How to Successfully Buy Overseas Preconstruction Homes

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This article explores the advantages of buying preconstruction homes overseas, the risks involved and some precautions to take.

The Advantages of Buying Preconstruction Homes

Buying preconstruction homes definitely offer great advantages. First you get to CHOOSE! You don't just settle for any kind of property; you can select design features and specifications. You can actually be involved in the design of your new investment. If you're a property specialist, you will be able to tweak some features and make the home desirable to prospective tenants.

Also, these kinds of properties offer the best deals. You get the lowest deals on pre-construction homes within the first two weeks of the project's launching. Buying a preconstruction home also means that you don't have to worry about repairs and maintenance. You may not have to perform renovation on a new home for the next five years.

Buying Preconstruction Homes Overseas Is Risky

Just as they offer great rewards, buying pre-construction real estate overseas can quickly turn out to be a sour deal. Hence these investments require foresight, research and an ability to think and make deductions like an investor rather than the average buyer. You should be able to determine where the neighborhood is heading in the near future and also make a comparison of project options within your budget constraints.

The biggest risk behind pre-construction houses is that it's a non-liquid investment. For the period in which the property is being built, which can be two to four years, in the case of condo units, you freeze up a large chunk of capital. Although you might have access to visual representations or projections, you're practically buying an invisible property. You've not seen the finishes or the outward finishes.

These properties also require more down-payment requirements than their resale counterparts and you can't touch your cash or pull out should you need your money. So, it is a risky proposition. How do you protect your investment in this case?

Rules To Follow When Buying Preconstruction Homes Overseas

1. Never pay the full price upfront on a pre-construction property. It's standard to pay 30% of the cost during construction and the rest on completion. You should pay the balance when the property is move-in ready and when you can transfer the title to your name.

2. Check the specification. Do not leave this to the developer. The more detail you add to your contract, the more likely you are to get what you expect. Detail all. Start with the exact size of the home, broken down by rooms and hallways, patios, balconies and storage space.

3. Time. Get a clear deadline for the completion and delivery of the property. Most developers do not finish as scheduled. But do not allow the developer to add a 12-month overload period and go scot-free. He should have to pay a fine if he’s unreasonably late.

4. Make sure you are covered if something goes wrong. The contract should give you a decent time frame for snag-checking, and outline what type of builder's warranty you get. Be sure to include a clause that covers what kind of steps you will take if you cannot resolve a problem with the developer, be it mediation with a trade body, arbitration or a lawsuit. In some countries, if the developer doesn’t complete the property, you will get some of your money. That is not the norm, though.

Buying pre-construction property can be very profitable when you’re in the right market. These rules will help put you on the right track for a successful purchase.

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6 reasons to use a real estate agent when buying a home anywhere

  • 07, October 2023

Buying overseas real estate often comes with increased responsibilities. Hence you need an efficient local real estate agent

 

While you might be a real estate guru in your home country, buying real estate in a foreign country can get messy without a knowledgeable local real estate agents

 

Here are just three ways things could go wrong when buying overseas property:

 

Over-the-top valuations: A foreign buyer probably doesn't have the stats on comps and recent sales that would help him make the best decisions on pricing. Locals might see this as a chance to price the property above market value. Without an agent on your side and banking on exchange rate advantages, sellers might feel justified to charge you more.

 

Taxes and paperwork omissions: In countries like Spain where there could be local rules and taxes regarding foreign home ownership, it's easy to ignore a few details. Not having the necessary licenses and permissions can be very costly.

 

Lopsided Communication: Sure your developer wants to come to terms quickly, which you find appealing as you don't want to hang around too long. However, you don't want to sign any form or contract without understanding what it entails. It's always important to get expert advice before signing on the dotted line.

 

You should have two people on your side when buying foreign real estate, a lawyer, to help with legal complications, taxes and paperwork and a real estate agent to guide you through the home buying process. You might want to ignore an agent's services as a way to save on agent charges. But here are six reasons why hiring a real estate agent for foreign property purchases is vital:

 

1. Full access to the market: Buyers in North America who work with agents have a full access to the Multiple Listing Service (A service that offers access to information regarding market value, comps and properties on the market). While some countries do not have a property listing service, a good agent will likely have a slew of properties and connections with other agents. This ensures he can secure a property that fits your criteria.

