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The Hidden Costs of Buying Properties Abroad

You can fund the purchase of a property abroad by arranging a mortgage through a UK lender, such as the Halifax, Abbey or Barclays. You can also release equity from your home in the UK or by arranging a mortgage in the country you are moving to.

Your main home will be at additional risk if you use it as security to raise finance. On the other hand borrowing money overseas also carrys a risk, especially if currency exchanges rates move against your own interests. Normally there will be no problem in finding a favourable mortgage for popular holiday destinations like Spain, but the choice of mortgages for farther flung locations may be more limited. We recommend that you consult a mortgage adviser, who
specialises in overseas locations.

A Note on Legal Fees
The fees payable over and above the purchase price varies dramatically between different countries, so it is extremely important to take account of these costs when considering your budget.

What to pay and when to pay it
Having found a property and had your offer accepted, you will have to lodge a non-refundable deposit, which is generally 10% of the agreed price. Check this out, as some countries like Portugal and Italy, require a third of the asking price in advance.

Never part with money until an initial contract has been agreed and even then make sure that the cash is lodged with a bonded estate agent or lawyer.
Italy is probably the most expensive country to purchase a property in, where the costs add up to a startling 16,500 pounds when purchasing a 100,000 pound property. This is made up of Estate Agent 3000 pounds. Legal Fees 1000 pounds.

Survey and other adminisration costs 1000 pounds and miscellaneous fees are an amazing 11,500 pounds. The latter includes land registry taxes, other notary fees and transfer taxes. Turkey was the cheapest country we found. Here the total cost over and above the purchase price was 7000 pounds, which breaks down as follows Estate Agent 3000 pounds. Legal fees 1000 pounds. Other fees amount to 3000 pounds.

Get the experts in
Different countries have different property laws and regulations, so it's important that you find a good, fluent English-speaking solicitor who is not connected to your seller, estate agent or property developer. They should be used to dealing with overseas purchasers and go through all the possible fees, taxes, insurance issues, local authority rules and any possible pitfalls. The laws and procedures involved with every aspect of the house buying process are often different to British laws, so make sure the local knowledge of your solicitor is excellent.

If you have bought a plot of land and are having a property built make sure all planning permissions are covered and find a good architect. Again, the tourist office can help. If you think the service you are receiving is unsatisfactory, say so and explain if things do not improve you will go elsewhere.
Make an offer

Once you have found your ideal home, set a maximum price you will pay and don not go over it. After your offer is accepted and you have instructed solicitors make sure you keep tabs on them and the estate agents. Ask for regular updates and make sure you fulfil all the requests made of you promptly.

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