BUYER’S GUIDE - PURCHASING PROCESS IN CYPRUS
So you came into the decision of purchasing this lovely holiday home you ever dream of in the coastal area of Paphos, or even better move permanently in the sunny island of Cyprus. What are the next steps when it comes buying a property in Cyprus? Here we have split the purchasing process into bit-size steps in order to be more understandable for overseas and local buyers.
- HOW MUCH HOUSE CAN I BUY/AFFORD? – PRE-APPROVAL (1-2 Days)
Obviously step number one has to do with how much is your budget. Depending if you are purchasing with cash, selling a property or getting a mortgage? If you are looking to get a mortgage banks require around 25-30% as a down payment, if you are local it might be closer to the 25%, if you are a foreigner you are most likely looking closer to 30%. However, every bank is different. Selling a property and releasing funds from there might have a big implication if the market change. On the maturity of the loan you should be around 65-70 years old. If you have the money in the bank this is great since you can move to step number 2, however even if you have the cash it might worth looking at the various loans since you might be getting a very good deal. In todays market interest rates are very low hence might be a good option as well.
- PICK A SOLICITOR/LAWYER - WHO WILL REPRESENT ME? (1-3 Days)
In Cyprus, buyers do not have to work with a real estate lawyer but there can be many moving parts during the purchasing process and negotiations. Considering the amount involved in the transaction it is always good to pay a small premium in order to avoid any big loss, even if things look great and property has Full Title Deeds it still worth considering hiring a solicitor. Property Canvas works with established lawyers in the industry to ensure our clients are well protected in their investment. Ask us for a referral to a good attorney early in the process.
- FIND A PROPERTY- WHERE DO I WANT TO LIVE? (Varies)
This is probably the hardest step of all, since there are a lot of variables to consider. You might like living close to tavernas and bars but your spouse might prefer to live in a countryside. It would be good to brainstorm reasons why you should go for one place rather than a different location prior of starting looking for properties. This will earn you valuable time. You should narrow 2-3 neighbourhoods of where you want to live. Think about your commute to work, where your friends live, access to grocery stores and restaurants, proximity to transportation, and schools. If you do not know about the specific location ask the agent to recommend you or suggest you various amenities and even neighbourhoods that offer what you are looking for.
- WHAT DO I WANT TO PAY FOR? – NEGOTIATE AN APARTMENT (1-7 Days)
Real Estate Market is very competitive, so not everything is negotiable, but when there’s a chance, we will fight to the death for you. With older apartments, inquire about assessments, fixtures, window replacements, air conditioners, rugs, floors, curtains, appliances, working fireplaces, washer/dryers, etc. There are a lot of negotiation strategies to follow and of course not everything is applicable to all situations. Sometimes starting with a low offer might ofent the owners and neglect any higher offers, which might lead to loosing a property you really liked. At the same time offering full might not be the best strategy as well, however if the property is a bargain at that price might not worthing risking loosing it for a couple of thousands. You should be prepared to sit down with your agent and discuss what would be the best strategy to follow. The power agents that make up Property Canvas are expert negotiators undergoing extreme training before negotiating your purchasing.
- RESERVATION DEPOSIT (1-2 Days)
Once you have agreed on the price and details you will need to pay a 3% of the agreed price as a reservation deposit so the apartment will be reserved and taken out of the market. This amount will be counted in the total price you agreed. This reservation deposit can be either collected from the estate agent or the seller solicitor/lawyer. You should always ask for a receipt of this reservation deposit. Please note that since this deposit will take the property out of the market you would not be able to ask for a refund if you change your mind. It would be wise to ask the solicitor/lawyer or agent to mention on the receipt that If there are any encumbrances on the property and cannot be transferred to your name you you would get your deposit back since it was not your fault.
- WHO WILL LEND ME MONEY? (1-4 Weeks) – Applicable only for Mortgage
Since you’re already pre-approved, this part is so much easier! Bank will send a valuer and come up with a report. After the valuation comes up then the bank will be able to proceed with releasing the money to the seller through a check (usually referred as “Bankers Draft”). It is worth mentioning that usually bank valuations are usually undervalued. The reason for this is for the banks to be more conservative, so if a valuation comes up reasonable lower than the price you agreed do not panic.
- WHERE DO I SIGN? - SIGN A CONTRACT (1-3 Weeks)
Generally, in a sales transaction, a local real estate solicitor/lawyer represents each buyer and seller. The seller's lawyer draws up the contract for the buyer's lawyer; the buyer's lawyer does "due diligence"—encumbrances, memos, title deeds, etc. The buyers sign the contract and forward the contract with a apprx. 30% deposit; the sellers execute the contract. This is probably the lengthiest procedure in a real estate transaction and where lawyers/solicitors are really crucial. IF there is anything wrong your lawyer/solicitor should inform you and explain everything so you get to decide if you are proceeding or not with all the facts straight. This is you are paying for a lawyer anyway.
- THE TRANSFER – SCHEDULE A CLOSING DATE (1-3 Weeks)
After the agreement is signed the sellers lawyers/solicitors prepares all papers and pays any outstanding bills the seller has on the property and gets the Tax Clearance so the property can be transfer to the buyer. The buyer lawyers/solicitors take all necessary steps and prepares the paperwork to bring the money in Cyprus or arrange the transfer to a foreign account. At the same time they check that all relevant taxes and outstanding bills have been cleared before getting the property in your name. Then the two lawyers arrange a day to meet in the Land Registry where the exchange.
and then it's........TIME TO CELEBRATE!
CONGRATULATIONS on successfully buying your new home in Cyprus. Your search has finally come to an end and it's time to celebrate all the hard work you've put into finding your perfect home. And please remember, your referral in the greatest compliment we can EVER receive!Free Buyer's Guide Checklist