You can still search online for properties in other countries, but you won’t necessarily find everything that’s available and you won’t see a record of comparable sales, says McClain.
“A lot of people choose a place for a vacation or retirement home in a fit of ‘Margarita Madness,’ ” says Mike Cobb, CEO of ECI Development, a developer of residential real estate in Central and South America who is based in Shepherdstown, W.Va. “They get off a cruise ship for an afternoon and the next you know, they’ve bought a condo. That’s like meeting someone and marrying them that same day in Las Vegas.”
A better approach to buying overseas is to treat it like getting married, says Cobb.
“You need to date the place for a while and get engaged before you decide you want to marry it,” says Cobb. “I recommend staying somewhere for three to four days at least to rule it in or out and then renting a place for three or four months if you’re serious about it.”
Familiarity breeds a purchase
For many buyers, where to buy is obvious.
“We went to Naxos, this tiny island in Greece, for vacation for years and eventually bought a little place there,” says Erika Berry, a teacher at Sidwell Friends School in Washington, about the purchase made with her husband, Curtiss Kolodney, who owns a computer services business. “There’s something nice about having a key to your own house and being able to keep your things there.” The couple worked with one of the island’s only real estate agents and paid about $59,887 for a 400-square-foot condo about five years ago.
“We’ve stayed on Milos, an even smaller island, at a family-owned hotel, and we’re looking for a place there through word-of-mouth since there’s no real estate agent there,” says Berry.
“People want to know whether they are making a safe and good investment even if it’s a vacation home or a retirement home,” says Maria Contos, a real estate agent with TTR Sotheby’s International Realty.
These websites tend to be organized by country and provide you with basic information about home types and visa restrictions.
The American system of real estate agents representing buyers and sellers is uncommon elsewhere in the world. Whether you can find a locally licensed real estate agent to help you depends on the country and where you want to buy. In more rural areas and locations with few expats, you’re less likely to find an agent.
“It helps to work with a real estate company with a global reach such as Sotheby’s International Realty,” says Contos. “We have 884 offices around the world so when someone asks me for help I can usually connect them with someone.”
Christie’s International Real Estate also has offices worldwide. Another way to find a home is to type “newly built houses and condos” and the name of the country or region into a search engine online. Residential developers often advertise online, but be wary.
“People do get burned sometimes and pay a 50 percent deposit for a house under construction that never gets built,” warns McClain. “You need to put in the time to research a builder and to protect your investment with the help of a lawyer.”
Know the law
Buying a home overseas means knowing that country’s foreign ownership rules as well as its visa requirements.
“Outside the U.S., you need to do more due diligence and hire a local attorney to make sure you comply with all regulations,” says McClain.
McClain recommends buying property in places that are governed by British common law as part of the Commonwealth since their rules are similar to American law.
ECI’s Cobb says some countries have areas where special approval is required. Others restrict the amount of land you can own.
Mexico is one such country. Its security zone, which covers anything 31 miles from the coast or 62 miles from the country’s land borders, requires foreigners to take possession of the property in a bank trust, says Cobb.
“In Honduras, foreigners can’t buy more than 1.5 acres of land along the coastline,” says Cobb. “You can buy a condo or a small lot, though.”
An American agent experienced with international buying can explain the visa process and regulations as well as recommend local lawyers and accountants, says Contos
“In some countries, such as Portugal, Spain and Greece, you need to make an investment of at least $250,000 to obtain a resident visa,” says Contos.
Once you’ve identified a country or a region where you’d like to buy, Cobb suggests doing a detailed analysis of your priorities.
“It’s important to think about things that are relevant to your happiness, especially if you plan to retire overseas,” he says. “Do you want to be near a beach? Even if you do, you need to think about the type of beach. The Pacific has bigger waves, but the Caribbean has that clear blue water. Do you like hot and humid weather or hot and dry weather? Or do you want to be in the tropical highlands where it’s always in the 60s at night and 70s or 80s in the daytime?”
Cobb recommends thinking about whether you want access to cultural amenities or outdoor activities as well as things like how close you want to be to a grocery or an English-speaking church.
Think about protection
If you plan only occasional visits to your property, part of your search criteria should include how your home will be protected from natural disasters, burst pipes and theft as well as generally maintained in your absence.
“Concern about maintenance, the security of your property and the danger of natural disasters should be addressed when you are deciding where to buy,” says Cobb. “That’s why it’s so important to take your time and find out what could happen and how you can protect yourself and your property.”
Buying in a managed community with housekeeping, maintenance, utility bills and landscaping taken care of can give you peace of mind, says McClain.
“Living overseas is a romantic notion that works well if you have a boatload of money to handle anything that comes up,” says Berry. “If you don’t have a lot of money — and we don’t — be prepared for some surprises. Know what you’re getting into culturally and look at it as an adventure and you can have a great experience.”
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