Last Updated 15th May 2017:
When looking to buy a property in Hurghada, whether it be an apartment or villa, it is very important to do your research. Most people will begin that search online. A quick Google search for "property in Hurghada" will pull up about 434,000 results. With so many results to look at it can be hard to know where to start, so we decided to put together an Ultimate Guide to buying property in Hurghada to give you head start and all the information you need when beginning your property search.
Choosing A Property Agent
"it’s extremely important to use an experienced agent; purchasing property whether it’s a home or an investment property is a huge decision and having somebody around who knows the area and can answer any questions you might have makes the entire process more enjoyable (and less stressful)."
A good place to research is property forums and social media, there are lots of these around now and if an agent has done anything negative, you will probably find it on the internet somewhere, likewise if they have done good work you should be able to find it.
Testimonials are another thing you should look for. However, don’t take too much notice of Testimonials written on agents’ websites, these could be written by anybody, including the agent themselves. Even if they are genuine testimonials, the agent will not add negative testimonials on their own site so you are going to see a really bias view. If you want to see truthful reviews look for independent review websites where the agent can not delete or change the client testimonial and can not add the reviews themselves. One such website is the FreeIndex.
Questions to consider asking the Agent
1. Have you visited the property in person? When was this?
2. Do you have staff on the ground in the country?
3. Can you put me in touch with previous clients?
4. Can you recommend an independent solicitor?
5. What after sales services do you offer? Property Management? Rental Management? Furniture? Resale?
6. Can you arrange viewings? How does this work?
7. What are the yearly charges? What do they cover?
8. How can I furnish the apartment?
9. Is there a building guarantee?
10. Are there different payment plans available? If so, what are they?
TIP: Do not pay a 'finders fee' - There are some overseas property agents who charge a 'finders fee' or 'agents fee' for helping you find the right property, and with all the results you see when you start your initial search online, you could be forgiven for thinking that an agent asking for a finders fee is a worthwhile investment. However tread carefully. The vast majority of the time, these agents will have access to the exact same properties which other agents have, yet do not charge a fee. Do your research, look to see what properties/developments are available which suit your criteria and you can avoid the need for paying additional fees to agents.
Viewing The Properties And Location... Location... Location
Buying a property in Hurghada, or anywhere for that matter, is a big decision and one that is not just about the property, but also the location and everything that comes with it. It is okay finding your dream property, but if you have not been to actually visit the area you are buying then you may end up being unhappy with where the property is located, which can turn your 'dream property' into a decision you grow to regret. Viewing trips are also a great way to actually view the property itself, including anything, which can be easily missed out when people are posting photos and information trying to sell the property.
Liz Rowlinson, Editor of A Place In The Sun, explains the importance of viewing trips perfectly.
"Viewing trips, whether organised through an agent or independently, are an essential part of finding a property abroad, as demonstrated in our TV series. Not only do you need to see the area in which you are buying, and investigate all the transport links, amenities, beaches etc, you need to assess the development or situation of a property, as well as the quality of the home itself. Viewing pictures on an internet site can’t provide all the accurate information that you need to have to make such a big decision, and we all know that photos can be misleading, and omit to include any unfavourable aspects of a property or its situation. Take your time and use viewing trips to obtain as much information as you can so you can make an informed decision about buying.”
Using An Independent Lawyer
This point can not be stressed enough. Make sure that you have an independent solicitor look into any project which you are seriously considering investing in. This is the single most important decision you will make when buying any property in Hurghada. Using an independent solicitor can save you from losing all of your investment in certain cases.
"No matter what anybody tells you, no matter how easy it all seems and no matter how lovely the agent seems, ALWAYS use an independent lawyer to represent you throughout the purchase of your property overseas... You will need to pay the lawyer a fee – accept that as part of your purchase costs. This is not an area in which to keep costs down."
When we say using an independent lawyer is the most important part of the buying process in Hurghada or anywhere for that matter, we REALLY mean it, if you take nothing else from this guide, please, please take away the seriousness of accepting free legal services or using a lawyer you haven’t researched.
As with searching for a property or a property agent, word of mouth is always the best recommendation, but if you aren’t lucky enough to have been recommended someone, then forums, social media and internet searches can be very useful. If you want help finding an independent solicitor then consider speaking to the AIPP.
TIP: Do Not Accept Any Free Legal Services! Discounts off some services are fine, but NEVER compromise on independent legal advice. If you were buying a property in your own country and the seller said don’t worry I will sort the legal papers out for you, would you take their offer? I doubt it! Buying in a foreign country is even more risky. It is well worth spending a few hundred pounds on a good independent lawyer, than saving that few hundred pounds and then losing thousands.
The one we recommend charges our clients £600 for all legal searches, contract review AND includes the Signature Validation, paid after reserving the property and before any contracts are signed. It also includes all government fees/official translator fees and covers the cost of the lawyer picking you up from your hotel/apartment and driving you to the various offices and back home again.
