raining - so everyone’s thinking about the summer, about holidays in the sun and about buying a holiday home abroad.

Therefore once again it’s time to write about the realities of buying property abroad for anyone about to don their rose coloured glasses, because all too often people fall foul of the charms of a particular country and don’t think through their property buying decisions properly.

I’m not going to put a dampener on your decision to buy a holiday home abroad - honestly I’m not! But this article is essential reading for anyone who has never bought a home overseas before because ‘things’ seldom go as planned or progress in the same way as they do ‘back home’ and you need to be prepared otherwise you will suffer unnecessary stress. After all, owning a second home abroad for holiday or investment purposes is a dream, and you need to make sure that the dream comes to fruition rather than turning into a nightmare!

First things first if you have a particular country in mind - I’m sure you do - you need to do some location, location, location type research. Different areas of a country attract different types of buyer - the Costa del Sol attracts a different type of holiday home seeker than Northern Spain; South Cyprus attracts a different type of property buyer than Northern Cyprus.

You need to ensure you’re looking at the areas of a country that will meet your particular dreams and aspirations for your holiday home in the sun. Once you’ve done a certain amount of research on the internet and in the library there will be only one thing for it and that’s travelling to a particular area and spending time in it! It’s a great excuse for a holiday. You will be tempted to look at properties right away but if at all possible take some time familiarising yourself with your surroundings, meet locals and expatriates who live in a given neighbourhood and try and get a sense of whether these are the types of people you can get along with.

Once you have a location fairly well in mind you need to finalise your list of requirements that the holiday home should fulfil. How many bedrooms do you need, how much outside space would be optimum, do you want a pool, a villa, an apartment, sea views, mountain views, access to shared facilities or are you after an isolated property miles away from anyone. With the list drawn up and a location decided upon you can have a look and see what properties are available for your budget. You may be pleasantly surprised or you may have to tweak your ‘must have’ list a little so that you can afford to buy a holiday home in your preferred location.

It’s important to have a fair understanding of what you can buy for your money in a particular location before you begin speaking to estate agents because then you will know whether you’re being shown a bargain, a realistically priced property or whether someone is trying to rip you off.

It’s at this stage in your research that you can contact estate agents and set up appointments to view properties. Give the estate agent your preferred location, your ‘must have’ list and your budget and ask them not to deviate from your criteria - be aware that an agent makes more money the more expensive the property he sells and so he will always try to stretch your budget! Stick firmly to your budget as there are always extra expenses that you will have to incur when buying property abroad and you don’t want to suddenly run out of money.

On that point it’s important to mention the fact that you will need to budget taxes, fees and costs like lawyer and notary fees into your budget. Get a list from an estate agent of all the additional costs you will have to pay and at what stage during the buying process you will have to pay them.

If you need finance to buy your holiday home abroad you should have this agreed in principal before you seriously begin looking. Once you find a holiday home and make a successful offer on it you will only have so many days to get the money in place to sign the final contract. If you have a mortgage or loan agreed in principal you’ll have plenty of time and far less stress when it comes to getting the money into the right account at the right time.

Get a lawyer - don’t get one the builder, vendor, developer or estate agent uses as you need an independent lawyer who will serve you and your best interests throughout the property buying process. Make sure the lawyer will run the title searches for you and make sure you talk to them about the decisions you’re about to make regarding the purchase of a given property before you make them! Local lawyers often know of any dodgy developers or contentious properties and can subtly warn you away from any unscrupulous persons if you just listen carefully to the advice they give!

Consider currency transfers - when buying holiday homes abroad it is estimated people can lose up to GBP 1,000 on a GBP 100,000 transaction if they don’t time their transfer correctly and end up losing out to fluctuating exchange rates. There are a number of well established foreign currency transfer companies now specialising in assisting people to make a transfer abroad for the specific purpose of a home purchase. Consider looking into their services and see how you can potentially save yourself money.

And finally, don’t enter into a decision overseas that you wouldn’t entertain back home, don’t believe everything you’re told by eager estate agents and property developers and don’t be tempted to buy the first thing you see without at least comparing it to other properties.