There is value in seeing developments for yourself, but only if you are not pressured to put down a deposit straight away and you are allowed to make a decision back at home – and if you have researched other agents and property in your country of choice.
If you purchase a property at an average of £180,000 then, the agents receive £27,000 of your investment.
With the overseas property market currently enjoying a period of huge interest from both UK investors and those looking for a holiday home or a permanent residence abroad, inspection trips are something that most people would have heard of, thought about, or been on. Homes Worldwide talks to Wendy MacAnthony, Managing Director of well-known property agent, MacAnthony Really, which operates in; Spain, Portugal, Turkey, Cyprus, France, Bulgaria, Morocco, Cape Verde, Florida, Dominican Republic and Bahamas; and Peter Cristofi, Marketing Manager for Antonis Loizou & Associates Estate Agents and Chartered Surveyors which is the largest licensed professional firm of chartered surveyors and real estate agents in Cyprus. Both parties have different views on the pros and cons of inspection trips.
Wendy MacAnthony has many positive things to say about the benefits of inspection trips: “The costs vary depending on the time of year and the the destination: for example, an inspection trip to Spain at the moment would be £129 per person. Clients pay for the face value of the flights and are refunded the difference of our subsidy of £100 during their inspection trip. They usually last for four days and three nights, depending on the region: Florida, for example, is four nights and five days.”
Wendy continues: “The benefit to the client is that we create a personalised portfolio to match the client’s requirements prior to the inspection trip, and then the properties that clients are shown match their exact requirements and budgets, this keeps the trip focused and doesn’t confuse them. The benefit to us of inspection trips is a well-planned four-day tour where we get the chance to show our professionalism to the client while showing the different availability of properties in their chosen region, and the end result is that more buyers are created.” So what exactly does an inspection trip with MacAnthony involve? “An inspection trip is viewed as a business trip”, says Lucy, “therefore, during the day, the clients are on tour viewing properties, the surrounding areas, attractions and having a nice lunch. During the evening the clients will either go out and dine alone, or spend the evening with their representative, depending on their wants. Our sales protocol is not to exceed a client’s budget, to match their requirements, remain professional at all times and not to be involved in any misrepresentation”
Wendy highly recommends inspection trips to potential investors and home buyers: “It has been proven that inspection trips are the best way to give the client all the information they require to make an informed choice on where and what they want to purchase.”
Alternatively, commenting on the property market for UK buyers in Cyprus, Peter says: “With so many people looking to invest in the overseas property market, I find it amazing that many companies are still trying to lure potential investors by offering inspection trips starting from £50 a time. One has to ask, how do these companies actually afford to offer such deals considering that most inspection trips last three to four days with flights that range from £150 to £300, with accommodation costing up to £30 a night – and this is before we take into account additional expenses such as food and entertainment?
Perhaps most people’s answers to such questions would be/well these large companies can afford it. ‘Yes, perhaps, but what most would-be investors don’t realise is that these companies charge the developers up to 15% commission. Therefore, if you purchase a property at an average price of £180,000, then the agent will receive £27,000 of your investment; this ultimately means that you have some time to go before you actually achieve any capital appreciation on your property. “It is also of significant interest to learn that these companies are not registered estate agents and have no governing body,” continues Peter. “Therefore there is very little protection for the investor should something goes wrong. Anyone who has been on an inspection trip will probably recognise that, once they have reached their destination, they are not shown any competitor’s developments that may match their criteria, and many have complained before that the itinerary set for them does not give them a true reflection of the island (Cyprus).
“Additionally, these companies are UK-based, which should act as some sort of reassurance to the wary investor, but how much is one prepared to pay for this, given the amount of advertising these companies do in property magazines and the like?
Peter adds: “As project manager of several new developments, I have had meetings with these companies and the only way we could afford to sell our property via them was to add 15% to the price. As a company, we decided to market these new developments through registered agents and associates in Cyprus and were paid a fraction of the price in commissions – maximum 5% – thus saving purchasers tens of thousands of pounds. In Cyprus there is an estate agents’ ombudsman that overseas registered agents, and it is worth bearing in mind that it is less expensive to buy through an estate agent as the commission payable is capital-gain deductible, whereas buying through these unlicensed companies, the owner will not be able to claim this allowance, thus being less negotiable on the price.
“Unfortunately, I think that the majority of the UK public are unaware of these practises and my worst fear is it will keep happening to the detriment of the UK buying public,” concludes Peter. “I would advise potential investors in Cyprus to do their homework and perhaps go as far as calling some of these companies to ask direct questions as to how much their actual viewing trips are and what commission some of them are actually charging. It is unfortunate that some disreputable companies have to spoil it for Cyprus and investors alike.”
Further Reading
Property Inspection Trips with Cash Back by Antonis Loizou & Associates
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