Ecuador offers foreigners the opportunity to own property in Cuenca with all the rights and privileges enjoyed by Ecuadorian citizens. All that is required for you to purchase a property is a passport. You can come in on any type of visa and buy property even the 90 day tourist visa that is automatically stamped into Canadian, British, and US passports upon entry.
- The Purchase Process
One
great thing about Cuenca is the security one has when buying a property. There is one central Property Registry office which holds all the deeds for properties located in and around the city of Cuenca. That same office also holds all the records for liens and mortgages. The Property Registry office is the ultimate authority when it comes to anything to do with titles, liens, and mortgages and none are valid until and unless they are registered there. Lawyers and Real Estate agents are able to obtain a detailed Title Report showing the current legal status of the property. The first step in the purchase process is to sign a notarized Purchase Agreement with the seller. The Purchase Agreement is legally binding and prevents the seller from raising the price on you or selling the place out from under you while you are waiting for the results of the Title Report. The Purchase Agreement should contain all agreements made between you and the seller, things such as timing of payments, items included in the sale, etc. Earnest money is paid upon the signing of the Purchase Agreement. The tradition in Ecuador is that the earnest money, normally 5-10% of the purchase price, is given to the seller to hold as a down payment. In about 60% of cases we have been able to convince sellers to let the earnest money be put into Escrow. Once the due diligence has been completed and you have gotten the remaining balance of the purchase money together then it is time to proceed to the signing of the Final Deed. In order to become the legal owner the deed must be registered in the Property Registry office after signing.
- Who pays us? We, like most local Realtors, serve as transactional agents who introduce buyers to sellers and help them to agree on price and terms. In Ecuador Real Estate agents get paid their commission by the seller, not the buyer. We charge the seller Ecuador's standard commission which is 3% of the final negotiated sales price.
- Getting your money into Ecuador
The most common way a purchase is done is by wiring money directly into the seller's bank account with an international wire transfer. Contrary to what many people assume, opening a bank account in Ecuador is not necessary in order to buy property. It is a good idea to open a local bank account at some point so that you can set up automatic bill pay for utilities and services such as Cable or Direct TV and high-speed Internet. It would be good to bring a few checks with you; foreign checks can be used here but they have to be deposited as they take about two weeks to clear. A foreign check can often be used to make a deposit on a property or for funding Escrow. ATM machines in Cuenca allow you to take out up to $600 per day from foreign debit cards.
- How long does it take to buy? Although the least amount of time one of our clients has ever spent in Cuenca to buy was 3 days, the theoretical minimum time needed would be only 2 days. The purchase process takes a lot longer than that but by giving your lawyer power of attorney to deal with the remaining steps you only need to stay for as much time as it takes to select the property and negotiate the terms of the sale. The purchase process can take as little as 21 business days assuming your lawyer keeps the papers moving through the system as fast as possible. In reality you should probably figure that it will take about a month and a half to get the property title fully registered in your name.
- Closing costs
In Ecuador you as a buyer will be responsible for taking care of the closing costs which amount to a less than 1 percent of the purchase price. That does not include what you pay your lawyer for legal services. Rates vary from lawyer to lawyer but seem to average at around $600 or so. If the seller wants to hire their own lawyer then they can do so at their expense but it should be your lawyer who drafts the documents.
- Tour Fee
We charge a "tour fee" of $12.50 per hour for showing properties, which is recorded daily and will be refunded to you in full when you purchase a property through us. If you do not buy a property through us then that money will not be refunded. For those who have already made the decision to invest in Ecuador the only initial resistance to the hourly charge is because they have not done something like it before. After taking a moment to think about it most people are smart enough to realize that we are not charging an hourly fee on top of our commission, since the hourly fees are refunded. One of the key distinguishing characteristics that set us apart from other Real Estate agencies is that we sit down with you before hand to go over your needs in detail so you don't wast time and money going around looking at properties are not the right fit for you. Property Tax
Property taxes in Cuenca are so low as to almost be beyond belief; all properties featured on this website have property tax rates of less than $300 a year. Property taxes for a given year are assessed on the first business day of the year and can be paid at any time during the year.
- Financing
In Ecuador the vast majority of all purchases are made with cash. Financing in Ecuador is hard to come by and very expensive even if you qualify for it. Other than the rare case of owner or builder financing, we can only work with buyers who can come up with the entire purchase price in cash.
- Investment Visa
Qualifying for an Investment Visa (often referred to as residency) allows you to stay in Ecuador indefinitely. It requires you owning a property whose tax assessed value is at least $25,000 plus an additional $500 each for your spouse and dependents. In Cuenca tax assessed values are considerably lower than actual market values. In general you need to spend at least $60,000 on your property in order for it to have a high enough tax evaluation to qualify you for a visa. Rural properties have even lower tax assessed values and most won't work as a qualifying investment for Visa purposes. Be sure to let us know if you are planning on using a property as a qualifying investment for an investor's visa so we can check the tax records before you buy.
- Real Estate in Ecuador
Real Estate in Ecuador works a lot differently than you may be used to. In Ecuador there is no such thing as a multiple listing service where you can see all the properties on the market in one place. Buyers typically start the property search with one Real Estate agent and then if they can't find what they are looking for with them, continue on with another agent. If you are working with another Real Estate agent or agency and are interested in one of our properties then you will have to contact us directly. Ecuadorian law allows for the voluntary formation of Real Estate unions such as the one we have here in Azuay country called ASOCOBIRA. Often these unions put a "license number" on their membership cards to try to make themselves appear to be an industry regulator. The primary purposes of the Real Estate union here is to attempt to limit competition in the marketplace. They only get involved in consumer protection issues once in a while if a Real Estate agent does something really egregious and they are not a union member. Almost any expat who has been here over six months will be able to tell you all kinds of horror stories involving an agency in Cuenca who is affiliated with the ASOCOBIRA. We are not a member of the local Real Estate union mostly because the idea of paying $3,000 for the privilege of voluntarily subjecting ourselves to our competition just does not sound very appealing. While working with a full-time Real Estate agent does not guarantee that you will get a good one, working with somebody who dabbles in Real Estate is guaranteed to get you a bad agent. Beware that for all practical purposes consumer protection laws don't exist in Ecuador. Whether you become a victim of price gouging, outright fraud, or just plane incompetence, the end result is the same.
- Next Steps
It's best for you to make an appointment with us as soon as have your plane ticket and know your exact arrival date. Travel can be exhausting so scheduling an appointment for your second day in Cuenca is ideal as it allows you to get some sleep and recharge first. We do not work like traditional Realtors who run around frantically juggling incoming calls and barely listening to a word you say. We will pay attention to what you have to say and try to understand where you are coming from so that we can meet your needs. Our goal is for you to end up with several good options to choose from that you would be proud to call home. By scheduling our time in advance you ensure that we will be able to get immediate access to the properties you want to see.
- Additional Info
One of the best sources for more information on the reality of Real Estate in Cuenca is the articles we that we have online. If you need more ammunition to convince your family or spouse that looking oversees to retire or purchase a second home makes sense, then we have an article called "Why Cuenca". you may also want to check out the website www.fleeamerica.com
For more information about us see the contact info page or about us page on this website. Additional information regarding Real Estate related referrals such as Lawyers, Surveyors, Builders, etc will be provided as needed once we begin working with you on your property search.
