Should you ever buy an overseas property while on holiday? Your bank manager might say no. Or indeed, “Noooo!!”But there are good reasons, including financial reasons, to start the processes of buying abroad while you’re out there. You just have to be careful. Here is how to buy a holiday home, safely.
You’re on holiday, sipping sangria, gazing out over the azure waters of the Mediterranean and enjoying the sun and the warm breeze on your beautifully tanned skin. Suddenly it becomes completely clear to you. You want to own a property here, in the sunshine, right now. Not, “at some point in the future”, when you’re older, richer, more retired. But now, while you’re in the peak of health, while the kids can enjoy it.
So should you hop to it there and then? Get online and begin the property search while tucking into some tapas? Run around the local estate agents? Or should you stop, think things through, and wait until you get home?
Buying property abroad requires plenty of due diligence – the last thing you want is to be duped by someone flogging time shares in a bar. However, many people do buy a property while on holiday, and there’s no particular reason why you shouldn’t either. Here’s why, and how to do it more safely.
Read more about buying a holiday home in your favourite country by clicking on the link: France, Spain, Portugal, Italy, Cyprus, Greece, USA, Canada, Turkey, UK, Ireland…
Why spontaneity can be sensible?
Trying to identify the property of your dreams from websites listings isn’t ideal. Sure, it looks amazing in the pictures snapped by the estate agent’s professional photographer and his special lenses. But until you’re standing in the driveway you have no way of knowing whether your next-door neighbour is a pig farmer.
Being on the ground and able to check out potential properties with your own eyes is the ideal scenario. Even if you were to put the purchase off, go home and begin the property search from under a blanket on your sofa, you’d eventually need to fly out to see any contenders before you drop the deposit anyway. Choosing to buy a property while on holiday saves you that cost.
If you come on holiday to the same spot every year and would like to spend more time here. Or, you chose this destination with the toss of a coin and recognise it just feels right – the fact remains, when you know you know.
Buying property is a big deal. It’s a big investment. It’s easy to assume that a decision to buy a property while on holiday is foolhardy and a little barmy. But buying on a hunch, a gut feeling, a first impression, can be rational. According to behavioural economists such as Nobel Prize winner Daniel Kahneman, who looks at the value of instinctive reactions and decisions, our instincts have the wisdom of the ages behind them.
So if our subconscious is giving us the thumbs up to buy, you shouldn’t ignore it. Even more importantly, if something doesn’t feel quite right – such as alarm bells when the estate agent drives up in a Ferrari – listen to that too.
Why you need to be careful
It’s important to exercise caution if you make the decision to buy a property while on holiday. You’re in another country. Might you have had a glass too many at lunchtime? You perhaps don’t fully understand how things work in this country.
Even if you’re in an English-speaking country, places have entirely different rules for purchasing property. There are a couple of things you can do to protect yourself and to ensure you don’t get yourself in a financial pickle.
Firstly, set a budget. Do this at the beach, or over dinner, but definitely do it. Establishing what you can afford will help you to keep yourselves grounded. Furthermore, it will inform your search, and guarantee your estate agents don’t waste your precious holiday time showing you castles you have no hope of affording.
Secondly, know what you want. Take the morning off the water aerobics for once and spend your pool time listing the qualities you need in your property. What are your deal breakers? Write it all down, and this document will help your estate agent locate potential gems. It will also help steer you around things you neither want or need.
If you would love to buy in the sun but don’t have quite enough money, check out some innovative financing options, including equity release and mortgages, in Spain, France, Portugal, Italy, USA, Canada and other countries, in our new guides, How to Pay for a Property Abroad.
How to spot a good estate agent
If you want to buy a property while on holiday, you need to find an estate agent to help you. So, how do you know whether an agent is any good?
Firstly, no matter what country you are in, conduct a little preliminary research on the agent online. Establish that your agent lists properties similar to what’s on your wish-list.
Given you’re on a tight time limit, check whether your agent will be as helpful as you need them to be. Reach out to a few with your budget, wish list and return dates to the UK, then see who springs into gear fastest! You want to find a proactive agent, who has read and understood your needs. They must be willing to put in the work to help you find something quickly. Agents overseas earn plenty of commission – much more than in the UK – and that encourages all sorts of people!