 

2. Detect overpriced properties: Where there is no MLS to set pricing, sellers and their agent often pad the asking price on their properties. Especially when the buyer has no agent on their side. Even in countries with MLS, ignorance can be a justification for an agent to charge you up to 40% above asking price. You can take advantage of an agent's market knowledge in this case. An agent has comps and data coupled with market experience and should be able to tell you instantly when a property is overpriced. However, do not neglect to do your own research about properties that catch your fancy. This will help you keep unethical agents in check.

 

3. Help with securing mortgage: One of the risky aspects of buying property abroad is getting financing. When considering going for a mortgage, your real estate agent can give you the low-down on mortgages for foreigners. He or she might also be able to connect you with bankers. An agent can also facilitate your loan by helping you with the necessary paperwork. This is one major reason why the services of a real estate agent are invaluable when you're buying a house overseas.

 

4. Negotiating and drawing up an offer: Negotiating tactics you have mastered in the US might fail to work when negotiating with sellers in Japan. The reason is that there are culture and language differences which can be difficult to fathom. So instead of trying confrontation or hard sell tactics, it is usually best to hire a professional agent who understands your situation and can persuasively represent this to a seller.

 

5. Help with finding good deals: You're probably trying to scoop up a good deal on a property. However, it's unlikely you'll find great deals by driving around a neighborhood. Agents have connections with other agents and access to a lot of properties. Hence it's much easier to find great deals by working with them.

 

6. Recommend trusted professionals: A trusted real estate agent would probably have a number of reputable service professionals in his network from inspectors, lawyers, handymen, mortgage lenders etc... This would be highly beneficial since you have little experience in the neighborhood and might be susceptible to pseudo professionals.

 

Caveat: When choosing agents to work with, work with vetted professionals. Don't just go with the agent down the street as that might turn out costly. This is why we periodically recommend agents in select communities who are vetted and have significant market experience to make your foreign property dream come true.

By Bebuzee Admin Read More
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Home Values Will Decrease, Making It More Affordable for Buyers

  • 09, January 2024

Home values are decreasing, making it an ideal time for buyers to invest in real estate. This article explores the reasons behind the decline in home values and what it means for buyers.

Introduction

The real estate market has seen a significant decline in home values over the past few years. This trend is a result of several factors, including the pandemic, economic downturn, and changing demographics. The decline in home values is good news for buyers as it makes homes more affordable, and they can now get more value for their money. In this article, we will explore the reasons behind the decrease in home values and what it means for potential buyers.

Why Are Home Values Decreasing?

Several factors have contributed to the decline in home values. Here are some of the most significant ones:

Economic Downturn

The economic downturn caused by the pandemic has had a severe impact on the real estate market. The job losses and business closures have resulted in a decrease in demand for homes, which has led to a decline in prices.

Changing Demographics

Changing demographics have also played a significant role in the decrease in home values. Millennials, who make up a significant portion of the home-buying population, are delaying homeownership due to financial constraints. Additionally, baby boomers, who make up a significant portion of homeowners, are downsizing and selling their homes.

Oversupply of Homes

Another factor contributing to the decrease in home values is the oversupply of homes. Home builders have been constructing more homes than the demand, leading to a surplus of inventory. This has given buyers more options and bargaining power, which has resulted in lower prices.

What Does It Mean for Buyers?

The decrease in home values is excellent news for buyers as it makes homeownership more accessible and affordable. Here are some ways in which it benefits potential buyers:

More Value for Money

Lower home values mean that buyers can get more value for their money. They can purchase a more significant property for the same price or buy a property in a more desirable location that was previously out of reach.

More Options

The oversupply of homes has given buyers more options to choose from. They can now take their time and select the home that meets their requirements without feeling rushed.

Bargaining Power

Buyers now have more bargaining power as there is less competition for homes. They can negotiate a better price or ask for additional concessions such as repairs, closing costs, or upgrades.

