Buying Land in Ecuador

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Buying Land in Ecuador

Jan

17

2012

I’ve been doing some research and as my understanding goes the process is:
1. Find the land you want to agree on a price with seller.
2. Do a promisary note to purchase the property.
3. Put down some earnist money (can this be a U.S. check?)
4. Set up a power of attorney to do the closing and paperwork to get the fee simple deed. (Since the visit is not long enough to finish the purchase.)
5. Get title insurance.
6. Send the balance of the money to the power of attorney. (Again can this be a U.S. check or do i need to open a savings account when in country?)

Let me know if I am missing something.

Thanks,

Dave

In: Ecuador Living Asked By: kelver [3

]

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3 Answers

Answer #1

Hi Dave, for land you would go straight to a contract ( “Compra-Venta” ) and skip the promise to pay. Depending on the seller a US check may or may not be acceptable. I carried enough cash to place 10% earnist with the attorney. If the seller is not Ecuadorean there is a chance you will settle the remainder of the money with a wire transfer or check. If the owner is Ecudorean then a bank check is the norm to settle the final payment.

Opening a bank account is not straight forward as a non-citizen. You will actually need a sponsor ( or two ) to open the account.

Use a very reputable attorney to accomplish both tasks. If you are doing business in Manta drop me a line and I’ll introduce you to the gentleman I use and trust. bflemming@pacbell.net

Answered By: BruceFlemming [20

]

Answer #2

Two comments – title insurance is rarely used here because of the way properties are registered and the very different role notaries play. Secondly, there is no need to open an account. What I recommend to people is to wire the funds to your attorney so that they can distribute the money to the seller, notary, registry of deeds, etc.

Answered By: Ecuador Info [52

]

Answer #3

Kelver;

The process can be basically as you describe, however I do not know how much you know or how often you have been here to talk to people so I will respond based on what my experiences have been.

1. Finding the land (if you are looking for land) or “real” owner might be a task. Land, homes, condos etc are seldom listed (unless you are looking in a larger city where there are real estate agents and firms). This can take some time, since “everyone”, and I do mean everyone has land/property for sale…either their father, cousin, brother, friend….etc. has something for sale that they know about and will sell it to you even if they own it or not.

2. There are a couple of different ways to promise and secure the land prior to final payment being made, one is a convenio de reservacion…private between buyer and seller, notarized but not registered, the other is a promessa de venta, the promessa will add to the cost of your total closing, $500 to $1000 and even that can be a private document and not registered.

3. Normally checks are not accepted for earnest money deposits, especially from a bank outside the country..foreign checks take a while to clear and can cost the depositor in fees to process…I made the mistake of taking an Ecuadorian check for repayment of a deposit that I had made on a piece of land that title could not be cleared on and lost 5% of the checks value when I put it in the bank in the states. It may very well be the same here, or the fees may make one not want to take a check. You are allowed to take $10,000 US dollars outside the US at a time, cash would be best to have.

4. Setting up a POA is also a process here and unless you have an attorney you should find one and ask around for references….attorneys are not well liked by Ecuadorians as they are not always good and most of them will be the ones that can harm you the most. I have had to go through many attorneys just to find competency, honesty and integrity…the laws are very different here on attorney client privilege and there is not really a judicial review board, so it can be the wild west.

5. Title insurance is not normally done, however you can get it. It can slow down the process since you will only be able to use the attorneys that the title company recommends or uses to do the opinion letter for the property. If you wish to use a title company based in the USA, make sure you ask for an exclusion list or exactly what is covered by your title insurance. You may find it not worth while.

6. There is a question of sending funds to someone other than the seller and even that is dangerous. There are basically no such things as escrow accounts here so your POA may just put the funds into his or her account that mixes all funds for everything. Again, I would recommend you get referrals from people that have used attorneys in the area you wish to purchase your property to get to the best attorneys. I have heard horror stories and have my own with attorneys here. Be careful.

Opening a bank account has gotten a lot harder to do over the years. Your attorney might be able to assist you with that though depending on the circumstances. In this country it is often a matter of who you know, now what you know.

larryp

Answered By: LarryP [322

]