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 Homesgofast 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.
The survey shows that this type of service is what many potential investors want, and need, before making their purchase. Over 2,500 people who had an interest in purchasing overseas property were asked to take the survey. 40% of potential investors said they would purchase an IDIP before purchase. Only 10% said that they could do all the necessary checks and information searches on their own without something such as an IDIP.
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
IDIP has gone one step further and has set up IDIP Federation, agents join on the undertaking that all their off plan properties are not sold with having an IDIP in place.
Developers can have their developments examined by independent lawyers and awarded up to Five Star Rating
To join the Federation Property Developers are required to agree for a full independent due diligence (Developers IDIP report) on their development, which will be carried out by international lawyers. The Federation will issue star ratings based on the report and the aspects each development offers the potential buyers
These will include a star for each of the following elements
Full planning permission
Building Licenses
Full title ownership of the land
Escrow or bonded payment protection for deposits (Bank Guarantees)
Rental Guarantee bank bonded
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