The Pros and Cons of Buying During a Market Downturn

While there are several advantages to buying during a market downturn, there are also some disadvantages to consider. Here are some of the pros and cons of buying during a market downturn:

Pros

  • Lower home prices
  • More value for money
  • More bargaining power
  • More options to choose from

Cons

  • Potentially lower quality homes
  • Potentially higher repair costs
  • Limited financing options
  • Uncertainty about the future of the market

 

FAQs

Q1. How long will the decrease in home values last?

A1. It is challenging to predict the length of the market downturn. Still, experts believe that the decrease in home values may continue for a few more years until the market stabilizes.

Q2. Should I wait for home values to decrease further before buying?

A2. It is challenging to time the market, and waiting for further decreases in home values may not be worth the risk. You should consider your financial situation, long-term goals, and personal preferences before making a decision.

Q3. Will I get a good return on investment if I buy a home now?

A3. The answer to this question depends on several factors, including the current state of the real estate market in your area, the condition and location of the property you're considering, and your long-term plans. In general, if you buy a home in an area with a strong real estate market, and the property is in good condition and a desirable location, you may see a good return on your investment over time. However, it's essential to consider your long-term plans and the costs associated with owning a home before making a decision.

By Bebuzee Admin Read More
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5 Home Staging Tips to Make Your Kitchen Look Amazing

  • 18, September 2023

The kitchen is the heart of the home. There will never be a day in your life when you don't enter the kitchen for some reason. It is where groceries go in and delicious pizzas and finger licking butter chicken comes out. The kitchen is where the children first learn to be of some service. It's also where you hone your cooking skills by trying new recipes.

 

The design of the modern kitchen has created an evolution in function that has made the kitchen a place of entertainment. An open kitchen is a place for socializing and hanging out with friends and families. This helps families spend more time together. You can keep an eye on your daughter while you cook. Your spouse can perch herself on the counter and regale you with tales from her workplace, you can share a bottle of wine with your friends as you cook.

 

Being such an important part of the home, it's important that home sellers make the kitchen attractive to prospective buyers. Here are some home staging tips to make your kitchen spark more attention from prospective buyers.

 

You want to make your kitchen radiate a fresh 'feel'. Buyers should want to stay a while longer in your kitchen. Although the process of staging your kitchen may warrant a few inconveniences, it's usually worth it because an attractive kitchen will sell your home faster than any other thing you do to prepare your home.

 

1. Make it sparkling clean. Obviously, buyers won't be able to imagine themselves in your home if your home has a dirty kitchen. The neater your kitchen looks, the better. From kitchen windows, to rugs, to stoves and dishes, make sure that everything shines. Hiring a professional cleaning company might be worth the cost.

 

2. Apply fresh paint. A quick and easy way to make your kitchen appear fresh is putting fresh paint on walls. Let the colors used complement colors of cabinets and drawers to bring out cohesiveness.

 

3. Use energy efficient lighting. Another relatively inexpensive tweak to make your kitchen feel fresh and new is updating lighting with energy efficient and bright ones.

 

4. Update kitchen hardware. Buyers love a kitchen with updated fixtures. Don't leave your kitchen with old kitchen faucets and outdated lighting fixtures. Inexpensive, simple updates like garbage disposal, stainless steel appliances, faucets and cabinet hardware can make your kitchen appear new and attractive to prospective buyers. You can also go a step further by adding some pizazz to your countertops. You can put in decorative canisters, herbs, bowl of fruit, new cookbooks and new tea towels, etc.

 

5. Declutter. Decluttering may be the hardest part of staging a kitchen for sale. Your kitchen should no longer reflect you, but it should give potential buyers a chance to use their imagination. The easiest way to start the process of decluttering is to completely clear off your counters, then only put selected decorative items to fill in and soften the corners of a long expanse of countertop.

An ugly kitchen can make the home sit on the market for long. Staging your kitchen right might require some effort and inconvenience but if the property is priced right and looks fantastic, you should only have to be inconvenienced a very short time.

By Bebuzee Admin Read More