Updated Sep 2023..
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How’s your property hunting in Turkey going?
‘Great….! We’ve found the perfect property, and now following the agent’s advice, the first step is to pay the reservation deposit…’
Buying a property in Turkey, the most important aspect to avoid at all costs, is a situation where you succumb to pressure to pay money for a ‘reservation deposit’. This is entirely unnecessary: there are better alternatives.
When in Rome do as the Romans do… when in Turkey, do as the Turks do…
‘Well, Turks pay reservation deposits, too, don’t they? ‘
Nope. Never have, and never will…! No local Turk buys a property that way, with a reservation deposit - the concept does not exist. Why Turks do not pay reservation deposits when buying property in Turkey…
‘But what about all that about reservation deposits I’ve read everywhere on the internet, it says so… ‘
Yes and you know what that is…it’s called ‘pahlavra’ in polite vernacular… or ‘misleading sales patter’ in English...
If you pay a ‘reservation deposit’ you are financially AND psychologically locked into a transaction procedure that is always prejudiced against your interests, and from there on, you may pay additional cash costs at a later date to rectify various matters that are hidden now (Due Diligence). It is this misleading procedure which is the main reason why more than 85% of foreigners have bought property in Turkey with all sorts of hidden problems. Unable to stomach the need to take legal action to retrieve their deposit, they instead proceed with the property purchase, and defer dealing with the problem until later, when it cost them thousands, and in many cases, jeopardszes their entire investment.
It is not unusual that an agent will try and hide key information from a buyer, and instead try and ‘lock-in’ the buyer with a ‘reservation deposit’. Doing so, the buyer cannot get their money back without going to court (don’t believe agents promises), and cannot withdraw from buying without losing the money, and is less likely to find out the information, until after the sale is completed, when it is too late for the buyer to change his or her mind.
Paying money over requires also that you receive something in return – and this involves some form of valid contractual documentation, executed in a legally valid manner, and again more costs. Paying money over without receiving anything but a receipt is not sensible. If having paid, you decide for whatever reason not to proceed, despite verbal assurances from agents and sellers that they will repay the deposit, to get them to do so, it is always necessary to engage in unpleasant litigation, which will take 18 -24 months to regain your deposit, and will cost several thousand EUR equivalent in court and lawyers fees, only half of which is recoverable upon receiving judgement. And so it is always advisable to remember to add say EUR 3000 to whatever deposit figure is being asked for, as this is the cost of protecting your deposit, and taking it back if necessary, with contract or without.
And remember, paying a 'reservation deposit' does not 'reserve' the property for you in any way, or require the seller to take the property off the market, or prevent the seller from selling to some one else...additional procedures and legal costs are required to prevent an owner from selling to someone else. And yes, the contracts agents provide are generally defective in substance and/or execution. What's more there are additional legal registrations required besides the contract.... More costs, and more risks. A 'reservation deposit' serves no other purpose than to secure an agents commission, which is why agent's often advise that it is 'non-refundable'... So if you want the money back, be prepared for court....
And remember, once you have paid a reservation deposit, you will never be able to negotiate a better price, and the seller is not committed to the price.... Negotiating the best bargain price is not done until the purchase transaction is completed: payment made and ownership transferred. In order to succeed, a buyer must have the Advance Preparations taken care of, and this way there is never a discussion of 'reservation deposits'. Find out more about how to buy at bargain prices....
The ‘reservation deposit’ is the most crucial tactic used by agents which a buyer must avoid at all costs. Unfortunately it is just one of many deceptive tactics agents use multiple times every day, of every week, of every month. The buyer may be prepared for one tactic, but the agent has many, and will hook the buyer with one of them.
An unknowing buyer can not possibly learn enough in advance, about all of these tricks, to win in such a situation.
An experienced Property Finder or Transaction Manager, dealing with agents daily, can and will.
Ask the Team at mytapu for a FREE copy of
'The Guide: How to Buy Like a Local'...email to Buy@mytapu.com.
At mytapu.com our policy is to ensure our clients are fully informed, so that they may make fully informed decisions: this helps to ensure better outcomes all around.
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