12 Tips You Need To Know About Buying Real Estate.

Twelve questions to ask before buying foreign (or domestic) real estate. This is not legal advice but some things to consider in a "buyer beware" world.

Do not sign whatever contract you are given by the developer or builder.

Developers, contractors and builders often use boiler plate forms prepared by their attorneys which are written to their best advantage leaving the customer with the short end of the stick. Do you really want to sign an agreement that says if there is a dispute you will pay the other party's attorney fees or that you can't make a warranty claim until your final payment is made or that making the final payment is acknowledgement that the job has been completed satisfactorily?

Read the contract that is presented to you, cross out language you don't agree with or negotiate with the other party until you have an agreement that you are willing to sign rather than simply signing whatever documents the other party presents to you. You may wish to consult a lawyer and have him or her negotiate on your behalf.

Does your builder have insurance?

Johnson-Dulaney Builders, Inc. had no insurance to cover our losses, Raymond L. Sist Ceramic Tile did.

Is there year-round access to the area, and what is the drive time from the airport?

Not all roads are accessible year-round in the tropics, so the maintenance and proximity are very important. In other words, the key factor is the time to reach the destination, not the miles.

What about safety, security, and healthcare access from the property? How is security provided on-site and how far to major medical care?

The important question is not how far it is to major medical, but how many minutes by car in both the wet and dry seasons. 24/7 security should be provided at any public entrance with cooperating back up from local and national police.

Can title insurance guarantee be issued by a reputable title insurance company?

If you can't get title insurance from a reputable title insurance company, seriously reconsider your purchase.

Is there a building requirement, and what kind of construction and design standards are in place and enforceable?

Zoning is almost non-existant in the tropics and you might not like what the neighbors next door decide to build. If you want to live in a community and have neighbors, be sure that there is a requirement to build in order to avoid living in a "ghost town". Know what the dead restrictions are in place, or you may be unpleasantly surprised by a neighbor who's tastes are radically different than yours.

Does the current infrastructure include high-speed fiber optics, underground utilities, paved streets and sidewalks?

Do not take for granted paved roads, street lights, or state of the art telecommunications. If these are not properly provided, or just "promised", you could be without adequate access, water and communications. Rarely, if ever, will the government or utility company provide these services. If you are told "it's coming", don't hold your breath. Buy what you see and be sure that the prices are indicative of existing reality. You'll not be disappointed this way.

Is there enough water and water pressure, and is the home plumbed for hot water? What about sewage disposal?

Water pressure must be planned and paid for. Either the developer has installed the appropriate storage and plumbing systems and covered the cost, or the property owner will pay for this with storage tanks and pressurizing systems. If you are considering an existing home or condominium, turn on all faucets, inside and out, the showers, and then flush the toilets. Is there sufficient pressure? Look under the sinks in all bathrooms and be sure there are both hot and cold water lines running to all faucets. If the development does not provide sewage lines, then a septic tank paid for by the owner will be required. Be sure to request a copy of a perk test as many of the soils in the tropics are heavy clay and you as the owner will be required to install a high cost sewage disposal system.

What about a Home Owner's Association? Are the fees high enough to cover the maintenance of the infrastructure?

Yes, high enough. Fees set too low equate to expected surprise assessments in the future. Or they may necessitate a drastic rise in HOA fees when the true cost of maintenance are carried by the property owners. Understand the true cost to carry the public infrastructure.

How will you build your home from thousands of miles away? Who can oversee the construction of the home, and what is included?

Look for a project that includes homes as examples of what you'll actually receive. What are the written specifications? Who is going to validate these specs as the home is constructed? Have they wired properly for 220v water heaters and air conditioner? Are there hot water lines to the sink and shower? Are lights, fans, faucets, and fixtures included in the price? Are appliances and AC units included in the price? Is there a dryer vent to the outside or a water line to the fridge? Did the contractor include the telephone and cable TV wires? North Americans assume these things as included. Assume nothing.

Are there amenities and green belt areas for use by the homeowners and visitors like pools, parks, golf, tennis, fitness and club house facilities?

Be sure to know the vision of a project and that the long term plans align with your goals and desires as a homeowner. If public spaces are important to you, be sure they exist in the master plan. Remember too that there needs to be a plan for the care and maintenance of these areas. Is there a noisy nuisance nearby? Proximity to high activity areas may be too close for some people. Make sure before you buy or build that you are not near an attaraction that is not consistant with your needs.

Is the development company financially sound and do they have a record of success? Is financing available for property ownership?

Buying a property in a foreign country is akin to getting married. Know who you are marrying. Hopefully the developer will be around for many years and, if so, you may want to be sure you are comfortable with the long term association. In addition, because financing is rare in the region, the developer should provide a form of financing as a buyer's option.