Take Heed of These 5 Things When Buying Property in France as a Foreigner

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With delightful sights and enticing cuisine, it's no wonder France is at the top of the list for many tourists. And not only tourists, people who are banking on profiting from these fascinations are snapping up properties fast too. France also boasts collections from masters of both modern and contemporary art.

However, if you're looking to buy a home in France as a foreign investor, don't be distracted by the sights. It's easy to be carried away by the beaches of Riveira, wandering through the battlefields of Normandy or viewing castles along the French countryside. You will need to focus your efforts on getting the deal done right. Let’s consider some stats on French property prices.

Facts about property prices in France

Prices are competitive and mortgage rates are currently low in France, according to Notaires de France. In the past year, over 900,000 properties have changed hands. Even though a surprisingly large number of these properties (90%) were bought by people looking to live in, rather than let. For investors, this means there hasn't been a property bubble and this might just be the right time to buy a house in France. Price is increasing steadily. Notaires de France estimated a year on year increase of 1.2% in property prices by August of this year and a jump of 4% in property prices by the end of the year.

What to know when buying property in France

Although the process of buying property in France is fairly straightforward, here are some things you need to know:

1. You're not required to hire a solicitor. As a general rule, buying property in France must proceed without an advocator or solicitor. It can't be delegated. So you have to travel and spend time and effort on acquiring the property.  Although property buying and land registration in France are secure, you need to have your wits about you.

2. You should learn French. If buying a house in France, you should know French or at least hire a translator. Trying to infer what the other person is saying will only give you a false sense of security. On the other hand, a knowledge of the language will bolster your confidence.

3. The notaire will not verify everything. The notaire may not be able to tell you if the property would give good ROI or what liens are currently on the property. There is room for you to do your own research about the property and about prices in that neighborhood. It's also advisable to get a specialist property lawyer.

4. Estate agents mostly act for the seller. Take care to read through any written offer. Make sure that the content of the offer are subject to a written sales and purchase offer. Also make sure you read through the content of the sales and purchase offer prepared by the agent to ensure equity. As with buying property anywhere, take your time before signing on the dotted line.

5. Local mortgages can be favorable. You might want to consider buying with a French mortgage as mortgages in France are relatively cheap. If you'll be seeking a mortgage, it's important you throw in a conditional clause in the sale contract.

In conclusion, having your own notaire is advisable. Don't expect the notaire working for both seller and buyer to seek your best interest.

 

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3 Tips to Secure Financing for Foreign Property as a Boomerang Home Buyer in the US

  • 07, July 2023

Buyers with a foreclosure history have more to prove to the banks; hence getting loans might be tough. Below tips will help them get through the hurdles and secure financing for foreign property investment.

Are banks scared to give loans to boomerang buyers?

Applying for a loan after a foreclosure, if you're a property buyer in the US, is not a piece of cake. The lender wants to be sure of one thing: You are able to pay the loan and have learnt from your mistakes. If you're planning to buy a foreign property, getting financing becomes harder. If you do get financing, you might be immersed in a lot of paperwork.

Banks will want you to prove your income. They will look closely at your bill payment records after the foreclosure (hence the need to rebuild your credit). If you have a traditional job for which you receive a W-2 form, your lender will want to see it and verify your income with your employer. Boomerang buyers (property buyers with a foreclosure history) who work several part time jobs or are self-employed will face more scrutiny. They will have to show their income with several years of tax returns and other documents.

Yes, you might have a lot to prove to the bank when applying for mortgage as a boomerang buyer. This is why Realtor.com recommends including a letter in your mortgage application that explains the reason for foreclosure.

What Most Foreign Banks Require Before Giving Mortgage

Requirements for mortgages will vary from country to country as each country flaunt different taxation structures. Some countries will require you to open a bank account, get a tax identification number or get approval from Government housing agencies before you'd be allowed to buy a home.

You need to be conversant with the taxes that apply in your destination country. For example, foreign property buyers in Spain have to pay a wealth tax (patrimono in Spanish). Countries like South Africa also mandate a building insurance for foreign buyers.

The important thing when applying for a mortgage either as a buyer with foreclosure history or not is your ability to document everything. Mortgage has come a long way from the crisis periods and banks are more proactive. They want to verify any financial information provided.

 

 

Tips To Secure Financing for Foreign Property Investment after Foreclosure

Having a foreclosure history shouldn’t stop you from your dream of owning property abroad, here are three tips to get financing as a boomerang buyer.

1. Get equity from your US home.

Your friendliest partner will always be your property of the United States. You could get a second mortgage with 2.8% APR, only a fraction of what you will pay overseas

2. Home Collateral.

If you own a property in the United States, lenders in some countries, particularly international banks, will allow you to put that into collateral. You will have to establish that the property is free from liens. A lien will be dissuasive to the approval of your mortgage application.

3. Focus on International Banks.

When you begin to explore your financing options abroad, you must first visit the branches of foreign banks in the area where you are buying. If the same bank operates in the United States, they will have a better understanding and access to the facts related to your financial situation back home. You can even visit their branches in the United States to know your options.

