The Advertising Standards Authority has started to look into false and misleading advertising campaigns in the real estate consumer market. Words such as “guaranteed”, “expected” and “inevitable” or all considered a big NO NO, since they promise something that might never come to fruition.

Many property investors could survive a major disaster if they had only listened to the right advice before they bought. We hope that you will find our Top 10 Mistakes to Avoid When Buying Abroad helpful enough to question certain practices within the real estate industry.

1. Trust in hype

With the hyped up property market it is easy to see why so many investors get misled down the wrong track. Believing that your property will double its price within the next 5 years isn’t hard when everybody around you talks about a boom and what not.

But unfortunately many fall for the hard sell, only to wake up later with a massive loss and no point of return.

2. Investing in the wrong rental schemes
Have you ever considered why some developers give you a guaranteed rental return in the regions of 7 % on your dream property for the next two years? It isn’t because he is a particular nice man. What happens with these schemes is that in effect you are already paying your own rent as this is factored into the sales price.

3. Missed opportunities

We all know about those. A friend who deals with overseas investment opportunities advises us of the “right” market and we shake our heads, only to regret it later saying “I should have bought then”.

4. Not using a lawyer?

Funny enough, many people sign a contract before they go and see their lawyer. This is certainly not something that one should do if they want to avoid major disappointment.

Always seek legal counsel before you sign anything and that includes property.

5. Following the wrong advice - Shady operators

There are many places in the world where you can get really burned. You know, the ones where you get flown in with a helicopter, treated like a princess or a king and waited on hand and foot before you even commit.

Many of these shady operators act as a dodgy ring of so called lawyers, Realtors and loan sharks. They paint you a rosy picture and blind you with all the expenses fit for a queen.

Don’t fall for it. Always seek independent opinions and not those that were recommended to you either.

6. Paying cash for property

No kidding. Some people do and live to regret it when their suitcase full of money gets stolen before the settlement.

7. Getting eaten alive

What about those poor souls who get sucked into ghost properties. These properties simply don’t exist except on paper and once the buyer signs, the seller disappears, never to be seen again.

If you think that is funny, then think again as it happens only too frequently all around us.

Then there are the countless investors who paid a down payment on a yet to be built property, only to never see it happen.

If you think all this is bad, it gets even worse. Imagine you life in sunny England (yeah right) and buy a lovely investment property in sunny Spain (more like it). You think you made a real bargain and are ever so excited about your new purchase.

On your first available long weekend you pack your bags for a trip to your new place only to find out at the other end that somebody else owns the property.

True.

All these huge nightmare scenarios happen all the time. Because people don’t use lawyers, they trust the wrong person, they over commit and more.

Be wary

As with everything, use common sense when you deal with investment properties and dream homes. Make sure to seek the right professional help and don’t believe everything you get told. It pays to be a little judgmental, even if you feel this is the bargain of the century.

8. The greed syndrome
Some investors can’t stop once they start. They feel secure and buy more and more properties thinking that the boom will last forever. Eventually they totally over commit themselves financially and boom, there goes the dream of financial freedom. Instead comes the doom and gloom of bankruptcy.

9. Buying in the wrong market
It isn’t always gold when it shines. You might want to question why that apartment on the Costa del Sol is so dirt cheap? Could it be because it is surrounded by massive development that will continue to make noise, dust and pollution for the next 5 years. Location - location - location really does matter.

10. Do you trust Agents?

Let’s face it, most people don’t. For some reason we have a negative affiliation with agents. Perhaps it is because of those pushy few who manage to ruin the whole industry name or else the large stakes that are attached to owning a home abroad by means of most times taking out a risky mortgage.

It would certainly be beneficial to become friendly with your agent before you sign on that dotted line. Unless they hang out at your local dive and you are a regular customer, it is unlikely that this is going to happen fast.

There is a way, or few to get cosy with your real estate agent and if you are in the market for property, it is certainly advisable to just do that. For example you can use property shows & exhibitions.

You could also drag him out of the office for a free cup of coffee (somehow we feel this wouldn’t be too hard). Real estate agents are notoriously known for prowling the streets during the daytime when everybody else is slaving away at their day jobs.

Oh well, some got the life of course.

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