For most of us, a house or a property is the most expensive purchase we will ever make in our lives. Whether it’s for investment purposes or for end use, buying real estate can be an overwhelming process especially if you have no prior experience.
To help you properly navigate the process, we at Homes and Beyond prepared the ultimate checklist to transform this seemingly tedious task into easy-to-follow steps. We’re sure that once you’ve gone through this article, you’ll be 110% ready to look for your dream real estate property in Turkey!
Before you even begin hunting for a property, take a look at your finances if you are planning on applying for a mortgage. Your credit scores and reports would play a big role in determining whether you are qualified for a loan.
You also need to set aside money for your reservation fee which is 1% of the price, the downpayment which needs to be settled within the reservation period, and the closing costs. This brings us to the next item which is…
With your finances sorted out, it’s time to settle on a budget. This will help prevent heartaches and bad decisions, since it’ll help you set realistic expectations when choosing a house or a property. To create a budget, list down your regular monthly expenses and the expenses related to your new house (you can just estimate for now!). Once you’ve laid them all down, divide the total by your gross monthly income to find out your debt-to-income ratio (DTI). If it’s higher than 43%, you need to lower your house-related expenses.
Your finances and your budget are all polished – great! Your next step would be to look for a reputable real estate agent. Although it’s perfectly acceptable to go to open houses on your own, an experienced agent can help you once things get too technical or serious. This is significantly important if you’re buying real estate overseas since they have valuable information about the country’s or city’s market conditions, they can pull up better deals and prepare counteroffers, and they have access to homes and properties that are yet to be publicly listed.
Now that you have an agent, it’s time to go house hunting! Even with an expert to guide you, make it a point to trust your gut instinct. You don’t have to say yes to the first house you “fall in love” with, but be mindful as well of the timetable if you plan to move in before a certain date (start of the new school year, for instance).
Aside from a real estate agent, you would need the assistance of another expert when delving into the realm of real estate — an attorney. A legal expert can help minimize risk, and together with the real estate agent, ensure a hassle-free process. Factors such as the language barrier, differing laws, and even the currency can turn into major issues if you are making an overseas investment. There are real estate agencies that offer both agents and attorneys — if you are looking to invest in Turkey, you can reach out to Homes and Beyond for both. We also offer translation and interpretation services!
Almost there! Your property of choice may look flawless at face value, but what about its overall structure? A house inspection is an integral part of the purchasing process because it will save you from unforeseen costs and liabilities. It can even reveal minor issues about the property (don’t worry, this happens!) that you can use to bargain for a lower price! Aside from getting a general inspection, make sure that you sign up for specialist services as well such as mold and termite inspections.
The property passed all inspections — finally, it’s almost yours! The last thing you need to tick off your to-do list is to prepare a handful of documentation during closing. You also need to settle some government taxes and necessary expenses, also known as closing costs, before you get handed the property’s title. These include the following:
- Purchasing Tax (2 to 4%)
4% of the property’s sales price is handed over to the government. This is usually divided equally between the buyer and the developer.
- Value Added Tax (VAT) (1 to 18%)
Properties with a net area of under 150sqm are subject to 1% VAT. Beyond that, the VAT is 18%.
- Utilities (approximately US$1000)
Set aside at least US$ 1000 for your property’s electricity, water, and gas connections, as well as registrations.
Once all these are settled, congratulations! You are now a proud owner of a new real estate property.
If you are ready to invest in Turkey’s real estate market, get in touch with us today and we’ll guide you through the process!