Buyers it seems don't trust overseas developers

[nickmarr]

A recent survey commissioned by IDIP the legal due diligence company indicates that investors buying off plan property abroad without formal background checks on the property developer are worried by their investment. The online survey asked 2500 investors about undertaking due diligence before investing abroad. It found that 90% of investors stated that they would buy the companies newly launched due diligence product before buying an overseas property .

International Developers Information Packs or IDIP is a new safe guard which allows investors to see financial reports, legal documentation & ownership details of the developer and development before they make a decision to invest.

Paul Owen, Chief Executive of Association of International Property Professionals, recently wrote to overseas property portal Homesgofast.com to clarify the AIPP position with regard to IDIP

'Good due diligence done on developments before they are even offered to the buying public is, undoubtedly, the quickest, simplest way to improve the international property market. It could quickly rid the market of its worst excesses. This has long been discussed by many people, including AIPP Members. We support the concept entirely and I believe it has the potential to fundamentally change this market. Like all good ideas, it is at best meaningless, at worst dangerous, without good delivery and it’s neither a simple nor a quick fix….To make it succeed, it needs to work for the industry as a whole and for the consumer”


The information packs come in a variety of levels and provide international real estate buyers with information that may help them make a more informed investment decision. The packs are also available to agents, who can feel 100% confident about the real estate they are selling to their customers.


Official Survey results of 2500 overseas property investors

40% of investors said they would order an IDIP before purchase.
10% of investors said they would not order an IDIP pre-purchase
50% Investors said they would prefer the Agent or Developer to provide the development with an IDIP in place

[catalogguy]

Developers should where possible rely on the use of escrows. In Mexico a developer can accept all deposits into an escrow account with a major bank. The reason to do this is that the developer arranges construction financing with the bank depending on is sales success. The developer negotiates a certain level of presales to trigger the financed funds. The bank manages the buyer escrow accounts and watches the sales progress. This is good protection for the buyers because they essentially have the bank as a partner making sure the project funds are available and are spent on the project.

Originally Posted by nickmarr

A recent survey commissioned by IDIP the legal due diligence company indicates that investors buying off plan property abroad without formal background checks on the property developer are worried by their investment. The online survey asked 2500 investors about undertaking due diligence before investing abroad. It found that 90% of investors stated that they would buy the companies newly launched due diligence product before buying an overseas property .

International Developers Information Packs or IDIP is a new safe guard which allows investors to see financial reports, legal documentation & ownership details of the developer and development before they make a decision to invest.

Paul Owen, Chief Executive of Association of International Property Professionals, recently wrote to overseas property portal Homesgofast.com to clarify the AIPP position with regard to IDIP

'Good due diligence done on developments before they are even offered to the buying public is, undoubtedly, the quickest, simplest way to improve the international property market. It could quickly rid the market of its worst excesses. This has long been discussed by many people, including AIPP Members. We support the concept entirely and I believe it has the potential to fundamentally change this market. Like all good ideas, it is at best meaningless, at worst dangerous, without good delivery and it’s neither a simple nor a quick fix….To make it succeed, it needs to work for the industry as a whole and for the consumer”


The information packs come in a variety of levels and provide international real estate buyers with information that may help them make a more informed investment decision. The packs are also available to agents, who can feel 100% confident about the real estate they are selling to their customers.


Official Survey results of 2500 overseas property investors

40% of investors said they would order an IDIP before purchase.
10% of investors said they would not order an IDIP pre-purchase
50% Investors said they would prefer the Agent or Developer to provide the development with an IDIP in place

[TH4S]

Question time, nickmarr,

1,
What is the full cost of a overseas agent/ agency to join the Association of International Property Professionals,!

2,
What would the agent/ agency get for it's money,!

3,
Who is going to do these 'checks on new developments; before they are even offered to the buying public,!

