Posted on 14 February 2011
Use caution when buying property in Turkey says report
The number of foreigners purchasing property in Turkey has boomed in recent years thanks to attractive pricing in the housing market, especially in southern parts of the country, which have an excellent climate.
A report issued by the Land Registry Office indicates that Germans top the list of foreigners who own real estate in Turkey, followed by the British, Irish, Greeks, Danes, Norwegians, Austrians and Belgians.
Foreigners who want to purchase real estate in Turkey, whether it be a beach house or a villa, along the coast in southern regions like Aydin, Kusadasi, Didim, Antalya and Marmaris should be vigilant, experts say. There are scammers out there who will take advantage negotiate a reduced rate.
The Mediterranean and Aegean coastlines have always been attractive to both foreigners and Turks. Another thing you need be concerned about is property values. Property values are determined by the location and proximity to major roads and centers, the quality of construction, the size of the property and the compliance with regulations, such as meeting earthquake safety requirements.
As the number of foreign buyers in Turkey has increased in recent years, so has the number of unregistered and unlicensed brokers. “High returns on property investments are attracting foreigners as well as locals,” says Osman Coskun, head of the Didim Association of Real Estate Agents. Speaking to Today’s Zaman, Coskun explained that the fraud and forgery of unregistered brokers who take advantage of buyers victimize both licensed real estate agents and foreign buyers. The victimized buyers lose money while honest brokers are faced with the loss of both clients and public trust.
Most of the risks associated with the purchase of property through an unlicensed broker emerge when a buyer tries to transfer the title of the property. The buyer pays the broker’s commission, but the broker fails to deliver the deed. On other occasions, a property is sold to more than one customer at the same time. “A case occurred in the western town of Didim recently in which the same house was sold to eight different foreign clients at the same time. The case was taken to court, and the unregistered estate agent who committed the scam was taken into custody,” said Coskun.
In many cases, foreigners who come to tourist districts and resort towns are approached by the staff of cafés, restaurants, pubs and hotels. These people tell visitors that they have friends or relatives who own houses in the neighbourhood, adding that they will help them purchase the property with little or no commission. It turns out, however, that they sell the houses at much higher prices than market value, thereby raising their commission by a hidden 15 to 20 percent. Properties worth 100,000 or 150,000 euros are sold for over 200,000. They do not ask for a commission on paper, but they get it by overstating the value.
The problem also costs the government money because these unlicensed brokers are not registered with the Revenue Administration of the Finance Ministry. Their tax evasion results in great losses to the Treasury. Coskun cautions that foreign visitors should be wary of these kinds of scams.
Sometimes foreigners are scammed by other foreigners. Coskun notes that in some cases foreigners go to real estate agencies and introduce themselves as prospective clients, pretending to purchase real estate while actually selling the property to third parties at much higher prices. Such scams have soared recently.
Experts argue that foreigners should use common sense when they buy property in Turkey. They should see the property they intend to buy in person because photos can be misleading. They should not trust people they meet randomly and should only do business with reliable real estate agencies.
The Turkish Real Estate Federation, whose main office is in Istanbul, now has more than 50 branches and includes over 2,100 real estate agencies across the country. Prospective buyers can trust agencies involved with this federation. Government supervision of real estate agencies is hindered by a lack of qualified personnel in the field. Provincial directorates affiliated with the Ministry of Industry and Commerce handle problems with unlicensed real estate agents. If you were scammed by a dishonest real estate broker, you can get help by petitioning your local directorates or by asking local police to look into the matter.
06 October 2008 Todays Zaman