The Ins and Outs of Foreign Real Estate Contracts

Buying property abroad can be exciting. But unfortunately, all too often we hear some variation of: “I jumped in a little too early without thinking it through.”

One of those oversights starts right at the beginning – when entering into a long-term agreement to buy a pre-construction property.

There are a few reasons for this:

• Many popular spots (Mexico, Costa Rica, Panama, Spain, Italy, Portugal, etc.) all operate under a different type of law (called “civil law”) compared to what we’re used to in the US (called “common law”). This often brings in concepts unfamiliar to most Americans.

• Pre-construction contracts in other countries are a lot less flexible than in the US or Canada, meaning it’s critical to plan before you sign.

• People don’t often think through how they plan to use the property once delivered… and in many places, there are important restrictions that affect how you’re allowed to use it and what licenses you need to do so.