4,
What is the cost to the genaral public for this,information pack,

İf this IDIP is a way forward to stop people from being stung or ripped of by the,( bad) developer's, i am all for it,

İf its another little certificate/ banner,to put on my web site,thats going to cost me a lot of money forget it,

I will continue to check all the new developers myself prior to advertising there property's,and check the legal owners tapu( deeds)then and then only will i pass new developers to my uk agent's,

A recent survey carried out here in Turkiye,stated if you use a good solicitor they will also carry out all checks on new developments,

[nickmarr]

[quote=TH4S;10342]Question time, nickmarr,

Hi I understand your concerns. I have been approached myself by various trade associations with huge fees with the offer of a logo for my money.

IDIP is a new safe guard which allows you to see financial reports,
legal documentation & ownership details of the developer and development before you make that decision to invest.

I believe IDIP is going to change the way people buy off plan property abroad.
This is a serious legal product backed by a multi national company.
It has real teeth and is causing a huge stir in the overseas property industry.

For the first time consumers, agents and developers will have checks undertaken to a legal standard. These will be conducted by experienced lawyers covering regions worldwide.

Unlike trade associations who carry out simple checks on an agent to award them a costly badge this checks on each property development an agent sells. An agent of an association can pass the tests trade associations present and then simply sell anything to a consumer. The typical trade association member will not give guarantees backed by a huge financial insurance company.


IDIP will set apart agents and developers from the crowd In years to come investors will only want to buy from an agent or developer with IDIP. They have greatly reduced risk as the off plan property has been checked independently by reputable lawyers backed by insurance. Why should buyers go anywhere else?

My experience show that many investors will not invest in certain regions owing to the risk, this now reduces risk. This product will allow those investors the confidence to invest in more markets.

Some Agents who offer their customers off plan property abroad attempt to carry out their own due diligence. This can be difficult in some regions and many agents pay lip service to this.

IDIP makes due diligence a professional and secure method of checking on a developer and the development

Please visit homesgofast.com and look for IDIP logo for more info.




1,
What is the full cost of a overseas agent/ agency to join the Association of International Property Professionals,!

Answer: To become a member of the Agents IDIP Federation you have to agree to have an IDIP carried out on every development you offer IDIPs start from £600.00




2,
What would the agent/ agency get for it's money,!

The security that all your developments are 100% what they say they are. Imagine years of building a good reputation destryed by one bad developer. You will have a huge selling feature to your clients. You will not get sued by consumer if a development you promoted turned out to be a scam.
Legal and financial services unique to IDIP. Lawyers invloved in buying process cannot give guarantee or the breadth of information availble with IDIP. These are carried out before you part with money not after.



3,
Who is going to do these 'checks on new developments; before they are even offered to the buying public,!

Answer: This product is managed by Live Organisation an appointed representative of First Title Insurance plc which is authorised and regulated by the Financial Services Authority. First Title Group is a wholly owned subsidiary of The First American Corporation, they not only have the backing of the world's largest provider of business information, but over 115 years experience in property matters.



The lawyers conducting your IDIP are carefully vetted to ensure they have:

* Knowledge of the local market
* Extensive conveyancing experience
* Excellent client references
* Competitive rates
* A personal approach backed up with high customer service standards
* A UK presence
* Online tracking service technology

4,
What is the cost to the general public for this,information pack,

Answer: There are three types of IDIP starting at £600 for a basic IDIP to a full IDIP at £1100. This provides:


A full company search will be carried out, going into Directors, share holders, state of the company etc. the lawyers will request information from the developer, these to include references and follow these up , they will look into any inconsistencies between the information provided and the information on the company search and will request missing documentation The lawyers will give a full report on their findings but will not pass judgment on any of the documentation provided nor will they give their opinion on the developer.

[TH4S]

To become a member of the Agents IDIP Federation you have to agree to have an IDIP carried out on every development you offer IDIPs start from £600.00

£600 every development,do we then pass this cost on to the client,!

The future investor, is aready going to be paying you from £600 to £1100 for a information pack,


Nick,
You have said your self and i qoute( it will only greatly reduce the risk)

There is no mention of these lawyer's speaking a different language,are all these lawyers going to based in the Uk,!

All the foreigners i deal with are adviced prior to purchashing land/property,in Turkiye to use a good local solicitor,the local solicitor will also check out to see if the deeds( tapu) to the land or property,are original or not,!!

In years to come investors will only want to buy from an agent or developer with IDIP.!

