In today’s globalized economy, purchasing a foreign property has become an option for Midlothian buyers who in earlier times would never have even considered it. As an investment, a vacation or retirement property, or as an accommodation for children studying abroad, there are many reasons why you might decide to look into purchasing a property outside of the Midlothian market. Here are some general tips for how to go about making a real estate purchase overseas:
1. Research the Foreign Market
Research the local real estate market carefully. Its cycles and trends are likely to be markedly different from ours here in Midlothian. Don’t assume that because real estate prices are on the rise here, the same is true in any given foreign market. You should also step back to make a realistic appraisal of the overall stability of the country’s economy—it will affect your investment.
2. Check the Laws Regarding Foreign Ownership
Many countries place ownership restrictions on foreigners. It’s a favorite ploy of fraudsters to “sell” foreign property in markets were non-citizens are not legally allowed to own…and it’s only one good reason why you will be wise to—
3. Retain an Independent Local Lawyer
You will want to consult a lawyer when purchasing any foreign property. That lawyer should be representing you and you alone. Make sure you can communicate clearly and easily with your lawyer, and that your queries are answered in a timely manner. If you find yourself having major difficulty in selecting the lawyer, that may indicate more serious issues to come.
4. Visit the Property
You or a trusted representative should visit the property before buying. This may sound like a no-brainer, but persuasive pitches and affordable prices can be powerful inducements. Photos, videos, and other marketing materials are designed to present the property (or even a nearby property!) in the best possible light. At a minimum, have a friend or family member look over and photograph the actual site. You need to be firm in your insistence that the property lives up to your expectations.
5. Plan for Changes in the Exchange Rate
Unless you are purchasing the foreign property outright, you may be contracting to make payments over decades—years during which exchange rates might shift significantly—impacting the actual total purchase price. Too, if you are paying for the property outright in cash, there can be a delay between when you agree to the purchase price and when the funds are transferred.
6. Translate all Documentation
Once you have signed the foreign property transfer documents, you will be legally obligated to abide by all its terms, so before signing any documents, make sure that they have been accurately translated. Even relatively small differences in wording can create problems.
Purchasing a foreign property can be a legitimate way to diversify your real estate holdings. Approach the foreign market carefully, do your research, and have the right local representation. But before you make a final decision, think about giving me a call to see how today’s comparable Midlothian properties compare!