Today I have put together some tips for anyone considering investing in property in Croatia. These have been put together after first hand experience this year. This should come in very useful for any potential investors seeking property in this booming region.I have put together a checklist for you.
The key things I have learnt are:
- First step. Ensure you open up a Croatian Bank account by walking into a Croatian bank when you arrive with your Passport. Once you have your bank account ask them to provide your IBAN number. If your money is sitting in a uk bank account its just a case of transferring this over electronically. The cheapest way to do this is via Moneycorp foreign exchange. The money is transferred into their account and they will then send electronically to Croatia using your IBAN number. The money should arrive in 2-8 days. I chose to open a bank account with Privredna Bank that had online access so I could view account balance from the UK.
- Always make sure that you obtain a contract between you and your Croatian estate agent to stipulate how much you pay them, at what stage (pre-contract, contract) etc. What happens if the sale doesnt complete?. Will they refund the money you have paid?. This contract should be put together by a lawyer (not the estate agents own lawyer). The contract should also be notarised so its a legal document. If there are any issues you can then get your money back fairly easily through the Notary.
- Never believe anything anyone says unless its written down. People will say anything to get a sale. Such as” This is an upcoming area there wont be any apartments built in front of this property”.. If there is land available in front of the property it is highly likely your sea view may be blocked in several years :-)
- Make sure that you use your own Croatian lawyer. Make sure they are English speaking so that they can draft a contract in half croatian/half english translated. Never use the estate agents own lawyer as this can cause a conflict of interest if things go bad.
- Arrange for your deposit to be paid to the Lawyer/Notary or to an Escrow account rather than the normal method of paying directly into the sellers bank account. This will reduce the amount of pain required to get your money back if for any reason things turn bad.
- Ensure that before you hand over any money that your lawyer checks with the land registry that the property you are buying is legal and has clean papers and is built in a residential area. This is very important especially with older properties with change of ownership during the war. If a property isnt legal the government in theory could knock it down in the future.
- Get a feel for the prices as some owners will price their properties artificially high especially when they figure out you are foreign
- If you have any Croatian friends/associates bring them along with you on viewing trips. Its very useful to have a local speaker to ensure you understand all the conversations happening around you (e.g agents, developers, owners)
- If the agent gives you any receipts make sure this is proper receipt and that is is stamped with their company stamp. All Croatian companys have a rubber Croatian stamp. Documents arent legal without this.
- If a deal sounds too good to be true research further and do some digging. Never make split decisions.
The key thing in property purchase abroad is to be meticulous through every stage of the property purchase. Trust noone but yourself and dont be afraid to question. If something doesnt sound right there is likely to be a reason.
If you have any questions regarding property purchase in Croatia why not head over to the free Croatian Property Forum found here.