Using a Currency Exchange Company
Okay, so you have done your research and you now know which overseas property agent you want working for you, you picked out a property or properties of interest and you have found yourself an independent solicitor who will assist with your property purchase. To help your money go further when buying a property in Hurghada, you may wish to look at using a currency company, as many developer will sell their properties in different currencies. The most common are Egyptian Pounds, Great British Pounds, Euros and US Dollars.
William Holiday from London based Currency Company, Cornhill FX says
“We offer better rates of exchange than a bank by typically up to 3-4%. That equals an additional £30-£40 on a transfer as low as £1,000 and as much as £3000-£4000 on larger trades of £100,000.”
Although it is not always guaranteed, using a currency company can in many instances help you get more for your money, so it is something worth looking into. Again, it is also important to know that you are working with a company that deliver on their promises and provide a great service at all times, so take the time to research several companies.
TIP: Check which currencies the seller is happy to accept and ask them for a price in each currency. Take these prices to the currency companies which you have researched and find out which currency will work out cheaper for you to buy in. This is a great tactic when paying all monies in one, though be warned, if you are paying for the property in instalments over time, exchange rates can fluctuate so the property could end up costing you more. Seek advice from the professionals but ultimately the choice is yours.
The Buying Process
Right, on to the easy part or it should be if you have followed the steps above and have now engaged an experienced and knowledgeable agent, found the right property and a well researched independent lawyer is lined up, now its time to actually begin the buying process.
This is the step by step buying process when purchasing a property in Hurghada. We have tried to keep things simple, but please if you have any questions then just leave a comment and we will do our best to get back to you.
1. Reservation Form
This form should include all the property and payment details as discussed with your agent/developer/lawyer, it should also be filled out with the details of the buyer/s. If buying jointly with a partner/friend both sets of details need to go on this form, same for any other additional buyers. Once filled in it needs to be printed off and signed, then returned to your agent/developer/lawyer the quickest and easiest way is scanning and emailing. Try to make sure if you fill in your own details they are easy to read, you may know your address but it will be an Egyptian lawyer trying to read your handwriting, make sure it is clear or even better typed. The reservation form normally has the bank details for the reservation payment, so make sure you keep a copy.
2. Reservation Payment
The amount varies from a fixed amount to a percentage but your agent/developer/lawyer should have explained all about the payments while researching the right property for you. This should now be paid once the reservation form has been signed and returned, always ask your agent/developer/lawyer to get you a receipt once the money has arrived and cleared.
There is usually a waiting period after the reservation when the developers lawyers draft the contracts, it can be a few days to a few weeks but don’t worry if it takes a few weeks, anything longer than this it might be worth chasing.
During this period if you haven’t yet instructed your independent lawyer, now is the time to get it all arranged, generally they will want their fee upfront and the one we recommend sends his clients an agreement to sign which outlines his fees and services included in the fees etc… Once this is done you are ready for the contracts.
3. Receiving Contract
The contract is drafted and emailed to you normally via your agent/developer/lawyer; these have to be written in Arabic and another language by law (normally English) however, it is the Arabic that takes precedence in any legal issues. This is the reason I keep saying use an independent lawyer, because unless you can read Arabic you have no idea what you are signing for. Although you can read the English and it all looks good, you need to trust your lawyer to translate the Arabic to ensure it matches the English, as this is what you will sign and what you will rely on if anything goes wrong and you have to go to court. It would be like buying a home in your own country and signing a blank contract and allowing the seller to fill it in without you seeing it, I hope you can start to see how important finding your own legal advisor is and NOT accepting any free legal services from anyone no matter how much you trust them.
4. Signing And Returning The Contract
You have read through the contracts and all your personal details, property details and agreed payment plans all look good, you have sent it off to your independent lawyer to carry out the due diligence checks and ensure the Arabic translation matches the English side of the contract. Your lawyer has now given you the green light to sign and return the contracts, all contracts have to be original, and copies are not legal documents.
You will normally have to print off three copies of the contract and Annexes, your agent/developer/lawyer should let you know how many copies are required, and it should also be written in the contract usually in the last clause. Every page of each copy of the contract has to be initialled at the bottom by EVERY named person on the contract, sometimes the contract will have First Party and Second Party written, as a buyer you are the Second Party and this is where you initial, including Annexes. There will be a signature page as well, again it will have First Party and Second Party on both the English and Arabic sides, all named people on the contract have to sign on this page on BOTH the Arabic and English sides.
TIP: When returning the contracts it is recommended to use a carrier like DHL as using the normal mail system takes a very long time and many times contracts are lost. We recommend using DHL Express, it isn’t the cheapest option but we have never lost a contract and they normally arrive in 4-5 days. It is worth spending the little extra to ensure the safe delivery of such an important document. Just follow the instructions for whichever carrier you use, again your agent/developer/lawyer should instruct you accordingly.
