When you have made an offer on a property abroad – and had it accepted – what happens next? If you’ve planned things right from the start, several professional services will sweep into action. These can have a profound impact on the success of the purchase and your enjoyment of it.
Found the home of your dreams? Ready to crack open the champagne and kick back in the sun for a few days? Maybe leave the celebrating until you’ve got the keys in your hand! There are still plenty of things to get sorted. Using the remainder of your time in the country to get some key things sorted will make the process of completing the property purchase much easier.
The good news is that most estate agents experienced at selling property to foreign buyers understand this, and will help you organise things and oversee the purchase.
Get a lawyer
You may have already been asked to sign a reservation contract to take the property off the market. That’s standard in many countries, but you still need to get it checked off with a lawyer. You will certainly need your own lawyer for the rest of the purchase process.
Some estate agents have lawyers who they will recommend. Others may say that you don’t need a lawyer – that a notary will ensure it is all legal. Neither approach is recommended. Your independent lawyer will look after your interests and only your interests. They will do the necessary due diligence on the property, oversee the drawing up of the sales contract and ultimately protect your interests throughout the purchase.
You may also choose to grant them power of attorney, enabling them to complete the purchase of your property on your behalf. You can easily have a lawyer on standby even before you do a viewing trip.
When signing a reservation contract you may be asked to make a deposit. It shouldn’t exceed more than a few thousand euros or dollars, but even for this relatively small sum, speak to Smart Currency.
Lock in your exchange rate
So, you’ve agreed a price in euros, dollars, baht or other currency. At the exchange rate when you make the agreement you can afford it. Say, it’s a €250,000 home and at today’s rate of 1.17 it costs £215,000, which is your budget. Now the lawyers will go to work and in two or three months you will pay the €250,000. But suppose in that time the GBP/EUR exchange rate falls to 1.13? Now you have to find £221,000. Suppose it falls to 1.08 and now you have to find £226,000. You’re still paying the same price in euros, but have to find a lot more money in your own currency.
Unless you are a gambler willing to risk tens of thousands, you may prefer to take that risk away.
It’s called “currency risk” and it poses a serious threat to any international transaction. An exchange rate losing 10% or more is far from uncommon and can leave purchases in real trouble. Of course, your exchange rate could improve and the property cost less. But unless you are a gambler willing to risk tens of thousands, you may prefer to take that risk away.
The good news is that we can remove that risk with a forward contract. This will set your exchange rate through the course of the transaction process. This is not a service that your high street bank or an FX app will give you.
Consider a survey
Not every purchaser gets a survey when buying a property abroad, but it doing so will certainly offer peace of mind.
A comprehensive inspection of an overseas property involves several types of checks. Structural inspections ensure the building is in good condition. A professional inspector will examine the property for any structural defects, including issues with the roof, walls, or foundations.
Technical inspections check the property’s utilities, such as electrical systems, plumbing and heating. These inspections can reveal any existing or potential issues that could lead to costly repairs in the future.
You can find chartered surveyors from the Royal Institution of Chartered Surveyors (RICS) practicing abroad. All chartered surveyors adhere to a strict level of professionalism, they will be impartial and fair. Your lawyer or estate agent may be able to refer you to a chartered surveyor who has worked with other international buyers.
There are alternatives. Some buyers employ a local builder or architect to check a property over. They are likely to spot obvious problems as well as offering a quote to put them right.
Apply for your tax identification number
This is a necessary step to becoming a property owner, amongst other things, in most countries. In Spain, this is known as your NIE, in Portugal your NIF and in Italy your Codice Fiscal.
In France, your lawyer will do this for you when they submit your visa application. For more information, speak to your independent lawyer or a financial advisor licenced in the country you’re moving to.
Open a local bank account.
Ideally, choose a branch that is local to your property (or area you plan to buy in) with staff that are experienced with dealing with English-speaking foreigners. Your estate agent will be able to point you in the right direction if you’re unsure where to start.
For more information about how currency transfer specialist Smart Currency Exchange could help you, download your free copy of The Property Buyer’s Guide to Currency.
