On the market: Buying real estate in Europe
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Tired of the U.S. housing market? Maybe it’s time for a quick look at what’s going on across the pond. Admittedly, the scenery is amazing. But experts say it’s important to explore all your options when considering an international purchase.
‘Property prices are down 40% to 50% from highs of 2006 and at or very near the bottom,’ says Nicholas Hughes, chief executive of Coldwell Banker Ireland in Dublin.
Hughes says the average price for a single-family home in Dublin is about $325,000. Homes in South Dublin are twice the average ($800,000 for a four-bedroom). Outside Dublin, the price drops to about $250,000. West Cork, Galway and Donegal in the west are popular areas for vacation travel (if you are thinking about rental income).
But Hughes cautions buyers to avoid areas hit by flooding last year, incomplete developments and those that have not sold out within two years of being finished.
Nikos Iatrou, a real estate professional with Southeast Real Estate in Athens, says housing markets there are strong for international shoppers and trending toward ‘greener’ properties.
‘Second homes have consistently done well in Greece, mainly because we enjoy a long summer,’ from May to October, he says. In Athens, prices range $185 to $600 a square foot, he says.
Whether shopping for beachfront in Cypress or a flat in London -- where, according to the British Land Registry, property prices ranged from about $482,000 to $1.3 million in December -- experts say work with a reputable and qualified real estate professional (broker or attorney) who understands regional laws.
The National Assn. of Realtors has a network of certified international property specialists, and the International Consortium of Real Estate Assns. provides links to international sales professionals and properties worldwide.
When looking at homes, consider costs (travel, maintenance, utilities, taxes, insurance, translation and valuation services, legal fees and notary services) and how changes in local currency and political unrest or access to transportation could affect the value or your property rights.
Understand the financial implications (such as buying in one currency and financing the home in another) and how laws (including succession and tenant laws, especially in France) affect ownership rights and renting options. Expect differences in the real estate descriptions (a European bedroom can look more like a large closet).
Compare interest rates, terms and fees from different banks, both at home and in Europe. Know the tax implications of owning in the area. Consider establishing a relationship with an international bank (HSBC, for instance) so you can link accounts and move money easily.
Look at lenders offering financial options for U.S. home buyers considering an international purchase. And know your options in advance. Both at home and abroad, experts say, financing is increasingly more difficult to secure.
‘It is worth investing a little money [and time] in the early stages to avoid bigger problems later on,’ Iatrou says.
Even when you do everything right, Los Angeles resident Judy Moore says things can go wrong.
‘I have a contractor in prison for manslaughter, a much lighter wallet and lawyers on two continents,’ says Moore, 56, a real estate investor, who is writing a book about her experience buying and renovating an investment property in southern France.
While visiting a friend and former neighbor in December 2006, Moore decided to buy a five-floor, 2,500-square-foot fixer in Perpignan, in the south of France, for about $122,442.
Moore, who travels to the home about four times a year, finished renovating three of the four units in May 2009 (cost: about $300,000, double the initial projection) and started offering vacation rentals for $500 to $700 weekly per unit.
Moore’s story is a cautionary tale with an upside.
‘I hired a Dutch contractor, checked his references, saw his work and signed a legal contract. But my [remodeling] contract doubled. Then he got drunk . . . and killed someone. He was in a coma . . . and is now in prison. But my French has improved tremendously. I now speak legal French and contractor French,’ she quips.
Moore, who is suing the former contractor, says international investors should proceed with care.
‘France is a civilized country with great bread, cheese and wine, but they have their own laws and ways of doing business. What you might think should happen in any given transaction will not necessarily happen’ when buying overseas, she says.
Moore says the region where she lives, Languedoc-Roussillon, has seen a lot more sales recently.
‘On my street alone, in the past year I know of seven properties that have changed hands and are being renovated,’ she says. Still, she says, before you cross the pond, know why you’re buying.
‘If you [don’t] plan on living in the home [and are] only going over a couple of times a year, consider renting someone else’s dream,’ she says.
Here are some interesting listings:
Skopelos Island retreat
Located on Skopelos Island, this Greek retreat was built in 2009 and features two villas (one with 1,400 square feet and one with 750 square feet) on 1 acre of land. The property, which overlooks the Aegean Sea and features access to a private beach, has a swimming pool and high-quality finishes throughout. Inviting offers in excess of $1.3 million. For more information, contact info@southeast-real-estate.com or niatrou@southeast-real-estate.com.
St. Clerans, Craughwell, Galway, Ireland
Listed at $4,914,902 (give or take a euro or two), this stately two-story 18th-century Georgian home (owned by movie director John Huston at one point and celebrity guest show TV host Merv Griffin) has 12 bedrooms, a library and a parkland setting. A guest lodge with a bedroom and bathroom is just a few steps from the main house.
16 Coultry Close, Ballymun, Dublin, Ireland
Listed at about $393,000, this three-bedroom mid-terraced family home has a very quiet courtyard setting, a park opposite, gas-fired central heating, a south-facing rear garden, security alarm and parking for two.
Listed at $218,442, this 1750 country ranch (don’t think Texas, although it is on 40 acres) home has two bedrooms and one bathroom in 807 square feet, a stable and four-car garage.
Restored Tuscan farmhouse, Massarosa, Italy
This restored Italian home sits in the hills above the coast close to the Massarosa, a city in Italy’s Tuscany region. Secluded among olive groves, the restored home features three bedrooms and two bathrooms in 2,153 square feet and is listed at just over $1 million.
Houseboat, Ice Wharf Marina, King’s Cross, London
With an asking price of about $163,467, this one-bedroom houseboat (yes, it floats) has an open-plan living area, a reception room, wood paneling and a fully fitted kitchen. The houseboat is located in the Ice Wharf Marina, a secure location with easy access to King’s Cross Underground station and London’s fashionable Upper Street.
Corner cottage, Ryde, Isle of Wight, England
This three-bedroom terrace home is on the Isle of Wight, a county in the English Channel on England’s largest island, known for its annual June music festival. Close to the town center, the home is reportedly in need of some modernization (and a new coat of paint) and lists at $115,149.
-- Michelle Hofmann
Top photos: Before and after shots of the spiral staircase in Judy Moore’s French fixer. Credit: Judy Moore.