Choose professionals who are registered with official governing bodies, or ask our advice on +44 207 898 0549. If they are a member of the USA’s National Association of Realtors, for example, there are professional standards to uphold. Additionally, you can ask them for testimonials from happy customers.
Furthermore, a good estate agent won’t just help you find the property, they will also be able to fill you in on everything you need to know about the area. Having someone who
knows their stuff, and who is willing to share that knowledge with you as you drive between properties, is worth their weight in gold.
How to find a lawyer
Getting lawyered up is essential if you buy a property while on holiday. This lawyer should be independent from any property company, specialise in overseas conveyancing and, if necessary, offer a bilingual service. Your lawyer will possess all the required information about property legislation, recent changes to the law and all other news about your chosen country or area, which might affect what you decide to buy. Also, they will be able to check whether there is anything on the property’s title deeds that should concern you. Property Guides can put you in touch with a trusted lawyer in many countries. Call us on 020 7898 0549 or email firstname.lastname@example.org.
Should you get a surveyor?
While your Portuguese villa, or French chateau might look completely perfect to the untrained eye, maybe have a qualified surveyor check that you’re right. The last thing you want is to spend your life savings on a property, only for it to cost you everything in the long run. Just because you’re feeling fancy free because you’re on holiday doesn’t mean you should forego the usual due diligence involved in making such a significant purchase.
Surveys don’t happen overnight, so you may have to pay a deposit to take the property taken off the market while waiting for the results. Your lawyer will help ensure any sale is subject to the results of the survey. This way your deposit will be protected too.
5 essential legal questions
It’s important to communicate clearly with your lawyer to ensure everything is done properly and so that you have peace of mind. It’s your lawyer’s job to walk you through the process, so don’t be shy when it comes to asking questions. Here are five examples:
1 – Is this deposit returnable?
Before you pay any deposit, make sure you know exactly what you’re paying it for, what type of deposit it is and whether it’s refundable. It might be a reservation deposit of around €3,000, which takes the property off the market for an agreed period. It could be an option contract which instantly becomes legally binding if you agree to progress the sale within a specified time frame. Make sure you know what you’re entering into before signing on the dotted line.
2 – What am I signing?
Have your lawyer walk you through the sales contract so that you know and understand what you’re putting your name to.
3 – What steps are involved in the purchase?
Your lawyer will outline every step you need to take before those keys are in your hand.
4 – How long will this take?
It’s important to get a grasp on the time frames of a purchase. For example, in Spain a sale usually takes a minimum of 45 days but can take longer if you’re purchasing a rustic property that requires inspection.
5 – What does this mean for your status in your country of choice?
If you’re buying a property to live in on a permanent basis, your lawyer will be able to guide you on legal requirements for emigration. They will also be able to protect your best interests and that of your family by helping you set up a will.
Essential currency questions
To act quickly while on holiday, enlist the services of a currency specialist asap. Smart Currency Exchange are our trusted partners. They have been helping people to successfully buy property overseas for more than 20 years.
Any international purchase will involve changing pounds into another currency, and if you don’t manage this transfer sensibly, you could end up losing thousands. Currency markets fluctuate by the second. One day your property is comfortably within your budget, the next it could be far too expensive. Having your own personal trader on hand will ensure you secure the best rate and get the most for your money.
Additionally, if you think that you might find that dream property while on holiday, you can have your deposit at the ready, just waiting for you to give your trader the nod to wing it to the right account and lock in the overseas property of your dreams.
Is this the right decision?
So, should you do it? You need to ask yourself some searching questions. Clearly establish your aims and desired outcomes. Will you really want to keep returning year on year? Will the property be as charming out of season? Are you planning on using your property for holiday rentals. If so, is it in the best location? How many hours will it take you to get there? Is that number practical bearing in mind your other commitments?
Or, have you just had a little too much rioja? If so, don’t be afraid to take your time. Your overseas purchase should be something you’re sure of. Stick to the time frames that feel right to you.