HOW TO AVOID THE FOREIGN PROPERTY RIP-OFF

5/08/2007

It’s the worst nightmare about buying abroad – losing your hard-earned cash to an unscrupulous seller and seeing your dream disappear. How do you prevent it? The answer, says Bernadette Costello, editor of Overseas Property Professional magazine, is to find a good agent. Here she shows you where to find one…and what they should do for you.

Q Why do I need an overseas property agent when I’m looking to buy abroad? A A good agent knows the local market and will find your dream holiday home or investment property in the right location and at the right price. Reputable agents do extensive research to check a developer has planning permission and they’ll make sure your property carries your name on the title deeds.
A An agent’s contacts are invaluable, especially if you don’t speak the language. They’ll know if the area has a good resale market and what facilities are available – such as schools. You’ll also save time using an agent.

Q Where can I find a good agent when I’m about to take the plunge and buy abroad?
A Log on to the trade association website (contact details below) and you’ll find trustworthy agents selling property in more than 40 countries. Check out the Association of International Property Professionals for their 230 members, while the Federation of Overseas Property Developers & Consultants (FOPDAC) say they have more than 850 members selling overseas. Weekend shows like A Place In The Sun Live or the Homebuyer Show allow you to meet agents face-to-face, or ask friends if they’ve used any good agents.

Q How do I know if an agent is genuine and isn’t just selling me a dud?
A More agents than ever are promising to follow strict codes of conduct from trade bodies. If they don’t they could get chucked out, fined or named and shamed. Log on to www.ismyhouselegal.com – which checks whether a developer has planning permission. 

Q What else can I expect my agent to do for me when I start my search for a home?
A They’ll show you the area, find properties and explain the buying process. They will take you through the contract and many will put you in touch with independent lawyers, a currency specialist and a notary. Above all they should make you feel confident.
 
Q What’s the difference between an agent and a developer?
A Agents work with developers whose properties they think are good value for clients. Developers sometimes sell direct but in most cases they pay agents a commission. The agent offers buyers some protection because they can negotiate on their behalf.
 
Q Will an agent show me all kinds of properties or do they have tie-ins with different developers?
A Some agents have exclusive deals with developers while others sell a range of properties. Exclusivity is often based on quality of service, while access to a range of markets offers buyers more choice.  Q Will I have to pay an agent commission for helping me find and buy a home? A Yes, but feel free to ask how much this is. Your money will normally go directly to the developer and it’s the developer who pays the agent commission.
 
Q Do agents organise inspection trips to overseas properties?
A Often agents will offer you a trip, costing as little as £89 for a two-night stay, and show you as many properties as they can. Sometimes the visit is free. 

Q Who can I complain to if I’m not happy with the service I receive from an agent?
A If your agent belongs to AIPP, NAEA or FOPDAC, contact these trade bodies. Complaints will only be followed up if you notify them in writing. Paul Owen, of the AIPP, says: “In most cases you’re on your own – that’s why it’s worth looking for agents who have voluntary membership of a self-regulatory body.”
 
Q Can an agent source an English-speaking lawyer for me?
A Yes. But make sure the lawyer is acting independently and is not tied in with the agent.
 
Q Do they help out with organising the finance behind the deal?
A Yes. Good agents will have a list of contacts for you.      

Where do I start looking? 

The Association of International Property Professionals
The 230 agents and developers in the AIPP were vetted before they became members and have undergone industry training. They abide by a strict code of conduct. Visit www.aipp. org.uk or call 020 7409 7061.
 
Federation of Overseas Property Developers & Consultants
FOPDAC and the international section of the NAEA (www.naea.co.uk) have become partners, taking their overall membership to 14,500 agents in the UK. Visit www.fopdac.com  

A Place in the Sun Live!
Widely regarded as the best overseas property show in the UK. The next one is held at Birmingham’s NEC, September 28-30, 2007, and it will be held in Manchester in February 2008. There’s a list of agents exhibiting at www.aplaceinthesunlive.com
 
Remember! If your agent is a member of a trade body they must follow a strict code of conduct. If they mess you about you can complain.
 

Useful legal contacts

-Acacia International (Turkey), www.acacia-int.com, 020 7610 3333.
-CBA Law Solicitors (various countries), www.cba-law.co.uk, 01473 621800.
-DWF Solicitors (Spain), www.dwf.co.uk, 0161 603 5000.
-Giambrone & Law International (various countries), www.giambronelaw.co.uk, 020 7353 6800.
-The International Law Partnership (various countries), www.lawoverseas.com, 020  7061 6700.   

Top 10 tips to buying abroad 

1 Ask yourself why you’re buying. Is it to rent out, for retirement or purely for a holiday home?
2 Get a lawyer involved at the earliest stage and make sure they are working independently from the agent.
3 With additional costs, such as property tax, agent’s commission, land registry, notary fee, lawyer fee, a furniture package and maintenance fees, can you afford it?
4 If you have decided not to go ahead with the property tell your agent immediately. It saves them time phoning you and stops you getting calls.
5 Find out what previous projects the developer has completed successfully.
6 Compare the prices of similar properties within the local area – are you getting a fair deal?
7 This is an unregulated market so ask your agent if they are a member of a voluntary trade body such as the Association of International Property Professionals, FOPDAC or the National Association of Estate Agents.
8 Use a currency specialist to get a better exchange rate – they could help save you thousands.
9 Would an overseas or foreign currency mortgage be more affordable, or less risky, than releasing equity from your UK home?
10 You want your dream home to rise in value, but make sure it ticks all the lifestyle boxes, too.