Colombian Real Estate Stories
Reasons that you should work with Real Estate Professionals - Agents and Lawyers - in Colombia.
I would like to share some experiences that foreigners have faced in purchasing real estate in Colombia. They are real stories and hopefully will encourage you to use a real estate professional in your purchase in Colombia.
I spent an inordinate amount of time with a client who, just when I thought we were getting close to what he wanted, he announced to me that he bought with another ''agent''. About a month later I received this email.
1) Just FYI, I experienced my latest lesson in Colombian culture today, and it may be another "I can't believe this is happening to me" moment. The apartment deal was supposed to close today but the seller did not show up at the Notaria. On Oct 23 I paid 50% of the purchase price and he retains this money today. After my lawyer contacted him yesterday asking "what's going on? we're supposed to close tomorrow" he had his secretary/agent send an email saying they needed more time due to some kind of complication with the bank. They wanted to extend the closing until next Friday and asked that I agree.
I really didn't know what to think because they were silent until the day before closing and then only when prompted ask for more time. Was he hoping I would forget and fail to show up so that he could extract the penalty? Is he planning on disappearing with my money, never to be found again? I think these are valid questions, given the following: remember, at first I was told there was no mortgage on the property and that turned out to be false. I'm not sure if he lied to my agent or if my agent lied to me. But somebody misled me prior to the deal with that misinformation. Then he told me I could have access to the apartment if I paid 50% down, which I agreed to, but at the last minute he said he didn't trust allowing me into the apartment before receiving the full amount but agreed to pay my rent for one month while I waited for him to get his mortgage paid and settled. Maybe he didn't want me settling into the apartment because he never planned on closing?
Anyway, now that he has failed to close as stipulated under the contract I have some fairly onerous rights which I could use against him if I choose to use the courts. As a matter of fact, the way I understand the contract I now have the legal right to force him to pay a 20% penalty. I am wondering what a Colombian would do in my circumstance.
2) Recently our lead attorney, Sandra Serna, was closing a deal. As part of her process, which most lawyers do not follow, she was doing an inspection prior to the final signing. This apartment was unusual as it had four storage units. When she asked the seller to demonstrate them, they could only show her one. Even though they had been paying tax on these units, they had no idea where the others were located ? ! It turns out three had been ''folded in to the apartment'' illegally. When this apartment had been listed, the real estate agent should have asked to see the parking area and storage units as it would have prevented this very last minute complication to the closing.
3) One of my associates had a client that he had been assisting. The client was renting a unit here and they had been looking for sometime. One day walking back to the rental unit, the client saw a 'for sale by owner' sign in a window. He called and made an appointment to see the apartment. He liked it and made a deal to buy it. The seller arranged for the buyer to meet a lawyer. The negotiation closed and the buyer sent the lawyer the funds to pay for the apartment. I believe it was close to 200,000 USD. Unfortunately this story does not have a happy ending as the lawyer closed up shop and made off with all of the money !
These are 3 real experiences why you should use real estate professionals. It is a conundrum why buyers feel that they can save money by not using an agent. If you are fluent in Spanish and know the culture maybe you can shave a few thousand dollars off the price but if you don't follow the proper protocol you could easily ''lose your shirt''.
We have discussed this before, anyone in Colombia can sell real estate and lots of people hustle the foreign buyer - taxi drivers, bartenders, waiters, doormen, your Colombian friend's aunt, etc., etc., etc.
This is not a rule of thumb but a guideline. Anyone who can not produce a Chamber of Commerce registration or does not have an official office - whether it be a real estate agent or a lawyer, doesn't have ''enough skin in the game'' and perhaps you should find someone who does.
Real estate commissions in Colombia are about the lowest of anywhere in the world. You do yourself a disservice by not using a professional. An agent who speaks your language and Spanish is a great help. They should be able to guide your through all of the steps of moving your money safely into Colombia through a reputable brokerage/security firm. They should be able to help you properly register your funds in Colombia - this is of utmost importance. They should be able to introduce you to a reputable attorney who will assist you and protect you in the course of your sale.
We do offer all of these services and would be happy to assist you to make the right investment in Colombia.
Photo Courtest RGB Stock