15 January 2014

Posted by Discount Insurance on Wednesday, January 15, 2014 No comments
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As freezing temperatures take over much of Britain, buying a place in the sun can be tempting, but it’s essential to do your homework first. Here’s our guide to avoid being ripped-off when purchasing a holiday home.

Research the property

David Nicholls, managing director at UKForex says it is important to think deeply about all the little details, “even down to everyday considerations such as the distance of the nearest supermarket”.

Ideally visiting the same place a number of times before making a committed decision to buy is recommended. By doing so, you get an idea of any potential problems which could push down the price in the future. For example, in Spain, be wary of buying a home in a half-finished development due to the current economic struggle there.

According to Paul Rodwell of the British Consul in Alicante, Spain, an estimated 4,000 British-owned properties are currently affected by the economic problems. Some were built without the correct permissions or by building firms that have now gone bust.

The best way to go about a purchase is to request references from previous customers and past developments - to identify any potential issues that may have occurred.

Also we advise getting a valuation done to identify issues such as subsidence, damp, wiring defects and boundary disputes.

Find a good estate agent

Buying through a reputable local agent is a good way to avoid the pitfalls that come from being unfamiliar with the local market.

“If possible, get a first-hand recommendation by talking to friends who have bought property in the same area,” advised Mr Nichols.

However, you should never make assumptions and always make sure you get a second and even third opinion. Buyers can seek help from a variety of independent professionals such as lawyers, surveyors, architects and even neighbours to get more information about the area and property you are purchasing.

Getting advice and recommendations from friends is always good, but also ensures you get some references.

Be prepared for local differences

Even if you are experienced in property transactions in the UK, you may find business is conducted slightly differently depending on where you are buying.

“Italy is one country famous for its red tape, so anyone buying there will require a technical expert to examine all the paperwork involved,” said Mr Nicholls.

Mr Rodwell added: “When you are considering purchasing a property, check who owns the land if there are any restrictions placed on current buildings or proposals for new builds.

“It is also worth finding out what licenses, permissions and planning consents are required, and where you need to go to get them”.

Find a good lawyer

The language difference makes it essential to find a good independent lawyer, who speaks fluent English and can guide you through foreign legal proceedings.

“Experienced buyers warn against going on an estate agent or developer’s recommendation when choosing a property lawyer, to avoid any risk of split loyalties,” said Mr Nicholls.

Consular staff cannot provide translation services or offer legal advice, but can provide you with a list of lawyers or translators that you can use.

It is also vital to read up on basic proceedings, so that you can spot any potential issues.

Set your budget sensibly

When buying abroad, there may be hidden costs in terms of legal fees, property taxes and fees for being a non-resident property owner.

Buyers may even need to pay a larger deposit for a foreign mortgage than if they borrow from a UK bank.

Mr Rodwell says: “Once you have decided to enter into a contract you will need to think about the terms and conditions you are entering into, how much deposit is required and under what circumstances this is refundable.”

“You should also take into account any mortgage and finance agreement and look at ‘opt-out’ clauses and the implications of these – never sign something that you do not understand.”

We recommend before putting a deposit down, the buyer clarifies what this entitles them to, as well as any legal conditions surrounding this. It is always important to get a receipt and bank guarantee for your purchase.

Discount Insurance offers highly competitive rates on comprehensive cover for your holiday home, call us today to see how much you could save. 
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