I heard the same,years ago from the NAEA,
I actually wrote a article for there magazine, and they gave credit to some somebody else,

My experience shows foreign investors in Turkiye will continue to buy the way they have been correctly adviced to,

Please see this i post dated 09-11-2006,!!

Turkish property to make Top 5 in 2007,
Based on broad economic and political analysis of the country, property investment experts Amberlamb believe the Turkish property sector is on track to become one of the top five performing European markets in terms of capital appreciation in 2007...

A series of fundamental fiscal and political changes in Turkey is set to boost international confidence and direct investment in Turkey's property market in 2007, according to Amberlamb.
Furthermore, as Turkey proved earlier this year with fundamental improvements to the rights of foreign buyers of property in Turkey, the nation is working to improve the rights of foreign citizens wishing to invest in land and real estate in Turkey and it is working to improve transparency in law and bureaucratic processes to this end.

The positive legal changes to the rights of foreign buyers of property in Turkey that were exacted in January 2006 have so far resulted in excellent levels of buyer confidence in the Turkish property market and over 6,000 sales of property to overseas buyers were finalised between the law change in January and July 2006 alone.

While the appetite for foreign second homes, holiday properties and investment assets remains strong and European economic and interest rate environments continue to be kind to investors, the Turkish property sector will continue to expand, says Amberlamb. The property investment experts point out that Turkey is currently on target to return in excess of 12% capital growth in 2007 putting it well within the top 5 European nations in terms of real estate appreciation potential.EU membership on the horizon?


http://www.propertycommunity.com/forum/turke...-5-2007-a.html

Turkish banks are now offering foreigners mortgages,they are not going give a mortgage on a property without checking out the developer's first,



Nick,ps,
The First Title Group web site www.first-title.co.uk/Home.aspx as a link to The First American Corporation,,it dont work,Service Unavailable,!!!

[nickmarr]

Hi
A network of specialist lawyers around the world will take the worry out of buying a property overseas. Starting with the IDIP report . The key benefit is that these lawyers are local and independent which is important in countries where the culture, language and legal processes become barriersThe lawyers are all approved and local so language , local practices are not a problem.

A typical IDIP buyer will probably be an investor spending thousands of pounds so £600.00 to make them make an informed decision is worth the expenditure. A recent client is typical, a UK investor buying multiple off plan property in Mexico he had concerns about the company, and felt unsure about giving his deposit.How else would this guy undertaken his due diligence, IDIP will help this buyer feel more confident.

Developers have the choice to take out an IDIP and submit themselves to scrutiny. I think this would be a great way for them to sell thier properties.

This is here to help people and is a positive development and a choice for agents and developers.

Hope this clears up some of your questions , please contact me direct to discuss in more details

Kind regards

Nick

[TH4S]

Originally Posted by Sunny Days,08-07-2007, 08:08 AM

IDIPS - agents and investors - can we discuss?
Hello All,

I'm looking for some thought provoking responses here (please!).....
I am an agent / developer in Turkey.
I have been considering the IDIP - but in my case I think I need 2 accredditations (one as a developer and one as an agent). Urghh! This is gonna get VERY costly and I'm not at all convinced of the benefits.....

We already carry out a platinum class service for our clients / investors (in my opinion!...and that of our happy customers). We are a licenced estate agent and we use solicitors for all foreign buyers (Turkish customers don't usually want a solicitor). Being licensed estate agents means that the licensed individuals are qualified to carry out conveyancing and as an extra security blanket for our foreign buyers they have a solicitor of their own to do the work (again) for them....

So here, comes my point.....
what does the IDIP offer an agent or a developer (apart from a very expensive badge)...can anyone shed some light please?
I am of the impression that foreign buyers don't seem to know anything about IDIP (hopefully, I'm wrong), hence if we go in for the scheme it isn't going to re-assure any buyers if they don't know what it is.....

I am considering IDIP as I believe it will become important to overseas buyers as the UK press and victims of property scoundrels continue to tell the bad news stories, back in the UK (and elsewhere). I want my organisation to be recognised as better than the average operators in my area and there will come a point in time where the average buyer will be saying the IDIP name as he considers an overseas purchase....until then...any views on joining the scheme....?

