Due to the cultural and recreational appeal of the coupled with the ‘Turkish citizenship by investment’ incentive from the Government, Turkish real estate has gathered a significant amount of fame among the investors and relocators all around the world. This has given rise to the arrival of a large number of real estate agents as well.
Unfortunately, with the large number of real-estate investors and agents coming into the markets, a few dubious entities are bound to infiltrate into the market. For that reason, a few foreign buyers have been misdirected with incorrect information about the financial details and the procedures and have had to pay a huge percentage over and above the rightfully due amount. This concern has sparked a fiery debate in the market that could well be harmful for the reputation of Turkish tourism as well as the real estate industry.
To tackle the concern, the government has come to a decision to address the said issue by introducing a law, whereby, each foreign real estate investor shall have to submit a Property Appraisal Report prior to finalizing the deal with the customers. The Property Appraisal Report is intended to safeguard the foreign real estate investors from any potential Fraudury During Transaction.
The report is also likely to put a damper on the selling of property that is valued more than it should be. Turkish General Directorate of Land Registry and Cadastre (TKGM) has put forth the development of a new department within itself, who shall solely be responsible for reviewing the said reports. The implications of the report are as follows:
- The Capital Market Board shall see to it that the Appraisal firms are professional entities that shall be bound to follow the capital market regulations.
- The cost of these reports is from $180 to $350. The buyers are to pay or transfer the said amount directly to the appraisal evaluation department within the TKGM. If a real estate agent demands more than the said amount or suggests in-house appraisal, the investor ought to walk away immediately..
- After the stamp of validation from the approval department, the Appraisal Reports shall remain eligible for three months. In case of cancellation or postponement of the deal, the same report can be reused for approval. If a property is at an off stage or under construction, the cost shall be the estimated value of the property upon the completion of the project. The value given on the total quotation of the appraisal report shall also be included on the title deed documents.
- Once the title deed is signed off, the Land Registry and Cadastre shall obtain the file for entry in the system and record keeping before being returned to the investors. The process for Istanbul only takes 3 days while for any other place, the process is likely to take 6 days.
The said procedure might be slightly challenging, but can be taken care of with the assistance of the right real estate agent. However, the overall benefits of investing in the real estate market should be accounted for at all times. The Turkish government is committed to offering the foreign investors all the benefits with their offerings such as residential permit or Turkish Citizenship by investment. Having said that, now is as good a time as any to invest and settle in Turkey.