In the end, property — whether it’s a house or land — will always have some kind of value. The biggest risk is in you missing out and not having the right people to help you do things the right way. Invest wisely and be safe. This is how.
Getting the Right Price
Simply put, unless you are very familiar with the real estate market in Cyprus, you may get ripped off when trying to invest in property. Do not jump at the first deal you come across, no matter how good it may seem, until you have conducted a thorough investigation of the conditions and physical attributes of the property. It is best for you to engage the services of a regulated and experienced professional, who will be able to act on your behalf and report accordingly. Agents often significantly increase and inflate the asking price based on the passport of the investor with significant variances amongst nationalities. Local agents normally don’t post prices at all, preferring to assess the client and then price the house according to what they believe the client can pay. In some cases, they may not even convey your offer if they think you can afford to pay more.
Accept that the burden is on you to understand what properties are worth. This means you’ll need to work with several different real estate agents or sellers and look at as many different properties for sale as possible. Keep a record of each property you see and break down the cost in each case into euros per square meter. After looking at a handful, you’ll begin to see the averages and the outliers. Also looking into RICS (the Royal Institute of Chartered Surveyors) quarterly market analysis reports will give an indication of valuation prices per city.
In Cyprus, there is usually no multiple listing service. This is what we here at Cylanders are trying to establish. Buying real estate in the United States for example is a straightforward, transparent and efficient undertaking thanks to the multiple listing service. You can search and compare for exactly the kind of property you’re looking for and see every home on the market that fits your specifications no matter where the home is listed and from whom. As a result, you can work with a single agent that you like and trust and still have access to the entire market. Cyprus is completely the opposite and thus transparency in the market has been proven to be nonexistent.
In markets with no Multiple Listing Service (MLS), you need to go to several different agents to see everything that’s out there meeting your criteria. This is time consuming and can be tedious. You can’t just pick a good agent and see everything. We are changing this! One platform, one search. All market availability.
Physical attributes of the building – Quality issues
When Investors are keen in buying existing property that is of a certain age, it is imperative to conduct a site visit and survey to check the structural stability and physical attributes of the building that might significantly impact the investment required to bring the building up-to-standard
Title Deeds – Actual ownership
Potential investors are advised to exercise extreme caution when buying property, especially if the title deed is not readily available, a scenario which is all too common when purchasing new property in Cyprus. For your own protection, property to be purchased must not be the subject of an ownership dispute. Such scenarios can generally be avoided by purchasing property from a reputable developer and doing background checks with the Land registry Dept.
Hidden Fees – Failure to consider all relevant costs
Potential investors are advised to exercise extreme caution when buying property, especially if the title deed is not readily available, a scenario which is all too common when purchasing new property in Cyprus. For your own protection, property to be purchased must not be the subject of an ownership dispute. Such scenarios can generally be avoided by purchasing property from a reputable developer and doing background checks with the Land registry Dept.
Signing contract of sale without undertaking due diligence
Lawyers are not required to conduct due diligence unless instructed so, i.e a mortgage check. In 2011 the government introduced a specific performance law to provide a contract of sale precedence over any pre-existing mortgage; however, a check should be undertaken to examine whether any mortgages have been placed on the land before purchase to avoid serious and disastrous implications. A contract of sale cannot be properly drawn up without considering the results of these searches. Furthermore, investors are advised not to rely on developers or agents to conduct due diligence even if they provide official extracts from the Land Registry and other government departments. Independent advise must be sought to mitigate this risk.
Failure to put everything in writing and submit to the Land Registry Dept.
Investors are recommended to ensure that all points negotiated are set out in the contract of sale. This includes an inventory of any necessary repairs or damages. Also, the contract of sale must be deposited with the Land Registry within the timeframe specified by law. The purchaser will lose important legal rights if this is not done. Further, a contract of sale must be stamped within the timeframe specified by law, otherwise the purchaser will be liable to pay penalties.
Transparency and Trust
Beware developers and the hard sell – don’t succumb to heavy pressure to sign up with a deposit before you’ve had a chance to think carefully and get independent advice! Also, you can’t take for granted that every real estate agent you encounter in Cyprus is a licensed, trained professional. Make sure you work only with agents who have a genuine business or are employed by a business. A good rule of thumb is that if the agent doesn’t have an office, a website or a car to drive you around in, he’s not a professional and has no liability. This advice might seem obvious. But in some places around the world, when the sun is shining and the zivania is flowing, it can be easy to forget the fundamentals.
Currency Risk
The bottom line here is that when buying a property overseas where the contract is written in a currency other than your home currency, especially when a currency fluctuates a lot, having a hedge to take that risk away makes a lot of sense. There are many ways to do this, but the simplest and easiest is working with our affiliates TFI Markets https://tfimarkets.com to fix the currency for you and the transaction amount.