Turkey Property Buying Guide
What should I bear in mind when looking for a property in Turkey?
The first point to bear in mind is that Turkey is a "new" country as far as the overseas property market is concerned. Buying a property in an emerging market country such as Turkey is not the same as buying a property in, say, Spain or France. In those countries, millions of foreigners have already bought homes. As a result every notary, land registry, tax office, town hall and lawyer has dealt with hundreds of them. So everybody knows what to do. This is not so in Turkey. You could be the first foreigner this official has ever dealt with. This can lead to delay, confusion and frustration. If you deal with the wrong people or buy the wrong property it can also lead to danger. You are a pioneer! Pioneers enjoy lots of benefits by being early in the market but they must expect the road to be a bit bumpy.
The system has been designed to bring you the maximum possible safety and security - and to eliminate the danger and minimise the bumpy bits!
What are the main dangers when buying property in Turkey?
Does the property have legal title, planning permission and building consent?
In Turkey there are huge numbers of properties that have no title, no planning permission or are illegally constructed. According to the Turkish Daily News (14th January 2004) there are 600,000 illegal houses in Istanbul alone! That is 60%.
The developer guarantees that when you receive your property it will have full legal title, planning permission and the appropriate building permit. None of your money will be released to Developer until either they prove they have title to the land they are building on and that building licences have been issued or you have mortgage security to the value of the money paid. For your safety, your deposit will be held by their solicitors 'in escrow' (see below for the meaning of this) until this has been done.'In escrow' means that the lawyers hold the money and can only release it if certain conditions are met.
Does the property have full title?
There are various types of "title" in Turkey, some of which give you only the right to occupy land or transitional/provisional rights, rather than full ownership. The developer guarantees that your property will have a full (kat mülkiyeti) title.
Is the property affected by debts?
All properties will be delivered to you free of debt.
Is the property built in an area zoned for individually owned homes rather than, for example, hotel style developments?
The developer guarantees that your property will be zoned for individual residential occupation (mesken amacli), not as an area reserved for tourist lettings only (Turistik amacli pansiyon, otel vb.). Special dangers when buying new properties
What happens if the builder goes bust?
In many countries, where you pay all or part of the price before the property has been fully built, the law requires that the property must have the benefit of a bank guarantee to ensure that, if the developer goes bust before the building work is finished; you do not lose your money. This is not the case in Turkey and most developers offer you no guarantee of any kind against this risk. The system gives you full security for the money you have paid.
Is the building specification of what you are buying clear?
The contract explains clearly and fully what you will receive.
What 'common facilities' are to be provided and how are they going to be managed?
In the contract all of the common facilities (such as pools, gardens, parking areas and lifts) are clearly listed and you will enter into a contract with the developer to maintain those facilities for a fixed price for an initial period of two years. After that time the residents will, together, be able to choose whether to continue to use the developer to manage the property or to appoint another management company.
Pressure Selling
Some sellers in Turkey pressure you to sign full, binding, purchase contracts as soon as you decide to buy a property. With Elegant Homes Worldwide, you will only sign a Reservation Contract. See below for more details of this important safety measure.
What is the process of buying a Property in Turkey from Elegant Homes Worldwide?
1. The Reservation Contract
When you see a property that you want to buy you will be given the opportunity of signing a Reservation Contract. When you sign the Reservation Contract you pay a Reservation Deposit of £2,000. Once the Reservation Contract has been signed by the Buyer & the Seller the property will be taken off the market so that your lawyers can carry out the necessary checks on the property to ensure that everything is in order. Your £2,000 Reservation Deposit is made payable to Elegant Homes Worldwide who will pass the Reservation Deposit to the developers solicitors who in turn, will hold it in escrow (see above for the meaning of this) until you sign your Preliminary Purchase Contract (see below for what this means). If you sign the Preliminary Purchase Contract the Reservation Deposit will be dealt with as stated in that contract. See below for more details of the various types of contract available. If your lawyer discovers any problem with the title to the property or its planning status and you decide not to go ahead with your purchase or within 14 days of being provided with details of the development site and site location you decide not to go ahead your Reservation Deposit will be returned to you. If you simply change your mind about the purchase other than for these reasons and/or causes 9.1, 9.2, and 9.3 of the Early Bird Investor Reservation contract you will lose your reservation deposit.
2. The Preliminary Purchase Contract
Once you are 100% happy that you wish to go ahead with your purchase you will sign a Preliminary Purchase Contract. This is, in many ways, similar to the contract you might sign in England when buying a house. It commits you to the purchase of the property. When you sign the Preliminary Purchase Contract a further payment is made. How much depends on the purchase method you have chosen.ie 100% upfront or 30% stage payment
3. Security for the money you have paid
Depending on the purchase method you have chosen, the developer will issue you with security to guarantee the safety of the money that has been paid to them.
4. Stage Payments
Under the 30% down purchase option you will be required to make further payments as the building work progresses and/or when the property is finished. The payments will be 30% on completion of shell, 30% on completion and 10% after taking the keys and the correction of any small matters needing attention.
5. The Deed of Sale (tapu)
When the building work is finished the property will receive an official certificate confirming satisfactory completion of the building work in accordance with the building permission granted and you will sign the Deed of Sale (tapu) transferring ownership into your name. This is, generally, signed at the Turkish Land Registry responsible for the area where your property is located. Many people prefer to give their lawyer a Power of Attorney to sign this document on their behalf as this saves a journey to Turkey, often at fairly short notice. At the same time as the tapu is signed you pay the various taxes and fees associated with your purchase. A general guide is to allow 5% of the purchase price for fees and taxes, but your lawyer will give you a detailed estimate of these expenses.
Loans & Mortgages
Mortgages from Turkish banks are not, generally, (May 2005) available for non resident foreigners buying property in Turkey, so any borrowing will have to be against other properties - usually your home in the UK - or by way of personal loan in the UK. Turkish mortgages are likely to become available in due course. Your lawyer will be able to advise you as to the current position.