Home abroad: how to buy and what to believe

16.10.2010 14:00
Home abroad: how to buy and what to believe

When young people today are asking what they dream in life, more and more often you can hear the answer that they would like to have your own house somewhere on the Cote d`Azur. Well, today this dream is quite possible to implement: Realtor agencies offer a wide selection of villas and apartments anywhere in the world, and experts give professional advice on how to act thoughtfully and to minimize risks when buying. Not so long ago the company IntermarkSavills jointly with Knight Frank conducted a seminar on this topic, entitled "Investing in foreign real estate: how to find and read the statistics correctly."

Late reaction

Buying a house or apartment abroad begins with searching for information about the country, offers real estate developers, real estate companies. Thanks to the World Wide Web make it easy: any search engine will return hundreds of website addresses on the topic that interests you, where you can learn about everything and everyone. But here is how this information is correct - is another question. Igor Indriksons, director of overseas property investment company IntermarkSavills, offers several ways to verify the information.

To begin with expert advice to learn to understand what kind of information on foreign real estate market is theoretically possible to collect, and what not. Suppose information about sales, about the rise or fall in prices on the real estate market, rental rates, terms and amount of the mortgage, the number of old and new housing - all can learn. That is, if your site has some company you`ll find mention of the fact that the volume of transactions in the real estate market one of the countries, for example, in 2009, grew by 50% and 30% of transactions were done through mortgage, no dirty tricks, rather everything about it. The fact that the inventory has the right to report on this, and banks provide overall statistics, so that the numbers are quite real (of course, some fraction of the error). Only need to pay attention to the information source and analyzed by the data.

Question is to expose other data, such as on sales or purchases on a national basis, about whether the transaction is an investment or purchase for themselves, on the volume of investment transactions, how many mortgage applications approved on a national basis. Often real estate agents call a specific number, how many properties in one country or another bought by Russians. The company, of course, can do it, but based only on their own experience, that is exactly how much it sold home our compatriots. Buyers should be aware that this is only a certain percentage and real estate market situation in general, such indices can not characterize. In addition, some even prefer to buy real estate directly, bypassing realtors, or enter into a transaction is not on private, as a legal entity. Also, get information from the inventory of how many Germans, British or Russian bought a country estate, it is impossible: such statistics simply non-existent.

Nor can it be said, the investment transaction was made or the square footage buyer purchased for personal use. All investors are still buying any "try on" just in case, if it does not, for example, sell a home or rent it.

Reporting on the real estate markets with a lag of less than two months to get too unrealistic. The fact that the registration of transactions in the inventory takes 3 to 6 months from date of purchase. Exceptions are only two countries - the United States and Britain, where the procedure lasts two months. So do not believe those companies that have already reported in August about how much real estate was purchased, for example, in Bulgaria or Cyprus in June.

For the real estate market in general is characterized by late reaction. That is, for a variety of economic changes and shocks the housing market usually reacts after six months. After this time the real estate begins to fall in price or increase in price. The man who lost jobs during the crisis, not trying to immediately sell the information available to it the second or third house, he first attempts to find work, save and spend only a few months later, in the case of the ongoing turmoil puts house up for sale.

A reasonable question arises: how all the above can help in buying a home abroad? It`s simple. If the messages on the site or reports of companies you come across information which in principle can not be, it`s likely the company will be cunning and in the future, when you become her client. You need it?

Each hill

For reliable information Igor Indriksons advised also to refer to large companies, do not lose sight of their sites. According to experts, these players typically spend 5 million euros per year for the maintenance of their own analytical department, which experts working daily with databases and analyze the situation on the real estate market not only for each country, but in all market segments.

In addition, the expert recommends that such an authoritative source of information, as www.globalpropertyguide.com. The resource is free. If you have the means, the information can be found on the site www.reutersrealestate.com (subscription it costs up to $ 1000 per year). Large same companies and millionaires use the resource DataStream. But the pleasure will cost 25 thousand euros per month.

Buying property abroad, it is worth remembering that neither the developer nor the realtor in this case are not your friends, as interested in selling the facility and make a profit. Truly your friend abroad, how would this advertising may seem, can only be a bank. "An indicator of liquidity and risk can serve as a test of the banking market assessment, - says Igor Indriksons. - There is a surefire way to calculate the liquidity facility - see figure LTV (percentage of debt to property value). If within a country bank agrees to marry a non-resident 80% of the borrowed funds for mortgages on real estate in the city center and on the coast, only 20%, the question arises: why? It`s very simple: banks are always nice evaluate markets, and if somewhere below the LTV, the banks believe the market is smaller. Objects which, in their opinion, it is impossible to implement quickly, they are less willing to finance. "

Thus, you can also check how much your property is really worth in real estate. Sometimes the price that asks the seller, is much higher than the market value of the property. The Bank will help to identify this difference, and you continue to be able to decide whether you should take risks and buy such an object.

Unfortunately, very often for some of our fellow citizens buying property abroad becomes a gamble. Of the two options, for example, buy an apartment, so that in emergency situations to lose as little money or buy an apartment in such a way to earn money for the acquisition of as much as possible, the Russians are choosing the second option, although the risk of losing everything all at the same time is very high: the building can be frozen, the developer would be a fraud, etc.

Another typical case is when a person acquires property with the intent to sell it in the future more and make a profit. It is known that during the construction phase to buy an apartment from the developer can much more cheaply. Some Koreans do just that and expect that on completion prices "squares" will increase, and by selling the purchased real estate, you can stay in the black. In fact, their expectations are not met. Indeed, after the new building is erected, property value increases. But the owner forgets that his apartment is now exposed as an object of the secondary market, therefore, estimated to cheaper ready-made and donated buildings. That is, buying apartments for 200 thousand euros, he will be able to sell them, likely for the same amount or a little more expensive.
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Content tags: Overseas property
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