This article was first published in Finansavisen.
HOLIDAY HOME: – My main impression is that Norwegians are not aware of how differently the overseas property market works in relation to Norway, says Grønneflåta.
– In Norway, it is strictly regulated by laws and regulations that make the possibility of loss negligible compared to most countries.
The Green Fleet has more than 30 years of experience buying and selling homes abroad, especially Spain, Turkey and Sweden. He stresses that most of these deals are not big problems, but they can be very boring when the opposite is true.
Do not understand the system
According to the broker, the biggest pitfall when buying a home abroad is the belief that the same system and guarantees apply on the outside as they do here on the inside.
In practice, the system of transfer of ownership is very different.
– For example, many Norwegian buyers pay part of the purchase price without any kind of guarantee, especially for new buildings, and this leads to a high risk, for example if the contractor goes bankrupt, explains Grønneflåta.
– In addition, some Norwegians sign contracts that they do not understand; Either because they don’t understand the language or they don’t understand the content. Among other things, we have reservation contracts that refer to a major contract that the customer has not seen, giving a high risk that buyers will accept terms they have not seen before.
An imbalance in the contracts themselves, for example in that they are disproportionately beneficial to contractors on new construction projects, is a related challenge.
In addition, we have noticed that Norwegians have purchased housing from “middlemen” who do not have a legal title to the property, says Grønneflåta.
In a dispute between the homeowner and the person who signed as the seller, the buyer often ends up in “squeeze”.
Other risks, according to the broker, are that the buyer is not notified of many liens and that the bidders who bid the highest bid lose their property against competitors who pay “black money”.
How to protect yourself
How do you protect yourself from fraud and other risks associated with buying and selling a home abroad?
– one must realize that the roles are quite different, for example, in Spain than in Norway; Grønneflåta answers, among other things, because the local “brokers” have no responsibility other than to sell.
– Brokers do not have a legal “guarantee liability” or a legal “client account” as a brokerage firm registered in Norway.
The result, according to the director of Eiendomsnøkkelen, is that you are completely dependent on hiring a trustworthy lawyer.
– If you do not have contacts who can guarantee the quality of a serious and good lawyer, the opportunity is to contact the Norwegian-Spanish Chamber of Commerce, which has a good overview, or the Norwegian Real Estate Association, he advises.
– Then the most important thing is to ask the seller/broker all the important questions that you ask in a real estate deal in Norway and preferably a little more. Unfortunately, Norwegians’ critical sense seems to be more absent when they shop abroad.
Buying a home: a scary example from Spain
General Manager Alf Grønneflåta in Eiendomsnøkkelen tells of an unfortunate Norwegian who bought a holiday apartment on a new construction project two years ago.
– It is very common for the offshore contracting process to consist of two contracts; A reservation contract where the property is taken off the market in exchange for a premium and until the final contract comes at a later date, he says.
– In this case, the contractor saw that the prices had risen a lot, and thus expelled the buyer and sold it again to whoever wanted to pay more. Here, the contractor is betting that the buyer will surrender rather than file a lengthy lawsuit.
Grønneflåta points out that such a thing would not happen in Norway without the seller’s responsibility.
– In this case, fortunately, we and our attorney were so foresighted that we closed the “holding amount” in the blocked account so the buyer could get it back, he continues.
– After all, it was a matter of 250 thousand kroner.
The buyer wasn’t happy anyway, as he had been waiting for the apartment and planning to move in for about two years. In addition, housing prices in the region rose sharply during this period.
May require legal action
What do you do if you are still a fraud?
– If the accident occurred and it was not possible to agree with the seller, then the court system is the next option, answers the mediator.
– It is important here to weigh the risks and costs of the process versus just giving in and “swallowing you made a mistake”.
How do you take legal action as a Norwegian home buyer abroad?
– If you want to use elimination, the procedure is the same as here at home, but the issues often take a long time, answers Grønneflåta.
It is important to get a thorough briefing from the attorney on costs; Both for attorney and public fee.
Finally, the Green Fleet Program recommends that one make a critical appraisal of who trades in relation to the offshore housing trade.
– Don’t guarantee seriousness because your assistant has a Norwegian name, he points out.
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