It's amazing how much the global property market has changed in the past decade. There was a time when buying a villa in your favourite holiday spot, or exploring emerging property markets in unfamiliar countries were fraught with difficulties and confusion. These days, advances in technology and the increasing numbers of Brits buying abroad has led to an opening of property markets worldwide, and most can be accessed by the click of your mouse or a quick flight on a low-cost airline.

Yet despite the ease with which you can now scour the Internet for condos in Florida, fincas in Andalucia or villas in Phuket, there are still a fair few potential pitfalls for property hunters. And while it may be difficult to predict all the financial twists and turns you're likely to take, a few issues are commonly reported by British buyers overseas.

Currency converter
It's the first thing most people buying a property will think about: money. What might not instantly spring to mind is the fact that exchanging your pounds for another currency doesn't necessarily have to take a chunk out of your savings. In fact, you could end up saving money if you play your cards right.

Exchange rates vary constantly and a 10 per cent fluctuation in a short space of time is not uncommon. This could effectively increase in the amount that you will have to pay. There are various organisations that can convert your British pounds into the currency you need, including banks and currency specialists. Companies that focus on currency exchange generally offer a better deal, but it's best to shop around and look at what's on offer. Helen Scott, managing director of currency exchange company 4X, says there are three main things you should bear in mind when you buy currency for a property overseas: "Firstly, don't rely on your bank to give you the best rate.  You only need to look at their profits to see why. Secondly, do shop around for rates. There is a huge variation in the deals you can get from company to company and it could mean a difference of hundreds, even thousands of pounds.  Try to get quotes from two or three companies at exactly the same time to compare prices. And finally, do make sure that if a specialist currency company quotes you a rate, either on a website or verbally, they are actually prepared to deal on it."

Keeping your head
Making your currency go far is one thing, stopping yourself from splashing out needlessly, or cutting corners to save a few bob, is another thing altogether. When buying in the UK people seem to go about house hunting with a healthy dose of cynicism. Plonk them in sunnier climes and let them fall in love with the local scenery and they can fall head over heels in love with the first property they see.

You may have had a chat with a bloke in the local bar where you plan to move who advises steering clear of property professionals and buying from his good friend instead. But beware: overseas buyers are easy prey for dodgy dealers. Get independent advice about a property purchase, which means using the vendor's or developer's solicitor isn't a good idea either as they are unlikely to be impartial. Also, be on the look out for pressure selling and vendors who insist that your GCSE Spanish or pidgeon Thai is enough for you to understand the legal process and sign important documents.

Avoid development disasters
"It is always a risk [buying in an emerging market] but we feel that by investing in Kalkan, a village we had visited on holiday on several occasions, we were minimising that risk", says Sue Flynn, who has so far bought two buy-to-let apartments in Kalkan, Turkey (in 2005 and 2006). She feels preparation smoothed her property purchase and explains, "We had done quite a lot of research so didn't have too many nasty surprises though there are always costs that crop up – those that aren't large but that can add up if not budgeted for – like costs associated with having utilities put in your name, translation costs at the tapu (title deed) office when signing title deeds, water bills for garden maintenance and pool filling as well as general utilities bills for your property".

Sue used a builder who she trusted and had seen examples of their work, but she advises caution when buying, even if you're looking in the more secure re-sale sector. "If a resale property comes furnished, remember to ascertain exactly what is included. It can mean anything and may not be your taste. If this is the case, you will still have to factor in the cost of a certain amount of furnishing. Just because it's furnished doesn't mean that you can forget about associated costs."

When it comes to finding a building firm or developer, remember cheaper does not always equate to better, and may end up costing you more in the long run. Ask to see a builder's licence and make sure the builder or developer has an the necessary bank guarantees in case of financial problems. Flynn adds, "To get the best deal, there is absolutely no substitute for knowing the market inside out. They should read magazines and newspapers featuring the country and region in which they are interested; do some web-based research; and read books on buying property. "Also, it is crucial to talk to people.  Don't be afraid to ask other buyers in your chosen region about their experiences as this can be invaluable knowledge and potential for negotiations with the seller. Buyers should also remember that purchasing direct from a builder or developer avoids  any estate agent fees that may be payable by both buyer and seller."

When working directly with the builder or developer of a property, it is also sometimes possible to negotiate on the furniture being provided, as often they find it easier to do this rather than knock money off the asking price – it costs them a lot less but can be quite a saving for the buyer who would have to pay retail costs for all furnishings, whereas the developer will get these at cost price.

In terms of making sure any sale is legitimate and legally binding, it is best to do your homework before you put down an offer. Some countries are notorious for paperwork trails that cover up a litany of problems. Homebuyers should be alert for any 'land grab' issues and planning permission for any properties they are buying. Check that the property has proper planning permission and that add-ons like swimming pools and extensions are legal. Also, find out if the local authority has legal powers to seize all or part of your property at a later date, without compensation.

Renovation nation
DIY SOS, Changing rooms, Property ladder; let's hold our hands up and admit it: we are a nation addicted to 'doing up' property.

Our voracious appetite for fixer-uppers has spilled over into our overseas purchases, and the idea of turning a ruin into a proverbial castle has persuaded many a Brit to buy a shell and create the house of their dreams.

Jill Lindon, who has renovated four French properties in the past 16 years, believes it's as much about who you know as what you know when it comes to buying into a renovation project. "It all depends on finding a good, reliable, honest builder. Without one, you're in trouble, especially if you aren't there all the time – you have to have someone you trust." In terms of budgeting, the veteran renovator managed to stop costs spiralling out of control from the beginning, and saved money by hiring a builder to supervise the project as opposed to the more expensive option of an architect. Her latest renovation in the Cote d'Azur was a five-bedroom, four-bathroom property that she managed to complete in three months in 2006, "with everything arranged beforehand". "Nothing's really changed over the years, legal and notary fees are still phenomenally heavy compared to what you would expect to pay an agent in the UK."

Her advice to any would be DIYers? "Learn the language and get to know the area and where you can get things like bathroom equipment and so on, otherwise you're entirely in the hands of your builder, who might take you to a more expensive shop."

Mortgage moments
If you decide to go for a mortgage, you often have a choice between using sterling and foreign currency. UK banks will not lend directly on overseas properties, because other countries' property purchase systems are outside their sphere of influence and understanding. So, if people want to borrow in sterling they typically remortgage their UK home to release the capital that has accumulated as property values have gone up.

The alternative is to approach a specialist UK-based overseas mortgage broker who will arrange an overseas mortgage, usually with a local bank. With different standards and regulations, it is important to go to a well-established firm. Be aware that many brokers charge up to 1 per cent brokerage fee, despite the fact that they generally get paid commission by the bank as well.

So, armed with the information, there's no reason to shell out extra money for your home overseas.

Click here to read the World of Property interactive i-mag FREE

Search and browse overseas property

For further information:
Kalkan Magic 
4xCurrency 

Article published in December 2006