Buying a House

I've bought, sold and rented. Worked for Agents photographing properties. Worth reading.

Buying and Selling a House on Crete.

Date: 18/03/2019

Contributor: Terry Bridge.

Generally speaking, buying a house on Crete is easy. If you have all the right people in place, know the property you wish to purchase and have sufficient funds it can be quite painless. May seem a bit glib, that statement, but it is true.
Having bought and sold several houses in the UK and wrestled with mortgages, planning permissions and building regulations and the bureacrats that administer to them, I preferred buying in Greece.
Now, selling is a whole different story, especially if your property is on a shared plot, which many are, and if your house has not been legalised, you should think very seriously about when you wish to sell or the property is to be passed on to your heirs before buying that dream home.

A little time spent talking to people who KNOW and reading articles, written by people who KNOW, can smooth the process. The following information is correct at time of writing. I will only write about cash buyers as the mortgage situation in Greece is something I know very little about. The information also refers to Crete, as I am aware that the islands do differ slightly in their regulations.

Buying that dream house on a Greek island:
 

The first thing you must do is visit Crete several times, even in the winter if possible. You need to be sure that Crete is for you. Even if you are buying to let you still need to know and like the area.  I visited Crete five times and talked to people before I even considered buying.

Crete is a beautiful island and many places are open all year round, especially on the north coast. This was the main reason for a huge influx of buyers from the UK, Scandinavia and many European countries. Construction companies sprung up, many of them with little experience and of dubious character. Mainly, the finished product was OK.

If I was asked for the best advice, which of course is something that we didn't get, I would say that you should rent a property first. If it's a buy to let, then a few holidays out of season would be ideal. If you are thinking of living full time, then rent for at least a year, through the four seasons, before looking for your ideal home. You will find out so many things that will stand you in good stead if and when you buy a property.
I'm not trying to put anyone off the idea of buying a house on Crete. I love the island, the people, the food and the weather and owning a house on Crete is a great idea.

The Process:

I am presuming you have done all the above and set your heart on owning that villa in the sun. The process below does not account for building off plan, which you can find here. I am also not including any information for buyers looking for a Golden Visa.

  1. It is advisable to buy a property through a reputable estate agent. If you do not speak greek, it is most usual that the estate agent will. If the house is new you will probably be buying from a builder or if the house is older then probably from an individual. It is most usual for the estate agent to act for the buyer and the seller and to collect both sets of fees, usually about 2.5% of each price. As you can see from this set up it is very important to get a good lawyer.
  2. Slightly different from the UK, the learned person is a lawyer, not a solicitor. Engage someone who comes recommended. If you have carried out my advice prior to this process you will be armed with the required information. Do bear in mind that Crete is a small island and all of the professionals will probably know each other. The lawyer will know and engage the local Notary who is required for every part of the buying process as all signatures have to be notarised. If you haven't rented a property on the island then you won't have a bank account. You will need to give power of attorney to the solicitor, which will require a visit to your local notary with the papers supplied by the lawyer. A fee to the Notary will be required, anything from £50 to £150, depending on the Notary. The lawyer will usually charge between €50 and €100.
    The lawyer can then open a bank account for you. Following this the lawyer will start the usual searches. Is the property owned by the seller ? Is the property registered at the Land Registry ? Are all the taxes paid on the property ? Are there any outstanding utility bills ? Does the property have an energy certificate ? Are the plans registered at the Government building ? Is the property legal to the latest Greek Law ?
  3. At this point the Engineer or Architect will enter the fray. The Engineer will usually be appointed by the Estate Agent but if you carried out the original advice you may already know a good engineer. His job is to inspect the house for any defficiencies, ensure the energy certificate is in place, ensure the property is as the plans suggest and that no illegal buildings are on the property. He will also inspect any vertical or horizontal separations that may be required. More of this later. His signature is also required to be notarised on the completion documents. It is worth asking the question of him, " Do the plans accurately reflect the actual property in position and size ? and have this in writing as your property taxation will depend on this and if it doesn't then you may be faced with a large expense when you want to sell.
  4. The next person you need to appoint if you haven't already got one is a good accountant. I use the word " good " advisedly. I would advise that you speak to any Greek friends for advice on appointing an accountant, rather then the expat community who will usually have the same accountant. Do not under any circumstances allow the accountant to show a reduced purchase price on the Government taxation papers. More on this later. The accountant will get a Greek Tax number for you and your spouse if joint ownership which you need to own a house.
  5. It may be worth at this point to visit the property again and agree with the seller or the seller's agent in writing to correct any cosmetic defects that you may notice and to run through with him the operation of the property. I have always left an operating and maintenance manual for my new owners.
  6. If your property is in an area where any part of Souda Bay can be seen from the property, you may be investigated for military clearance as this is a sensitive area both for Greeks and NATO.
  7. Try to get the builder or the Agent to arrange for all the utilities to be in place when you move in. 
  8. OK, all is in place, the lawyer has stated in writing ( always conduct everything in writing, email is OK ) that the property is as it should be and the engineer is happy and you are armed with your new Greek bank account, the next thing to do is pay the deposit to secure the sale. This will be done under a Precontract drawn up by the two lawyers. This is nearly always 10% of the purchase price. Beware, this is, in nearly every instance, a non returnable deposit, unlike in the UK where you can claim it back if something goes awry. You will need an extremely good reason to reclaim your deposit. You will pay this to your lawyer who will then pay the seller's lawyer or you may be able to pay direct to the seller's lawyer. Make sure you get a receipt.
  9. Fees and taxes are nearly always about 10% of the full purchase price. If they are more than this then it may be worth your while to investigate why. Don't forget to add this to the purchase price.
  10. You will be given a date for completion when the final monies are handed over and you are given the keys. Your lawyer will deduct the fees amount from the monies to pay all the taxes and outstanding fees and pay the rest to the seller. You are now the proud owner of your house on Crete.
  11. Important : Get your Accountant to ensure that there is no outstanding EOKA tax ( Insurance tax ) on the building. Do not take either the builders nor the estate agents word on this.

 

Correct at time of writing May 2019