Buying property abroad is no easy task, for both first-time buyers and the experienced investor. So what difficulties do Russian-speaking buyers face most often? International real estate broker Tranio completed a survey of 476 real estate market experts from 33 countries in early 2018, during which they shared their experience of working with
Exaggerated yield expectations
The most common issue international realtors face when working with
The second most popular answer was finding or selecting a suitable property but scored only half (26%) of the most popular option. In last year’s 2017 Tranio survey, this issue was the most common, and Mr Kachmazov believes that the situation will only deteriorate in future. “Finding property to invest in will become even more difficult", Mr Kachmazov commented. “Due to a large amount of capital currently flooding commercial markets around the globe, quality properties are becoming scarce, and there is a bitter struggle for available properties.” There is much concern about this issue in Greece, where 73% of realtors chose this answer. According to Mr Kachmazov, this is perfectly understandable: the Greek crisis has led to a deficit of quality supply in the market.
Legality of funds
Another common issue mentioned by a quarter of the respondents is the legality of funds when opening an account with a foreign bank (compliance). Typically, investors may be required to provide tax returns and documentary proof of inheritance, dividends, asset sales or rental income. "Clients need to pay attention to bank-imposed requirements on the documents that need to be submitted. For instance, one bank may only require a simple translation, while another may request notarised versions or the translation performed by a locally certified translator", Tranio lawyer Ekaterina Shabalina commented.
Realtors from Latvia, Austria, the US, Spain and the Czech Republic report difficulties with checking the legality of funds more often than others. “Spain and the United States have historically been strict about the origin of funds”, Mr Kachmazov said, adding, “The situation in Latvia has deteriorated much given the ABLV Bank dissolution and other news about chasing
Transaction delays and lack of knowledge
One-fifth of respondents mentioned the sluggishness of Russian-speaking buyers as the main factor contributing to the abortion of transactions. As shown by analysis of the survey results, this is especially typical of clients with above average budgets (starting from several million euros). However, such buyers are less often characterised by realtors as incompetent investors. This type of difficulty was mentioned by just 15% of the respondents when closing transactions.
As little as 9% of foreign realtors noted the Russian-speaking investors' unwillingness to follow established transaction procedures. This issue is more typical of buyers with large budgets. The language barrier and difficulties in the transaction structure rarely impede transactions from being successfully closed. These options scored only 4% each. According to Mr Kachmazov,