Now let’s look at each of these stages briefly, focusing on the most important points.
1) Advance Preparation
The first step buyers take to find a bargain priced property is to search an agent’s website. This is also the first, and biggest, mistake. In a rush to avoid ‘losing’ a bargain that looks cheap, the agent requests a ‘reservation deposit’. Paying a reservation deposit is the second mistake buyers make, and why so many foreigners become ‘locked in’ to a transaction at prices much above market value, for properties that are often defective.
Buying successfully at bargain prices requires 100% avoidance of everything in the paragraph above. Instead, the first step, is the ‘Advance Preparation’, that enables the foreigner to buy in the same way as a local Turk. There is no alternative. Buying a bargain means negotiating the best price and IMMEDIATELY closing the deal with payment and completion. Sellers do not wait around for foreign buyers to get their paperwork in order- that can take weeks. Searching for property and negotiating a bargain price is a complete waste of time, unless the buyer has completed the advance preparations necessary to ‘put cash on the table’ and thus immediately complete the transfer of title from the seller. And this is the ONLY way to take advantage of foreign exchange $/TL currency fluctuations of 10% or more in a week. It is no good waiting for the fluctuations, and then trying to purchase, if the paperwork is not ready. Advance preparations is the first step in the Investor's Tool-Kit, and takes 3-6 weeks typically, and include such matters as local registrations, local bank account preparations, authorisations, etc
2) Finding the Property
Searching the internet for a property for sale in Turkey is the least likely method of finding a bargain to buy, and also the most risky. The top five pages (and more) on internet search engines are occupied by real estate agents and developers’ sales agents. They ‘see you coming’, and are waiting for you, with their ‘games’ and tricks. The result? More than 85% of foreigners have paid prices 25% or more above the fair market value, or have purchased defective properties.
Fortunately there are many better channels to find bargain properties at discounted prices, but if a buyer does not speak Turkish, these will remain undiscovered. These channels include ‘for sale by owner’, bank repossessions, auction, internal databases, and private networks. SEE BELOW. Generally these channels require Turkish language skills. There are more than a million properties on the market in Turkey, and ample supply to serve two years of buyers’ demand. Wise buyers looking for bargains will take advantage of these circumstances, by sourcing property from these channels, with an experienced and professional Property Finder.
A good ‘Property Finder’ should be capable of searching these sources for properties meeting a buyer’s specifications, but if that is all they do, they are only doing half the job. A professional Property Finder or Sourcing Agent should also be capable of completing ALL aspects of ‘’due diligence’ on the property.
3) Due Diligence
Is the person selling the property the owner? Is the property being bought, the same property that was seen? Does the property have the correct permits? Is the contract legally structured and executed, or a defective contract (most agents’ contracts are) which will just cost the buyer more in legal expenses, if they try and enforce it? Is the building constructed in accordance with regulations, or will it be subject to a demolition order? These are a few of the questions answered by Due Diligence. The buyer should never rely upon the seller or his agent for the answers. For ‘due diligence’, independent advice, from an experienced professional, is essential.
Is the property being sold at a fair price? To solve the chronic problem of agents selling property to foreigners at excessively high prices, new regulations now make it a requirement that a foreign buyer must be given an ‘appraisal report’ (an ‘eksper rapor’). These reports show the market price of the property. Agents and developers will still try and convince buyers that these valuation reports under-value property prices by 10% to 20%, but this is simply another misleading tactic to hide the agents’ hidden price mark-ups, and hidden commissions.
4) Conveyance of Title and Completion
Transferring the title from the seller to the buyer involves numerous small tasks and documentation, mostly related to payment of taxes and governmental fees. With the guidance of a professional adviser, and supported by a translator, a foreign buyer can usually manage the conveyance of title at the land registry in person themselves.
The simplest and most cost effective technique for the conveyance is the procedure used by local Turks. The transfer of ownership and the payment are both made together, simultaneously. To reduce risk, steps are prepared in advance for the payment documentation. Sometimes a purchase may have contentious aspects, for example, when the buyer has agreed a discounted price with the seller, but is suspicious that the seller may try ‘last minute tricks’ to get a higher price. In such cases it is advisable to have a professional adviser present.
For Citizenship Investors, the final step of the property purchase, the Conveyance & Completion, is the first step of the Citizenship Application procedure, and it is essential to have these coordinated with your application agent: the Team at mytapu.com provide the integrated services for both property purchase and citizenship application.
Buying a bargain isn’t as easy as buying from an agent or a developer, but why throw money away? When the price savings can range from %5 to 20%, amounting to $5,000 to $50,000, it’s the only way a sensible person would buy. Ask the Team at mytapu.com. They are ready to help at any step of the procedure.
Additional Reading for Buyers:
Residential Property Investors Tool-Kit for Turkey
Property Finders Service Istanbul and Coastal Turkey,
Citizenship Investment in Turkey
The One Source for Every Turkish Mortgage
Legal Services for Property Matters in Turkey
Advice for Property Matters in Turkey
Property Price Histories in Turkey
Why Istanbul Lifestyle Retains its Allure for Real Estate Investors…