We help people who want to move to Cyprus and buy a home avoid the anxiety and do their property investment in Cyprus safe and worry-free. In this article, we refer to 5 common mistakes people who buy property in Cyprus make and how to avoid them.
Mistake no.1 when buying property in Cyprus
Not getting independent legal advice before putting up an offer/ paying deposit
Many first time buyers in Cyprus find a home from the website of an estate agent or a developer and pay deposit for a property they like, acting on the advice of the estate agent or developer without getting independent lawyer advice. They may in fact be pushed by the estate agent or developer into making an offer or giving a downpayment because ‘another very interested purchaser is having a viewing in the next day’ or is making an offer on the property on that day.
As a result interested buyers of property in Cyprus may pay extravagant deposits, get very little time for the property to be off the market under the deposit they paid, which will not be enough for them to comfortably transfer money to Cyprus to make the next payments, and they may pay deposit based on ‘reservation’ agreements that do not protect them. In situations such as these, buyers may face a lot of stress in proceeding with the purchase and may be left losing both the property they chose and their deposit money.
What to do: Instruct an independent lawyer before you put up an offer for a property. The lawyer’s independence is key in order to get proper advice, as the lawyer should not be the one suggested by the estate agent or developer to avoid conflicts of interest. The independent lawyer in Cyprus will be able to advise you on making a proper purchase and not being pushed into signing a reservation agreement that doesn’t protect you or paying a deposit under bad terms.
Mistake no.2 when buying property in Cyprus
Making an emotional decision or putting up an offer too soon
Frequently people who decide to move to Cyprus from the UK or other countries are in the process of selling their house there and using the funds from the sale to buy property in Cyprus. They visit Cyprus with the purpose of finding a place to relocate in order to enjoy a better lifestyle with a slower pace of life and more balance.
As such when they do find a place they like they may rush into making an offer too soon. They may get carried away by a wonderful sea-view or large windows or even may be pushed into making an offer by an estate agent or developer (which will not happen if you have an independent lawyer in Cyprus as above).
This gives rise to problems such as omitting to look for property problems or noting indications of property problems (such as recently painted walls that hide damp) and not having the purchase funds ready which causes a lot of stress to make the deadlines required for the payments of the purchase price.
This is sometimes due to people being in the process of selling their home in the UK or other countries, but while contracts may have been exchanged, they are not in possession of the funds. As such they need to wait for the funds to be released in the UK but may lose their deposit paid for the property in Cyprus or the transaction may be cancelled by the seller due to the delay.
What to do: Make sure you have the funds before you make an offer and don’t rush into an emotional decision. Visit the property again with your ‘realistic’ hat on and check for evidence of illegal constructions, damp, humidity coming from the ceiling, ask when the roof insulation was made etc.
ADVICE ON CHOOSING REAL ESTATE IN CYPRUS
Mistake no.3 when buying property in Cyprus
Not budgeting for all expenses involved in the purchase and preparing the documents required for the transfer of funds
Frequently, buyers are not prepared in advance for all the costs they will face and the documentation they will need during the process, causing delays, stress and frustration by having to get and provide more documents constantly and having to pay extra money than what they had planned. This may even cause a proposed purchase to fall apart in case of delay and the buyer to lose his / her deposit for the Cyprus property they chose, as there are deadlines to meet with the payment method of the purchase price.
The transfer of funds to Cyprus banks for the purchase of a property in Cyprus is not
What to do: Get a clear picture of the documentation required from yourself for the transfer of funds and the purchase of the property as well as the entire cost of the purchase including the price paid to the seller, stamp duty for the agreement, general expenses such as certifying powers of attorney, lodging the contract etc. Then arrange the finances in advance and have the money ready to be transferred when required.
Mistake no.4 when buying property in Cyprus
Not making a proper inspection of the property for sale
As mentioned above, people who are looking for a property to buy in Cyprus may rush into an emotional decision and disregard matters that seek attention. If you do a proper inspection and notice cracks on the wall or damp/ humidity or the closing off of a balcony or a car port, it is important to take action about it.
It is not expected from people to know when certain signs are worrying but there is a solution for this.
What to do: Get a trustable and reliable professional who will conduct a proper survey on the Cyprus property you are buying. Not all of the professionals will give a detailed report or attend to the matters they must, so get your lawyer to explain exactly what is needed.
Mistake no.5 when buying property in Cyprus
Not doing adequate property due diligence / inadequate contractual protection
Despite appearances, a property may have title deed issues (which may not always be a problem), may be in a location where the land slides, may have mortgages that cannot be extinguished with the purchase, boundary problems, problematic management of the common areas (or too expensive payments for common area maintenance.) and other issues that may not be apparent immediately.
Additionally, when people use non-independent lawyers (such as the lawyer used by the developer or suggested by the estate agent) sign contracts which do not protect them and have problems in the future.
The same goes for off-plan property in Cyprus, which may have a financially unstable developer, a developer who doesn’t do proper construction work or who delays too much to issue separate title deeds etc.
What to do: Get a proper legal due diligence made with the right set of enquiries and searches to reveal issues, if and how they can be solved and at what cost. This may lead in the reduction in the purchase price or in some occasions a decision to buy another property altogether. It is however very important to use an independent lawyer in Cyprus who is experienced in property transactions.
NOTE: The above are for information purposes only and do not substitute legal advice which must always be sought for before relying on it or buying a property in Cyprus.