These options would be effective if you work on your credit. You need to improve your credit rating when applying for a mortgage in the United States after foreclosure. The same is true anywhere in the world.

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Buy a Home Abroad Why You Need a Local Realtor

  • 10, March 2023

Information is power, especially when it comes to real estate investing on foreign soil. You have to know the area, the schools around, transport, new developments planned and real estate laws that apply. Staying ahead therefore means you have to do considerable research. However you look at it, you’ll find that having a local realtor is still the best way to get important information you need. Here are five things a local real estate agent will help you with if you wish to buy a home abroad.

1.     Local pricing.

The important thing with buying or selling real estate is price. How do you assess the ‘fair’ value of a property in another location? You have to rely on data from comparable properties. The price of a similar property in the next town may be lower than the price in your current city, for example. Real estate agents have access to such data, given their access to the MLS and can help you determine if what you’re paying for a property is ‘fair’.

 

2.     Get pre-approved for mortgage.

Sellers give more preference to pre-approved buyers and you might be able to lock in a favorable rate with your bank. You need an agent’s help when getting pre-approved for mortgage. They have gone through the process many times before and can be of invaluable help.

 

3.     Help find catalysts.

One sign that an area is coming up and that will be desirable in the future is the development of new infrastructures. When you see new roads and built schools, it is a sign that the community is ready for growth. Investing in a growing community can be very profitable.(check how to spot a developing market). In addition, certain types of development, such as new shopping malls, can be extremely attractive to home buyers, and can also help keep the tax base low. Real estate agents have a general idea of ??what new projects are about to take off.

 

4.     Explore low-tax alternatives

 

If there are two cities side by side - one with high property taxes (or the progressive increase in property taxes) and the other with low property taxes - the one with the lowest taxes will usually be more in demand.

 

Real estate agents can help you determine which areas have the best and worst tax structures. Also look to see if a revaluation is set to take place in the near future as it may mean that property taxes are about to rise.

 

5.     Check school rankings.

Almost all states rank their schools for how well students in each district benefit from math and English tests. Sharp investors should look for schools that are moving up or are at the top of the list. These areas are often desirable for parents. Access to quality education is a great selling point for new home buyers. Agents have access to this information.

 

The bottom line: Doing your homework, getting free information and putting in the leg work alone might not do the job. A local real estate agent is an invaluable resource when looking to buy property abroad. 

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Buying a Property Abroad Tips for Investors Entering the Foreign Property Market for the First Time

  • 01, June 2023

It's easy to see why many people dream of buying a property abroad. You can retire on a sea front property or a beach house on one of the popular European costs. Some people have a lifetime dream of living in an alluring resort villa abroad.

As a traveler, it's easy to fall in love with a particular place so much that you develop an ambition to buy a house or an apartment there. If your job requires travelling a lot and you have the means and the courage to buy a property in one of the cities you frequent, why not? This would be a home you can return to on your next business trip.

You can also make a living off renting out foreign property. If you have an investment unit in a tourist location, you'll be getting big returns. This becomes more profitable as currency exchange rates tip in your favor. Exploring foreign housing opportunities is good but here are some things to consider if you're going in for the first time.

Factors You Need To Consider When Buying a Property abroad

1. Purpose of Purchase and exit strategy.

Why are you buying property abroad? Whether you're buying to live in it, for future retirement, for a family member who might be living or working there, perhaps to rent out or to resell at a higher rate, going in with a clear purpose will give you direction and keep things in perspective.

Having an exit strategy is also important. If things don't go as planned, what are the prospects of selling? Knowing your exit strategy before you make a purchase is key. You need to check the attractiveness of the location and the expected demand for housing as well as any renting or selling restriction on foreign property.

2. Growth prospects of the location's economy

You'll want to purchase a house that is situated where there are flourishing businesses or there are forthcoming growth potentials.

3. Land Regulations.

Unlike the purchase of local property, buying a house abroad is not so simple. This is because the laws of foreign ownership differ from country to country. Foreign buyers tend to have more hoops to jump through the purchase of land and face a more complicated buying process.

 

 

4. Potential Property Performance.

Any person buying a property abroad expects to earn from their investment. Before signing any agreement, be sure to ask for evidence to substantiate the projected returns, either through supporting investment reports or external surveys from credible sources.

Tips for New Foreign Property Buyers

1. Thoroughly research the market.

Although global trends in property prices occur, real estate markets in different countries will likely go through separate cycles of rise and falls. If real estate values ??are increasing in London, that doesn’t mean that they are also increasing in Italy or Spain. For those who buy to invest, it is important to pay attention to these trends - the ideal is to buy near the bottom and sell close to the top of a cycle.

2. Use a real estate agent.

Buying directly from an owner can sometimes be a big deal. However, if you are not familiar with the foreign real estate market or struggle with the local language, buying through a real estate agent or a reputable real estate developer can provide a useful guide and help you avoid a number of pitfalls.

3. Have your documents translated.

Before signing any documents related to a potential purchase, make sure that you have translated them professionally. It is essential that you understand any document you will be signing.

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