Is it just "money for the boys"?...
All the figures I've seen to date are in UK pounds - therefore is the product Anglo-centric?
Are there no variations in charges, in line with currency values? ie the UK pound is a lot stronger than a lot of the currencies this product is marketing at....
Will my organisation benefit from handing over several thousand pounds for a wee little logo??
Views from non-agents and non-developers would be welcome...

Hope to get some feedback from you soon.
Thanks.
Sunny Days

[Goldberg Global]

I agree more with Tommy than with Nick.

Nick I think your points are valid, and are "ideal world stuff", but reality dictates.

All buyers should get independent legal advice prior to purchase. They pay for that, that is a protection mechanism, second, as an agent, we are only going to sell good things, we want our clients to come back, third by getting mortgage finance on developments, you have a third tier of safety.

I think to put this burden of costs onto a developer or an agent to complie to your private organisations inhouse due diligence report is a non realistic business.

The charges 600 to 1100 pounds sterling to be paid to a third party private company to check out yourself out is non sensical and unrealistic. You are paying to get a badge, a logo, a stamp from the AIPP. The reports and DD are a profit center for the AIPP.

If it was done by a government body and was statute, but not a private company then maybe it has substance and is for the good of people, but as a revenue stream for your organisation it a commerical thing, and looking at profits over the welfare of people.

*i agree due diligence should be done on all things. But to have your guys in London or where ever to do checks at agents and developers expense is not in the real world.

Big developer will say AIPP who are these people, agents will scoff, and ask AIPP, what is it all about, what does it cost to join, what are people getting for this membership a logo. It resembles what happens in the recruitment industry, lots of badges, but some of the members are the "whores" of the business. The people who would sell their own grandmother!

Word of mouth and referral business brings in results, not pay to join club memberships.

Bureaucratic and back slapping. This is a pay to join club, and like many organisations does not address the real questions in real estate. And you expect people to pay more than they already do.

I work in the real world where people dont have 600 or 1100 to start spending on all things to go to a private company to check them out.


Good idea in theory, the implementations I have a problem with, a private profit making organisation charging high prices to do due diligence that is already done by lawyers around the world, that is what you pay them for.
Price rising and bureaucratic.

Why dont you ask buyers to pay for your service? Because they would not pay it!
So you are asking sellers to join your club, and have them pay handsomely for the priviledge.

I believe what happens in Dubai is a good thing, where every development is registered on a central role, which shows which stage of construction it is on. Each must be registered and correct to get onto the list.

This is free from bias. It is also FREE of charge.

The spanish government were looking into it. Let the governments roll in the regulations. Private industry is to make profits. And AIPP is looking to do the same, under the guise of " working for the good of the people ".

Due diligence is good.
The truth is to find a fair and responsible way for these reports and for it not to be in a private profit making organisations hands. This is the recipe for problems.

The upshot is that AIPP do Due diligence.
Then company aBC do Due diligence reports
Then company DEF do it, and say there DD is better than the above etc etc etc

It has to be laid down with statute, what is DD. Who controls it. A central register of legal projects. The only people who grant this is the government themselves, they decide what projects are legal or not. They are the ones who should do this.

In my opinion.

[Goldberg Global]

This whole thread is to promote your product.

I think what you say is non sense Nick

Why?

Because more and more people are buying overseas property every year. So to say buyers dont trust overseas developers contradicts to what they do!

.................

[nickmarr]

Goldberg Global Thanks for your response you are obviously experienced in the market and its good to discuss these issues.I think you may well be missing the point.

As an agent I assume you undertake due-diligence on all the off plan developments you offer and that you are happy with the procedure you follow?

However for many other agents and consumers they cannot visit the country, consult with the local planning office, verify the fact that the developers owns the land, check details of planning permission and has the funds to build the development.

Unlike yourself many investors are not fully aware of the legal aspects re the sales and purchase agreement of the developments that are being offered. Furthermore agents and buyers are not aware of the the law in the country regarding restriction regarding short and long term rental. These restrictions can be crucial in the decision to invest.


I am also in the real world and in my experience most agents have taken the word of the developer and asked them a number of questions to which the replies form the sales offer to their clients.


