The fear of making mistakes can often take the fun out of buying property out of the country. Don’t we all dream of owning a vacation home in the topics? Is it so easy as it looks?
Imagine having piñas coladas and sushi while sitting on a white-sand beach in Costa Rica. Surfers are riding the waves and your kids are building a sand castle.
Would you like that dream to come true? As a 35-year veteran in Costa Rican real estate, I’ve seen quite a few shattered dreams. Property hunting https://www.american-european.net/costa-rica-real-estate-blog/costa-rica-real-estate-topics/the-property-hunting-process-in-costa-rica/ can be fun. But buying property out of the country can also result in a big mistake.
1.No mandatory licensing
Unless you’d want to purchase property FSBO in your city, you would probably just contact your favorite realtor there. Your favorite realtor will be licensed and will show lots of specialty abbreviations behind the name on her/his business card: like SRS, ABR, CRS, CIAS, CPM, CPRES, MRP.
In many countries around the world there is no mandatory licensing. That doesn’t mean the agents don’t know what they’re doing. Licensing doesn’t make a person honest either.
You just need to do your homework and find the right agent.
2.Not your language
When buying property out of the country, you might have problems communicating. People probably speak another language than you do. Hire an agent you can communicate with well, and one who understand the local customs and laws. But, don’t immediately trust someone because he/she speaks your language.
In many countries around the world, there is no registry that shows you the historic past of a property. Therefore, you cannot find out what a property sold for last time. There is also no way to find out what any houses in the neighborhood sold for. So there are no comps to count on.
Having no comps makes it even more important you find a trustworthy and knowledgeable agent.
In the United States, property is measured in square feet and in acres. In most countries in the world property is measured in hectares and square meters (m2). In some, the internal space of a house or a building is measure in cubic meters (m3).
How can you figure it all out? Oblige yourself to be diligent.
Often, you won’t find any financing for your property purchase. At home, your agent can pull your credit report and know what you can afford to pay. In other countries, they don’t know you. You’re a high risk for a lender, no matter how responsible you are.
You want to make sure to have at least 50% down payment and you might be able to find a property with owner financing.
Also, mortgage rates are often much higher than you are used to.
In the tropics, property maintenance cost might be quite different from what you are used to. There is a lot more sun and usually a lot more rain. Before you purchase, request a home inspection and ask the inspector about the cost of maintenance of the property.
Of course you will find other specific differences in doing business abroad. You might even enjoy a few of them! But now you have at least a few more tools to defend yourself and buying property out of the country is going to be much easier.
Ivo Henfling is a Dutch national, a resident of Costa Rica since 1980 and a real estate broker since 1994. He is the founder of The American European MLS in Costa Rica, which covers locations from coast to coast. Ivo has written over 1,000 articles about real estate and living in Costa Rica. You can reach him at firstname.lastname@example.org or visit https://www.american-european.net