Anyone Bought Real Estate in Colombia?

[Zorro]

I'm seriously thinking of buying some real estate in Colombia. I hope to be able to retire in about a year and half and spend a lot more time there. If anyone on the board has bought real estate there, I would like your advice. Would I be wiser to wait a year and invest my money here for now, or buy there now for the appreciation? Are there any problems with someone from out of the country buying real estate? I'm looking for words of wisdom from the experienced.

www.retireincolombia.com

www.escapeartist.com

[Zorro]

Ray,
Do you have any personal experience with these services? I'm leary of middlemen, especially in Latin America. But thanks for the links; I'll thoroughly look through them and see what I can learn.
Z

[Cap'n Jib]

Z,

I have been researching properties in LA for over two years and have yet to make a purchase. With respect to any purchase of real estate in LA, extreme care is warranted. There are many reasons but here are just a few.

Ownership of land in LA, except in very few areas is not perfected. Also disputes are resolved in civil court. Case law as we understand it in the US has little if any meaning in LA with respect to real estate.

The custom of paying for contact information (a finders fee if you will.... or a bribe if you won’t) IS the way most things are done there. They have been doing it this way for over three hundred years and are not likely to change any time soon.

There is NO Multiple Listing Service and so there is not a market for real estate as we understand it. The same property can be listed with a number of real estate brokers at the same time. But here is were it gets interesting....the price for the same property can vary from broker to broker based negotiating skills employed in the “listing” process. Oh, the agent will most likely charge you for showing properties.

We haven’t even begun to cover the “types” of ownership. The two biggies are ‘titled’ and ‘Rights of Possession’, With one you may get something and the other you will most likely get the privilege of defending your claim of ownership in civil court.

Common practice in LA is 10 % down until their version of a closing takes place. Oh, did I mention that the deposit is usually “held” by the seller once the purchase agreement is signed? The closing tends to be an “experience” for those who have not purchased land in LA before.


It would appear that every country then has it’s own ‘country specific’ twist on ownership and foreign ownership in particular.

Mexico:
In the recent past if you were to purchase a home in Mexico, a foreigner had to get a costly permission from the Office of Relaciones Exteriores. While no longer the case any foreigner can purchase a home or land in Mexico without that hassle. Stay CLEAR of Ejidal property,. It also might be a good idea to stay away from property that the owner wants to sell by "contract". The contract, under Mexican law, becomes void when that seller dies, and the property can revert to their heirs.

Panama:
A lawyer is not allowed to give advice on real estate unless they also have a real estate licence. Panama has over 7,000 lawyers and not many also have real estate licences. Recourse against lawyers is almost unheard of, BUT there is a $10,000 bond to go against if the lawyer has a real estate licence. Properties can be subject to third-party ownership claims, and Panamanian law and local politics could make it possible for the property's original owner to claim it after you've "purchased" it.

* * *

You might want to consider:

1. Make sure that the property you want to buy is titled. Get title insurance if at all possible.

2. Are all the improvements in place NOW? Otherwise you may get the opportunity to pay for them.

3. Get an honest and trustworthy lawyer. Talk to other expats or people you trust for recommendations. (And yes you may get charged a finders fee for this information or more likely a payment well be delivered outside of your presence.)

Zorro, I'm in the same boat and I just walked away form a considerable deposit I put down on one condo in Brazil, however, in my opinion, the bottom line is there's no secret formula to buying real estate in Latin America, every country is a little different but all are the same generally speaking. I trust Robert Vignola's opinion and he's the guy with the Retire-in-Colombia site, the others such as Escape-Artists - I cannot vouch for. Yes, avoid any/all middlemen, that said, I advise choosing a country you like and spend time there, a minimum 6 months pounding the pavement, learn the language, look for trustworthy people, lawyers, etc and deal directly with the owner or contracting company that is constructing the building you want to buy, then buy your apartment/condo/land whatever.

You will encounter the typical scammers everywhere looking to screw the gullible gringo. Do the hard work, pound the pavement, consult your team, then go with your gut and make the wire transfer.

I'd like hear from other GringoTalk member’s about their experiences with buying real estate in Latin America, as we can all learn from each other’s experiences.

[Cap'n Jib]

Clarification: When I used the phrase "Case law" in the above post, it was a type of short hand. I should have said "English Common Law" . Sorry about the confusion.

George, did you buy in Patio De La Floras?

-- Apartment renting vs home ownership --

Stuff to think about...

- Can you re-sell your condo? Quickly if needed to?
- When your out of town or back in the US, who will you trust to take care of or look after your place?
- Earthquakes and/or fires within the building?
- Could a nearby neighbor break in once word got around "the gringo is out of town"?
- (What if) you have a tragic accident and die/disabled, what kind of fiasco would this cause for a family member to deal with your condo in Colombia, Brazil, Peru, etc?
- Will the building turn into a rental haven for sex tourists and/or minorities who don’t give a ****?
- Yearly property taxes and monthly bills, who will pay this if your back in the US?
- Will you grow tired of the area or city you chose to buy in? Maybe the city could take a turn for the worse, i.e. Cali, Colombia. Will it be a hassle to sell? Can you trust real estate agents there?

Estimating, in Colombia, a large, nice, new 3/2 will go for -/+ $100-150,000 and in Brazil on the beach, expect to pay out $300,000 to over $1M (all in USD)

These are just a few questions to ask yourself.

[Zorro]

Great info, guys. George, very helpful contacts. Thanks.

The professionals, attorney etc, are in Miami, right? Does anyone know any good reliable real estate attorneys in Colombia, particularly in the Medellin area? Such professionals there can be invaluable and save you a lot over what you pay for the same services in the U.S. But, I wonder if they would know about the laws here if I possibly wanted to move the money back in the future. 45% penalty... wow! Robert Vignola is strictly in real estate sales, right?

George, how much did the price of the pre-construction rise from the time you bought to the time it was completed... what percentage rate gain do you figure you made just on appreciation in the price?

If you can afford to pay cash for an apartment in which to live, would that be a wise move... is the appreciation in real estate higher than the mortgage rate?

Again, muchas gracias por la info. Keep it coming guys; this is an interesting topic!

Gentleman,

I am selling an apartment in Bogota..to see it

http://grupoartkaa.blogspot.com/

[Zorro]

George... more great info. This is exactly the type of conversation I was hoping to get going. I'm not looking for advice so much as experience. I want all the info I can get before I roll the dice. Then it's not so much like rolling the dice... I'm not into big gambles with my money. I prefer calculated risks. Just crossed my mind... lots of us guys calculate our risks a lot better when considering a real estate deal than we do when considering marriage. There's a lesson to be learned there, attorneys and all, guys. You can lose just as much or more from a failed marriage if you don't know what you're getting into... plus there's a lot of heartache that goes with it. Do your homework, cover the legal bases, and the insurance (pre-marital agreement) is a good idea. And then hopefully you end up with a deal that works for both parties so no one loses.