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Using Common Sense in Real Estate
By Harriet Cochran Murrray • Cochran Real Estate - September 2008

Over time, I have come to believe that what we usually call an example of common sense is an opinion based on cultural experience.

To show common sense when you are in a foreign country, I recommend the following points.

1. Assume you know nothing about how things are done where you are. This includes procedures, customs, habits of how the subject is handled as well as how the people involved will expect you to understand what you are doing or accepting.
2. Use your senses of hearing and seeing. Use your sixth sense of intuition.  Observe what people say, how they say it, what they mean, how their body language plays into the scenario. Understand that their body language may mean emotions or feelings that are the opposite of what you think, so observe without deciding on a conclusion of the meaning.
3. Think hard about the subtlety of language. If you do not understand or speak the local language, the translations into yours may not be good enough to cover the meanings of what is truly meant to be said. 
4. Ask questions, which are real questions and not designed to give you an answer or explanation you are assuming or think you can force the responder to give to you, as you want.  Do not assume.  Let me repeat: do not assume.

What should you not assume?

The persons giving you advice or counsel is not necessarily qualified to do so. The person giving you advice or counsel may assume that you understand how things are done in this foreign country. The person you are listening to may understand that you need to understand and they may be trying to help you. 

Market conditions may be very different from where you come from, so take the time to understand them before you make an offer.

Procedures for making an offer as well as the contracts used may be different. Learn what you should be doing and using to make an offer.

How do people negotiate in the market you are interested in buying?  Is there a rule of thumb for how much of a percentage you can expect to get off asking price or does it depend on each situation?

Carefully choose who you should represent you in an offer. Do they have the knowledge and patience to help you understand the process?

Do you understand what the documents, which you are going to sign say, and mean legally?  Have you asked what legal conditions are not necessarily in the contract? For example, is a condition you or the seller asking for not legal?  How are you legally binding yourself if you sign this offer? 

My opinion is that the average agent you will work with in any country will not know the answers to these questions for your protection. I believe strongly that you should have competent legal counsel when you are buying or selling property. You should have a bilingual, bicultural attorney assist you, in addition to your real estate agent.

What is common in your market of interest to put down to “bind” the offer?   How is safe title assured?  What are your closing costs as a buyer or seller?  What conditions are you agreeing to for recourse by the other party if you default?  Are properties bought “as is”?  Can you make an offer based on your agreement on any contingencies?  What should be contingences be? Can you require or negotiate a cost of repairs? Who is qualified to do an inspection? Are inspections the same as in your home market? Do not assume.

How do you take title to a property? Who is qualified to transfer the property and where is it done? Do you have to be present?

How do you send money for a purchase in a foreign country? What currency will it be in, who holds the funds until the title is transferred into your name?  When is the money sent?  How long does an average closing take? 

How do you make sure that the seller has paid his expenses before you own the property? Who makes sure this is done? What is common for the market where you are buying?

Can you obtain title insurance? How is this handled in a foreign country? Who can issue it and how much does it cost? 

How do you take possession? Are their occupants in the property now? What are your legal rights? What procedures will protect you against a problem with taking possession?

How will you maintain the property? Who will pay the expenses? Are you in a climate, which requires a certain system of maintenance and cleaning? What are the natural enemies to your asset? Humidity? Earthquakes? Fires?  High-water? Termites or other varmints? Whom can you trust? Why can you trust them?  What system for accountability have you worked out? What is a fair amount to pay for expenses and management?

How do you plan to use and enjoy your new property? What taxes do you owe for the property, what legal papers do you receive, and when do you receive them?

Do you owe tax if you earn a rental income? What taxes do you pay for your employees such as a house cleaner? 

Do you understand the difference in culture in the location of where you now own? Do you know how the concept of time is treated? Do you understand what problems exist and how they are solved? Do you have the patience and desire to learn a new set of rules? Do you have the desire to learn how to use “common sense” in solving problems and enjoying where you are?  Have you located yourself? Email to a friend

Harriet Cochran Murray
E-mail: harriet@casasandvillas.com

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