Colombia and Peru Sign Free Trade Agreements with the EU

Ecuador’s neighbors, Colombia and Peru, announced this week that they had signed free trade agreements with the EU.

This puts a bit of pressure on Ecuador, in that exporters from Colombia and Peru will be able to enter the EU with more competitive pricing than Ecuador.

For the time being, maybe Ecuador can get by financing their government with oil proceeds, and the rich earth the Ecuadorians are lucky to have, but sooner or later they’re going to have to focus on building export industries in order to compete with their neighbors.

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The Dirty Side of Real Estate Agents in Ecuador

real estate agents in Ecuador

“How much for the house?” I asked.

“$175k.” The real estate agent in Guayaquil, Ecuador responded.

“Humm, that’s funny.” I thought.

Cause I just spoke to someone (the owner) 5 minutes ago who told me the place was for sale for $170k.

But I wasn’t surprised.

You see, in a country not used to using real estate agents, most sellers and buyers don’t like paying commissions, they’re not “broken in” to it like we are in North America.

So some agents at times will “markup” the property like this in order to make their money.

And buyers and sellers know this, and often prefer to scout out the owner of the property to do deals directly, bypassing the agent.

But this isn’t all…

Other agents will show you one of their listings, then out of the blue tell you that you, the buyer, owe them a commission as well as the seller.

I’ve seen other agents try to charge a 6% or even 8% commission, which for me is just steep. (Most agents in Ecuador charge around 3%.)

Other agents (foreigners primarily) will charge you by the hour just to drive you around, which is fine as long as they tell you they’re going to do that beforehand.

Which sometimes they don’t.

And many agents in Ecuador will agree to sell your property but only use it as a “bait and switch” in order to lure buyers in so they can sell another property they have a direct hand in.

No mistake about it.

Ecuador, with no organized MLS listing system, remains the wild west of property investing where you really have to know what you’re doing to find the best deals, just like I teach in my full guide.

And yes, there are also a lot of good, ethical agents in Ecuador, too, some of which even licensed, worth their weight in gold.

Just keep “yo’ head on a swivel”. If you know what I mean.

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Ecuador to Issue Bonds if Oil Prices Continue to Fall

The IESS, or the Social Security Establishment in Ecuador, funds 37% of their budget with oil revenues.

If the price of Oil falls under $79 a barrel the government may issue 12 year 7.5% earning bonds in order to help pay the pensions owed through the Ecuadorian Social Security system.

Currently, the price of oil is at $81.

I personally wouldn’t touch these bonds with a 10 foot pole, the risk-reward just doesn’t add up for me based on other more interesting investment opportunities available locally.

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What’s the Cost of Building in Ecuador?

building cost in ecuador Construction off Av. Americas in Cuenca.

Great question.

And one I often get.

It was recently reported that as of June 2012, the cost per meter of construction averages at $314.40.

It’s very variable depending on quality of materials used, but I’d say that’s a good figure to go on.

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Ecuador Black-Listed by GAFI

This week it was announced that Ecuador had been put back on the black list by GAFI, the Grupo de Accion Financiera Internacional, for the first time since 2010 signaling Ecuador as one country of high financial risk.

The main reason for their demotion as stated by the organization is Ecuador’s lack of new legislation criminalizing money laundering for terrorist or other illegal purposes.

The new qualification could be detrimental to certain aspects of Ecuador’s international commerce in that things like Letters of Credit could be made more difficult or complicated to work with.

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