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Be careful out there folks!!!

The Cuenca Gringo feeding frenzy is spreading!  We have seen more folks looking at Real Estate this week than we ever have before!

There are far too many lookers and buyers here now, than there are decent properties for sale.

Naturally there are properties available, but when dozens of folks have looked at them and passed, you have to figure that something is not quite right.

And now, it seems that  there is the inevitable rise of the kind of "owners", "flippers",  and "agents" who will take advantage of the buyers who arrive desperately wanting to buy something.

So here are some words of advice:

1.  In Ecuador, not everything that could affect a property, is recorded.  This is especially true if a parent has died, and one of the kids is selling the property that you just fell in love with.  If you wish to purchase a property like this, you must make sure that all heirs have signed off. 

2.  Construction that has been done recently may not be recorded, and you could find yourself on the hook for thousands of dollars of unpaid construction bills.

3.  Utilities are handled differently here, than in the US.  If you forget to get the owner to clear all the electric and water bills (and more), you might have to pay years worth of back bills, before you ever get the lights back on.  (When we bought our beach house, the kids had not paid the electric bill for 4 years, and it took $1,900 to clear the account--we caught it in time.)

4.  "Agents" do not write contracts here--lawyers do...  So, get one early on.  A good lawyer will check out the heirs, the bills, the survey, the government regs.

5.  If you are buying anything that is unfinished, don't pay all the money up front--wait until everything is completed before paying the last amounts...

6.  If you want a piece of property, and there is a lot of paperwork involved that could take time, get a preliminary sale doc, that says that you intend to buy the property, which includes all the details, and is signed by all parties, AND IS RECORDED AGAINST THE PROPERTY!  I would only trust a lawyer to do this properly.

7.  If you are buying in a new subdivision, keep your money in your pockets.  If you wish to reserve a lot, find out what it takes to reserve it, until all the work is done.  Make sure that any payments due by you are closely aligned with progress of the project.  NEVER pay it all up front. 

8.  Association dues can sky-rocket.  If you buy a condo in a high rise, or a planned development.  Find out who gets the money for the dues.  Sometimes the builder pockets about 50% of the dough.  Make sure that the dues go for maintenance and security and insurance--not excess profits for the builder (or his friends)

9.  If you have questions about boundaries, have a survey done.  A little dough up front compared to a lot of grief down the road.

10.  When you take title, especially if you are using it to justify your permanent visa, pay close attention to the assessed value (not what you paid for it), and the actual order of title between you and your spouse.  Your visa lawyer will advise you...it is much easier to get it right the first time...

11.  The Notary in Ecuador has much more status and responsibility than those in the US.  Here,  he is the final official who will determine that a property transfer is legit.  For example he has the seller hold up his hand to swear that all statements in the documents are true.  He carefully examines the contract written by your lawyer (in Spanish).  Now, if you don't understand Spanish, he will ask if you understand, and he might require, or strongly suggest, that you get an English translation.  I think it is a good idea, always.

When the notary puts his seal on your contract, you are on the way!  But...you are not finished...you must record your contract and must visit the tax office.  Your lawyer will assist you here.  You have to have the property taxes current, and have proof, before you can take the contract over to be recorded.

There's lots more, but this is what comes to mind right now...good luck, and welcome...

 

 

 

 

Posted on Mon, October 25, 2010 at 06:39PM by Registered CommenterBob & Roxanne | Comments4 Comments

Reader Comments (4)

Thank you for providing a candid update as to what the current real estate picture is like in Cuenca. One can only hope that Cuenca does not follow down the same path that was taken by Costa Rica and Panama when they were repeatedly named the top retirement destinations. The result was rampant overbuilding, price gouging,and flipping of properties. The small communities in the Guanacaste area were completely overwhelmed by the big money developers. The infrastructure could not handle it. It was a mess.

The bubble has now burst in both Costa Rica and Panama City. There are many more properties available than there are buyers. The "flippers" are now left holding property that they are going to lose money on.

I look forward to reading your blogs and getting an accurate assessment of how things really are.

My wife and I were planning on spending the month of January in Cuenca, to see how we liked it, and possibly look at purchasing something there.

We will now have to give this some further thought, as I will not play the,"Gringo real estate game" that appears to be going on with the locals there.

October 26, 2010 | Unregistered Commenterpaulnbonnh

Hi Paul...Thanks for the kind words...
Please don't pass on Cuenca, because of my words of advice. Cuenca is a beautiful place, a jewel in the Andes. It is what happens when a society is allowed to grow to maturity by itself, because of natural isolation. The indigenous people did it right! As a group, they are the most prosperous in all of Ecuador!

Just because there are a few bad apples, doesn't mean that the barrel is necessarily rotten...

It is just harder to find the place that you will call home--it is not impossible!

And besides, the Gringo explosion is happening everywhere--Boomers have changed things ever since 1945, and they still are doing it!

In my opinion, Ecuador is a great place to settle, and Cuenca is right for a whole bunch of folks!!!

October 26, 2010 | Registered CommenterBob & Roxanne

Hello Bob and Roxanne,

Thank you so very much for your response. My wife Bonnie and I will be visiting Ecuador for the month of January. You hit the nail right on the head when you made the comment about a "few bad apples".We spent a total of four years in Latin America. We found 99.9% of the people to be kind, generous and loving people.

I have a few questions for you if I may, that are not covered in your blog. Is it possible that we could communicate outside of the blog?. I have included my full e-mail address.

If you are overwhelmed by such requests, and choose not to respond; I will fully understand.

Regards,

Paul and Bonnie Hall

October 27, 2010 | Unregistered Commenterpaulnbonnh

What are your thoughts on Salinas and the Santa Elena penisula. Do you think it wise to purchase real estate for rental income during the high season and personal use during the down season? Muchas Gracias.
Mike

August 14, 2011 | Unregistered CommenterMike Hinshaw

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