5. Payment On Contract
The contract payment is now due, we like to ensure the developer has the contracts and has countersigned before allowing our clients to pay any money, to ensure this we ask for a signed copy to be scanned and emailed to us. Once you have made the payment it takes a few days to reach the developer, but your agent/lawyer should keep an eye on this for you. After it has been received the developer should return either one or two signed copies of your contract to you, but you MUST receive at least one copy back, keep this safe and do not lose it.
If you have an bought off plan property in Egypt, you now need to just wait for it to be built and if you have researched your agent/developer/lawyer well enough they should be keeping you updated with monthly reports on the construction. If you have bought a newly built completed property, you need to go through the acceptance process, which is the same for those that have bought off plan once their properties are completed.
The process is quite simple if done correctly and using the right people, first is the snagging of the property, this is where the property is checked for any defects. This check can be carried out by the owner if they wish to travel over and check their own property however, be prepared for it not being ready for checking or needing a good clean and no one from the developers side turning up to carry out the snagging process (it could be a lot of wasted time and money). There are companies/individuals that offer a snagging service, again if you have chosen the right agent/developer/lawyer they should be able to help with this, it is normally a fee based service but can save you hundreds of pounds in wasted trips and hassle.
If anything is found to need rectifying, this is reported to the developer and depending on their service, they should repair any defects. Once completed the apartment will need another snagging, which if you have carried it out yourselves could entail another trip out depending on how long it has taken for the points to be rectified, hence it is a good idea to use someone locally based. Once the apartment has been passed and accepted it is a matter of picking the keys up, which again you can do yourself or appoint someone to do it for you, could be the same people that accepted the apartment for you.
Once you have completed buying a property in Hurghada, you may want to know how to open a bank account in Egypt.
6. Property Registration
At this point the question of registration normally arises if not discussed previously with your agent/developer/lawyer; there are two types of registration, Signature Validity and The Green Contract. For each one you need to give your independent lawyer a Power of Attorney (POA) to enable him/her to represent you in court, so this is step one. The easiest way to give POA is to travel to Hurghada and meet your lawyer (I am writing this as if your lawyer is based in Hurghada), remember to take with you your signed original contract.
This is when your independent lawyer takes your original signed copy of the contract to the court, it is basically a court hearing where the signature on your contract is deemed to be that of the developer. The contract is signed and stamped by the court and then collected by your lawyer and handed back to you, this is the most common route taken by foreign buyers in Hurghada, the reasons why are below.
This is the full registration process where the property is registered under your name, this can only be carried once a development has been completed and the developer has registered the land (normally the land is only on an allocation agreement or sales contract). Recently Egypt capped the total payable under the 3% registration fee rule at EGP2,000 (approx £200), regardless of the purchase price of the property. So registration is now less expensive than it used to be, you still have the lawyer fees on top as well though. The process still takes a long time and can be between 18-24 months, as there is no computerised system in place yet.
The Pros and Cons between Signature Validity and Green Contract.
Under Egyptian Law No 230 of 1996, foreigners can buy a maximum of two pieces of real estate, which cannot exceed 4,000m2. The properties only become recognised after they have been fully registered (Green Contract) so just going through the Signature Validity process allows more properties to be purchased. Also, when a property is registered it can’t officially be sold for 5 years, these laws are under review as it is an archaic law. Therefore although the Green Contract gives significantly more security to the ownership of the property, it does have a lot of restrictions, hence why more foreign buyers go for the Signature Validity. With the Signature Validity you can buy as many properties as you like and sell/rent out as you wish.
As you can see from reading all of the above, there is an awful lot to consider when buying a property in Hurghada, but if you take your time and thoroughly research so you work with the right people at each stage of your property purchase, it can be a very exciting and enjoyable journey... and remember always use an independent solicitor.
The Ultimate Guide To Buying Property In Hurghada has been put together by the team at Rivermead Global. We hope that you can take away from this the importance of doing your research and maybe gained a little bit more knowledge of the the buying process itself. If you have any questions then please leave a comment below or email firstname.lastname@example.org
Why Buy Property In Hurghada from Rivermead Global Ltd
Rivermead Global Ltd are a team of extremely passionate property and furniture professionals, with over 19 years of combined; knowledge and experience in the Hurghada Real Estate, Furniture and Rental Markets.
If you are considering purchasing a property or furniture in Hurghada, you have found the experts. We hand pick our developments carrying out extensive background checks and due diligence before offering to our clients, to ensure we offer the safest and best properties in Hurghada.
With our own Furniture Company, we design and manufacture all our own kitchens and furniture, ensuring you get exactly what you have asked for, if we don’t have what you want we can probably make it for you. As we own it we are in complete control of everything, including: design, delivery, installation and prices with European staff overseeing our operations.
Our Rental and Property Management Service also ensures your property is in safe hands, with a host of options to help you make the most out of your investment or just ensuring it is clean and tidy for your own use. Plus transfers to and from the airport, welcome packs, excursions around Hurghada etc.… With our list of contacts we can offer whatever you or your guests require.