Greece Real Estate Purchasing Procedures

The first stage in the conveyancing is to sign a Sales Agreement and pay a deposit – usually 10 percent. This agreement contains the names of the parties, a description of the property, the price, the method of payment and any special conditions negotiable in the purchase process.

The vendor will then be instructed to take the property off the market whilst your appointed lawyer completes the purchase transaction. Under Greek law, no contract is enforceable unless it is in writing, It is important therefore that once an offer has been made and accepted all purchase documents are checked by a lawyer before signing to ensure that the vendor has rightful title to the property.

Losing your deposit

If you do not go ahead with buying the property after you have paid your deposit, you will forfeit it and face potential legal action from the vendor. However, if the vendor pulls out of the deal after receiving your deposit, you are entitled to claim a return of double the deposit in compensation. The compensation will not affect your statutory rights to legal action against the vendor for breach of contract.

Finding the Experts

You will undoubtedly need a good team. You will need a:

• • bi-lingual agent
• • notary public
• • lawyer
• • banker.

Liaising with an agent

The agent will normally barter the purchase consideration on your behalf. If you choose to attend this ritual, be prepared for a long duration as the relevant merits of the family, the property, the village/town, etc. are proudly promoted by the seller. When the shenanigans are finally over, and a price is agreed upon, the “ouzo and mezedhes” (these are traditional drinks and food for a kind of celebration, which is a small sign of the famous Greek hospitality) will appear and suddenly everyone will be part of one large happy family, with promises of much merriment and rejoicing. The agent, in coordinating the purchase process, is also likely to establish via the lawyer who the owners are of the adjoining properties. The boundaries are then fixed by topographical survey. Such a survey carried out by an expert could cost in the region of €150.

Appointing a notary public

Your first experience of this official will be the visit together with your agent to sign your Sale Agreement using the Greek bible as the swearing oath. The notary public works with your lawyer to ensure that the contracts are drawn up in an orderly fashion and presented to the taxation authorities on time. Before any transaction takes place, your lawyer will carry out searches with the Land Registry. The notary public will not proceed with a contract concerning a property which does not have a clean title, free of mortgage obligations, etc. You will normally be expected to pay a fee of up to 1.6 per cent of the ‘notional value’ of the property as recorded in the Contract of Sale.

Finding a lawyer

A good, English speaking, well-qualified conveyance solicitor is absolutely essential. The lawyer will draw up the Contract of Sale on your behalf, in Greek, arrange the signing ceremony with the vendors, normally at the office of the local notary public, and also negotiate the purchase tax with the local taxation office. You should allow 1-1.5 per cent of the purchase price for this service.

Money

Getting a banker

The vendor will probably require payment in euros. You will have opened a euro account in preparation at either a private or national bank. Normally, your bank will arrange to pay the vendor a ten per cent deposit at point of signing contracts and allow a further 15-20 days for the remaining consideration to be settled, although the settlement period can vary per transaction. Your choice of banker will depend on day to day considerations such as location, connection with international banks, opening hours, etc.

All titles are in the Land Registry Offices and most of the disputes and arbitrations are between the Greek Church and the Government for past unsolved settlements. There is a recent dispute between these two parties because the Greek Church do not want to pay property taxes.

Regulation

Land use regulation are clear and most of the problems and issues arise in cases of land with forest inside or land with illegal buildings in it. In these two paradigms the law is strict but simultaneously, a potential property investor must know that the corruption of the public services is still high.  Construction rates has been decreased significantly in the last 5 years, mainly, due to the unexpected increase in the building permission licenses and the low house demand levels.  Most of the house are not under an insurance contract but things seems to be changed in the last decade and many people are more willing to pay a property insurance.

There are many broker agents but a small percentage can be characterized as professionals with in depth in knowledge.  Some of the international property consulting firms have also opened representative offices in Greece, most of them under the franchising system and rules.  Royal Institutes and American Appraisal Institute has a low profile presence in the last years.

The Greek property market can be characterized as stable at the moment, but truly speaking, there are always the “Traditional Investors and Buyers”, those that are strongly believing that Greece, with Acropolis and Parthenon, with the most beautiful and idyllic islands for a majority of people, has something unique. In other words, lots of investors are looking for a house or a piece of land in a Greek island or across the endless coastlines. The drop in the house demand levels,especially in the big cities, are inter-related with the adoption of strict bank loans policies and as a result, fewer property buyers have the money to invest, or to buy a house.

In the commercial property market, vacancies rates are high, 30-40% of the new buildings are not under a lease at the moment. Most of the home buyers are looking for second hand homes to buy or they tend to agree to buy a new house with at least 20 square meters (one room less then) smaller than in the past. Now,the average home for a Greek family is 80-90 sq.m when before 5-8 years was 100-110 sq.m. The strong financial asset for most of the Greek families is the home ownership rate which is around 85%.

A property investor can expect annual property yields such as the below:

• houses: 2.6-4%
• The small houses (30-45 sq.m.) has 7-9% yield annually.
• offices:6%
• stores:6-7%
• warehouses and industrial buildings: 8%