Ten steps to buying property in Greece


Doorsteps agency helps buyers in Greece identify property risks and make better decisions

If you’re thinking of buying a residence in Greece, this article sets out 10 essential must-knows when buying a home on Greek land, whether in a city, in the countryside or on an island. Often is the case that buyers are interested in Greek real estate but get put off in the process because, truth be told, it can be confusing and overwhelming.

Step 1: Determine where you want to buy
Perhaps there’s an island you can see yourself living on. Or maybe you prefer a city or the mainland. The first step is to look at properties in your region(s) of interest. HomeGreekHome and XEproperty are two such sites that show you properties in every region across the country. Some key elements to consider are airport access, climate, distance to seaside, local cuisine, architectural preference, crowded versus isolated regions, health and wellbeing facilities, shopping districts, and other personal tastes.

Step 2: Determine the market value
You’ve found a home in the region of your interest and decided it meets your needs and caters to your likings. You’d like to make an offer. Next, it’s important to understand that the listing price is different from the market price. What you see on the ad is the listing price which may or may not reflect the market price. Either way, if you know the market value of the residence you want to buy you’ll be in a better position to negotiate.

So, how do you find out the market value of your residence of interest? There are two ways. You can do your own research by comparing properties of similar profiles and draw your own conclusions. Or you can hire an independent valuer, which is the recommended way forward. At Doorsteps we offer a full market valuation report which includes the property’s market value, a market analysis of the region and the most recent local data, all within 24 hours – for every property of interest and for a minimal fee.

Step 3: Price negotiation
Once you’re well informed of the property’s market value you will begin to negotiate on the price. You can do this yourself or hire a third, independent party to negotiate on your behalf.
* Optional but strongly recommended: If you’d like to know the state and quality of the home you’re considering buying, you can request an inspection report. An engineer will visit the property and inspect all exterior, interior, structure, electrical, plumbing, heating and ventilation systems. Then they will draw up a report on the overall state of the home, raise your attention to any safety issues or necessary repairs and they will estimate the cost of any renovations, if needed. An inspection report will also put you in a better position to negotiate on price if the home is in need of fixtures which are not obvious to the naked eye.

Step 4: Purchase agreement
You’ve agreed on the price. Step four consists of drafting a pre-contract, otherwise known as a purchase agreement, which is not mandatory in Greece but highly recommended to protect the seller’s and buyer’s interests.

What is a purchase agreement? It’s a document that essentially removes the property from the listings, lets the seller know that the buyer is serious, and includes all the terms and conditions that must be respected throughout the purchase process. The buyer will need to hire a lawyer, at their own expense, to draft the purchase agreement. At this stage, anywhere between two to five per cent of the negotiated purchase price must be paid to the seller as a deposit, up front, which will then be deducted upon full transaction. If you don’t know where to look for a lawyer start with the Greek embassy of your home country. Embassies have a list of qualified lawyers and professionals that you can liaise with. Or you can conduct your own research locally or online.

Some clauses that must be incorporated in the purchase agreement are:
– the property’s title is free of any restrictions or liens otherwise the deposit will be returned to the buyer;
– the timeline and next steps until purchase completion;
– what happens to the deposit in case of non-compliance with the clauses in the purchase agreement or if the seller changes their mind.

Step 5: Legal due diligence
This is the buyer’s responsibility. The lawyer that you hired in step four will go to the local land registry where all the title deeds of the area are kept on file. Here is where your lawyer will confirm if the property truthfully belongs to the seller and is free of any obligations such as loans, repossessions etc. An average fee to conduct a legal due diligence for an apartment in Athens is roughly €300-400 and is at the buyer’s expense.

Step 6: Technical due diligence
While the legal due diligence is the buyer’s responsibility, the technical due diligence is at the seller’s expense. The seller must provide the buyer with copies of all updated topographic diagrams and architectural plans of the property. It is quite common for illegal building works to Greek properties to exist, such as prohibited extensions or added spaces that were never included in the initial architectural plans. Fortunately, the law prohibits properties with illegal building works to be sold and it is the seller’s responsibility to make sure that his property’s illegal additions, if any, have been settled at the local tax office. As mentioned, the technical due diligence is the seller’s responsibility, but nonetheless it is advisable that the buyer hires an independent civil engineer to double check that all diagrams and plans are in order and that any illegal works have been successfully dealt with. A civil engineer will charge, on average, €200-300 to verify the property’s technical documents. It’s worth paying for peace of mind.

Step 7: Funds transfer
Every title holder of Greek property needs to have a VAT number. To obtain a VAT number, you must present yourself to the local tax office that covers the area in which your property belongs to. At this stage the buyer transfers the remaining purchase amount (minus the deposit) to the seller’s account.

Step 8: Property tax
The tax rate when purchasing a property in Greece is a flat three per cent of the purchase price. Up until 2013, this was ten per cent, hence a significant decrease since then. So if the purchase price is €100,000, the property tax to be paid on top of the purchase price will be €3,000, thus a final price of €103,000. Equally important to mention is that for all properties with a building licence issued from 01/01/2005 onwards, an additional 23 per cent VAT will apply, therefore raising the final price to €126,000.

Step 9: Completion
It is the buyer’s responsibility to hire a notary for completion. Completion involves transferring legal ownership of the property, checking the legal and technical due diligence, confirming the money transfer and signing the final purchase contract. A notary’s fees can vary anywhere between one per cent and 0.1 per cent depending on the purchase price of the property. For a €100,000 property, a notary’s fee is €1,000 (one per cent of purchase price), for a property worth €200,000 the notary’s fee is €1,760 and for a €300,000 property the notary’s fee is €2,460 (0.8 per cent of purchase price). This excludes VAT (23 per cent). Overall, the notary’s fee drops as the purchase price increases.

* Also recommended but not mandatory is for the seller to ask their lawyer to represent them before the notary to make one last deeds check before the final contract is signed. In that case, the lawyer’s fee will be approximately one per cent of the purchase price minus the amount already paid for the legal due diligence.

Step 10: What happens after completion
After completion the buyer will have to hire an accountant that will determine the yearly property ownership tax (known as ENFIA in Greek). The amount will depend on the size of the property, its location and the year its building permit was issued. For a modern holiday home of 200m2 a standard amount for the yearly property ownership tax is €900 per year. For a 100m2 home, the tax rate drops to half and an average of €450 per year applies. For a small 50m2 apartment the tax is €250 per year.

Is this a good time to buy?
Property prices in large cities will continue to drop as supply still outstrips demand, so if you’re looking to buy in Athens or Thessaloniki, wait. If the islands or tourist areas interest you, it’s likely that prices will begin to increase as Greece has become a popular tourist destination in recent years.
If buying a residence in Greece is a dream of yours but the process still seems daunting, Doorsteps offers three simple services:

Property valuations: Learn the market value of any Greek property in one working day.

Property inspections: Book an appointment to learn the true condition of the structure, needed repairs and how much the renovations will cost you.

Closing management.

For more information head to www.doorsteps.gr

Source: Neos Kosmos

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