OK you will say that’s for a lawyer to sort out, well that’s where the problems start, buyers are buying on the word of the agents, and the information provided by the developer. Once they have purchased they then in some cases get a lawyer involved and by then have paid a non refundable deposit and entered in to an agreement to purchase.

IDIP is an information gathering tool for those who wish to be informed independently before purchase or before they offer the product to the public. The lawyers gather the information it is then the investors choice to go ahead or the choice of the agent to continue promoting the development.


All your potential buyers have access to carry out an IDIP on any off plan developer in the world. Many are already doing so, If one of your developments has an IDIP done on it by a potential buyer and that buyer finds that what you are saying is different this is a danger to your reputation , your business and could possibly even present legal problems for you.

If the developer does not have planning permission, or an escrow, or full title etc do you think that this will affect your company?

IDIP like it or not is available and being used by lots of agents who feel that they need to increase the legal independence of the information they provide. Property developers are also looking to have their development verified to enable buyers to have more confidence .

The public want this and the response to IDIPs has been very positive

More agents are now using the system and the information in the IDIP forms a crucial part of the buying process, it is a worthwhile product

After all in a recent YOU GOV POLL for the tonight programme the following information came out

A YouGuv Poll for the Tonight Programme found that 77% of people questioned don’t trust agents they thought they were more interested in profit and 54% thought they were dishonest

I hope this clarifies the IDIP

Kind regards

nickmarr

Originally Posted by Goldberg Global

I agree more with Tommy than with Nick.

Nick I think your points are valid, and are "ideal world stuff", but reality dictates.

All buyers should get independent legal advice prior to purchase. They pay for that, that is a protection mechanism, second, as an agent, we are only going to sell good things, we want our clients to come back, third by getting mortgage finance on developments, you have a third tier of safety.

I think to put this burden of costs onto a developer or an agent to compile to your private organisations in house due diligence report is a non realistic business.

The charges 600 to 1100 pounds sterling to be paid to a third party private company to check out yourself out is non sensical and unrealistic. You are paying to get a badge, a logo, a stamp from the AIPP. The reports and DD are a profit center for the AIPP.

If it was done by a government body and was statute, but not a private company then maybe it has substance and is for the good of people, but as a revenue stream for your organisation it a commerical thing, and looking at profits over the welfare of people.

*i agree due diligence should be done on all things. But to have your guys in London or where ever to do checks at agents and developers expense is not in the real world.

Big developer will say AIPP who are these people, agents will scoff, and ask AIPP, what is it all about, what does it cost to join, what are people getting for this membership a logo. It resembles what happens in the recruitment industry, lots of badges, but some of the members are the "whores" of the business. The people who would sell their own grandmother!

Word of mouth and referral business brings in results, not pay to join club memberships.

Bureaucratic and back slapping. This is a pay to join club, and like many organisations does not address the real questions in real estate. And you expect people to pay more than they already do.

I work in the real world where people dont have 600 or 1100 to start spending on all things to go to a private company to check them out.


Good idea in theory, the implementations I have a problem with, a private profit making organisation charging high prices to do due diligence that is already done by lawyers around the world, that is what you pay them for.
Price rising and bureaucratic.

Why dont you ask buyers to pay for your service? Because they would not pay it!
So you are asking sellers to join your club, and have them pay handsomely for the priviledge.

I believe what happens in Dubai is a good thing, where every development is registered on a central role, which shows which stage of construction it is on. Each must be registered and correct to get onto the list.

This is free from bias. It is also FREE of charge.

The spanish government were looking into it. Let the governments roll in the regulations. Private industry is to make profits. And AIPP is looking to do the same, under the guise of " working for the good of the people ".

Due diligence is good.
The truth is to find a fair and responsible way for these reports and for it not to be in a private profit making organisations hands. This is the recipe for problems.

The upshot is that AIPP do Due diligence.
Then company aBC do Due diligence reports
Then company DEF do it, and say there DD is better than the above etc etc etc

It has to be laid down with statute, what is DD. Who controls it. A central register of legal projects. The only people who grant this is the government themselves, they decide what projects are legal or not. They are the ones who should do this.

In my opinion.