EXPLAINED: OVERSEAS PROPERTY
recommendation from someone other than the agent, the developer or the vendor. A good starting point is the Association of International Property Professionals (aipp.
org.uk), which has law fi rms as members.
Subsidised viewing trips You might imagine the old-style viewing trips — free fl ights and accommodation, wall-to-wall property viewings and piña coladas and the agent pinned to your side from the moment you step off the plane to the second you’re back on it again — are a thing of the past. Not so, according to Barrasford. “Plenty of agents still do them all over
the world. T ey get clients drunk, then get them to sign.” Barrasford has a rule on his viewing trips.
You can’t sign or buy anything until you are back home. “You don’t buy a car without seeing it. Why would you buy a foreign
Buying a new build home: Where does your money go?
Land costs Agent commissions Build costs Legal costs Developer’s contingency fund Marketing Note: Slices vary in size - developers will not reveal ratios
“You don’t buy a car without seeing it. Why would you buy a foreign property unseen? But people come abroad with a rose-tinted view, so we make sure they go home and refl ect before they make the decision to buy.”
property unseen? But people come abroad with a rose-tinted view, so we make sure they go home and refl ect before they make the decision to buy,” he says. Chris Mercer, director of the Murcia-
based agency Mercers, avoids subsidised trips “as we don’t like the implied obligation/ ownership, and neither do clients”. Taylor Wimpey still off er trips,
“but we see them more as business trips. You don’t need more than one night/two days. T at’s enough to see three or four developments. We pre-qualify clients in depth, and we leave them alone in the evenings”, says Pritchard. Wiggins from T e EcoHouse Group says
that many agents/developers no longer want to take the fi nancial risk of subsidising trips. “In the old days, the big guys, such as Parador and MacAnthony would have converted 80-100 per cent of buyers on trips. Now, if any product has holes in it, it will get found out.” When an agent has paid for your trip, he
or she will naturally want to dictate what you do, and don’t, see. T at means no rival properties or chances to fully explore the area, warts and all. “It’s generally better to see properties
under your own steam. But inspection trips are a good way of identifying properties that match your requirements if you don’t know the area and don’t have time to explore fully,” says Esders.
Post-crunch funding With banks reluctant to lend on new projects, developers need alternative approaches. Some can fi nance the project themselves — PGA Catalunya, near Girona, for example, or Taylor Wimpey’s projects in Mallorca, Costa del Sol and Costa Blanca, or Montenegro’s Sea Breeze project (see page 89) — so they don’t rely on sales to complete the project. Michael Hobbs, the owner of
Appassionata, which is selling fractions in two converted farmhouses in Le Marche (see page 43), says: “In this market, it’s the most credible and transparent way to work. A number of developments have recently ground to a halt, because of funding issues and unsuccessful off -plan selling.” If the entire construction is funded from
sales and deposits, the whole project is at risk if sales dry up. Developers may also invite investors to enter the project early for a discount, to obtain seed money to get the ball rolling. “Developers rely now on upfront
payments from off -plan sales more than before the crisis,” says Alice Watson-Smith from Fine & Country in Cannes. “T e larger and more established
developers still have the capacity to proceed on schedule, even if sales are slow. It is a very good reason to look closely at the developer’s record. Delivery date is very important to buyers, and the last thing a buyer needs is to
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