Guaranteed rental returns… Today-only discounts… Zero payments for two years… A dreamy loft overlooking glassy waters and spectacular beaches…
Attractive as some deals may appear to be, buying foreign properties can be more complex and carry significantly higher levels of uncertainty and risk than local property transactions.
Before signing on the dotted line, do your homework to be sure what your purchase entails. Just remember: if it appears too good to be true, it probably is!
Always do your own research, read the fine print, and do a self-assessment of the risks before making a decision.
Some key factors you should take note of include:
- Developer’s background and track record
- Costs and financing limits — find out what the total financial commitment is, what hidden costs there are, and what the progress payments are like
- Claims of high and guaranteed returns — these discounts and returns could have been factored into the price that you have to pay; always ask for evidence to substantiate claims of returns
- Rules and restrictions on foreign ownership, such as types of properties, minimum prices, and locations of properties that foreigners can buy
- Actual location of the property — do not rely on sketch maps! The word “near” in the Singapore context could mean something quite different in other countries
- Transaction-related services — be aware of dispute resolution mechanisms in case the transaction does not proceed smoothly
For more consumer tips before buying an overseas property, check out the Council for Estate Agencies’ (CEA) brochure and poster. Do also try the fun quiz on Mothership.sg.
You can buy overseas property directly from foreign developers. Foreign developers do not need to be licensed by CEA, and are akin to individual property owners who are selling their own properties.
Foreign developers can also partner with licensed local property agencies to help with their marketing activities in Singapore. Do note that in this instance, the agency and its agents represent the developer’s interests, not yours.
Whether you decide to buy a foreign property directly from the developer or through a local agency, always exercise due diligence and never rely solely on the information provided by sales representatives.
If you are working with a local property agency, always check CEA’s Public Register to confirm if the agency is licensed and the agent is registered. Local property agencies and agents must adhere to a set of guidelines set out by the CEA, including performing several preparatory checks and providing pertinent information to potential investors.
The agents should also undergo project specific training to ensure that they can provide buyers with accurate advice and information.
CEA can take disciplinary action against errant agencies and agents. However, in the unfortunate event that a foreign property investment goes awry, CEA does not have any jurisdiction over foreign developers and overseas properties. Consumers will have to seek legal recourse to recover any monetary losses.