He came through a recommendation. Through a family whom I have accompanied in international real estate investments over the past decade.
The father bought the first apartment 9 years ago, and after him also bought apartments for the children, leased out the properties, sold and upgraded.
My best friend from my army days is thinking of buying an apartment in a foreign country. He is afraid to take the step and his wife is against it, but he likes the apartment, the location suits him, and with a little investment he sees himself in a few years in retirement living in it with his wife.
We arranged to meet at my office, and I explained the process, the exposure and the market to his friend.
After half an hour of meeting - he gave the green light to move forward.
A few days later I called to update him on the results of the due diligence (DD). Everything looked good. The paperwork we checked was in order. The apartment was free of attachments, liens and debts. It was possible to move forward to a draft purchase agreement.
By the end of the day, together with the seller's law firm, I had put together a final draft for signature, and we agreed that a third party would sign on behalf of the seller.
But... something smelled off to me and I didn't know what.
I turned to the seller's lawyer again and asked for a power of attorney, and received it immediately.
And everything looked in order.
Yet something still didn't add up, and I couldn't settle down.
An hour later I called the seller's lawyer again with the question: where will the money be deposited? He replies that it goes to the attorney-in-fact's account.
At that moment the red lights went on and the warning bells began to ring.
I asked that the money be transferred to the seller's account and not to the attorney-in-fact's account, or that the power of attorney be amended to state explicitly that the attorney-in-fact is entitled to collect the money into his own account.
A string of excuses began.
You have to understand, the attorney-in-fact is the seller's father... the seller is studying abroad... it will take time.
I said we would wait patiently. I added that I was also willing to hold a phone call, or preferably a Zoom, with the seller to confirm, and then I would agree to waive the amendment of the power of attorney.
Understand, he's working, he's studying... he's not available for this...
I called the client and explained the situation to him, and also the risk.
This apartment was not purchased.
And a few months later the client bought an apartment from a contractor in the same country.
There is no doubt that there are stories like this in Israel too, but when you buy a property in a foreign country, extra caution is required.
If you work with the right team, you will reach a safe harbor and buy property abroad too without any particular problems.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית