Common Mistakes Made When Purchasing Property

  • 14.May 2012
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It can easily be said that purchasing a Malta property is one of the biggest investments several people will ever make. After the hassle of saving up, or possibly getting the purchase financed, you certainly want to avoid making any mistakes that will counter all your hard work. To help you, we’ve compiled a list of things to look out for so we can help you ensure your transaction goes through as smoothly as possible.

Many people usually buy real estate in Malta with a long-term investment in mind, hoping to re-sell in a few years and make a profit despite making no alterations to the property. This can be true for some properties, however properties do not equally increase in value over the years – certain properties offer a better return on investment, and many make the mistake of forgetting this fact. Always be sure you carry out sufficient research, especially if you’re planning to “cash in” a few years down the line.

If your purchase is being financed by a bank, ask the bank to give you an actual borrowing amount. Calculations on their websites are indicative, not actual. Meet with the bank before you budget. And remember: there’s no need to spend the full amount borrowed – if you can work with less, then do so. Once you have a borrowing limit from the bank, avoid changing your financial situation, especially where your credit rating is affected. For example, if you decide to take a car loan, your borrowing limit for a home loan would then diminish significantly.

Be sure to carry out background research before investing in real estate in Malta. Make certain that you are aware of all the costs involved and budget accordingly. Nobody likes surprises when it comes to spending money.

A common mistake made by those buying property in Malta is to work alone. When in doubt, consult with professionals to back up your decisions, including architects, notaries, banks and real estate professionals. Several people avoid working with agents to avoid paying a commission, but they fail to consider the fact that one mistake may cost them more. If you only take medical advice from a doctor, it stands to reason that you would only take real estate advice from real estate professional. Working with a real estate agent, and placing full trust in them, ensures every obstacle is tackled along the way – they’ve handled several transactions and there’s nothing they haven’t heard before. Keeping important facts secret from your agent will only confuse things when it comes to signing a Konvenju (Promise of Sale).

Once you’ve found your ideal property, get in inspected by an architect who can better tell you what problems you have or may have in future. Finally, be sure that all the property’s selling points are properly researched before you make an offer; for example, if a seller tells you that his property has a green area near it, and can guarantee that the views will always be there, don’t simply take his word for it. In the case of plots, you may be told that MEPA will grant a permit to build certain properties – again, research this and get the facts right before committing to anything.

Another dangerous mistake made is getting estimating costs rather than actual quotes. If the property you’re looking at needs work, always gets the works quoted. This will help you negotiate the price better and save you the panic of underestimating costs and exhausting your budgets. If you’re looking to purchase a large property in Malta, be sure you constantly have the funds to maintain it. If you cannot, you may be forced to sell and possibly lose money if the condition of the property has deteriorated.

At the end of the day, it’s all about having your facts in order. Never work on assumptions or estimations and, when in doubt, always consult the experts. Well-armed with proper guidance and facts, you’re practically guaranteed to have a problem-free purchase from start to finish.

 

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