Are you looking to make an investment in buying a property in Latin America? If yes, then Medellin, Colombia, is the best destination for real estate investment. The city offers several reasons that attract investors from all around the world to make a long-term investment.
It is not just because of the friendly and welcoming people of Colombia. The city also offers plenty of other reasons as well, such as landscapes and climates that suit all tastes. One of the main reasons for attracting savvy investors is that Medellin is an affordable destination and serves as one of the strongest performing economies in the country.
The city offers many benefits of investing in the Medellin real estate market. But, sometimes, it may become challenging for foreign investors due to the lack of information and language barrier. This guide will help you to know the steps of buying real estate in Medellin, Colombia.
The Colombian government knows the importance of investment by foreign investors. Therefore, they have made the process of buying property in Colombia easier for foreign individuals. It involves the same process just as for local investors; the only difference lies in the requirements of a valid passport and sufficient amount for the purchase.
Foreign investors must also know that buying a property in Colombia can also lead to a residency permit for them, but it depends on the size of their investment. Foreign investors can apply for a 1-year or 5-years visa.
Steps to Buy Medellin Real Estate
It consists of four main steps to buy real estate in Medellin. Have a look at them.
- Negotiation And Verbal Offer
In the first step, the buyer negotiates with the seller in terms of the price of the property and terms. Here, it is advised to take the help of an experienced and reliable attorney who understands Colombian real estate law and has expertise in performing a title search and other background checks.
The lawyer will also check for various required certificates that include a history of the property, the amount of taxes that have been paid, and the confirmation that the taxes relevant to increasing the value of the property have also been paid.
It is always recommended not to buy properties with hidden complications, such as debts or a doubtful history of ownership. It is so because fixing these things can be a long process.
If you are interested in buying an apartment building, it is recommended to check for any kind of unpaid administration fees. Some apartment buildings are not good at collecting administration fees from owners, as a result of which, it can lead to having insufficient funds for maintenance.
Once you check everything with the lawyer, not it’s time to negotiate the price. There is no restriction on negotiating the property price.
- The Purchase Agreement
After getting a verbal agreement on the price and terms of purchasing a property, the lawyer will prepare a purchase agreement. This agreement is a contract between the buyer and the seller which states the intentions of buying and selling at a specified price.
You must also know that Colombians are sophisticated negotiators. So, don’t be surprised when the seller renegotiates the price right up before signing the purchase agreement at a notary. You are also allowed to make changes if you want before signing this agreement at a notary.
The clauses included in typical Purchase Agreement
Some of the common clauses that are included in a typical purchase agreement in Colombia include:
Price and what items are included
It includes the price of the property and other items, like parking, storage, appliances, etc. Always remember that you may have a separate title for parking. Also, the owner has the right to remove anything that is not a part of the apartment, like light bulbs and appliances. So, you must ensure what is included in the agreement.
It is the amount that is paid to the seller to secure the deal. In Colombia, it is usually 30% and can be negotiable.
It is the clause in which the down payment can be decreased to 10-20% if the buyer does not continue with the deal. If the seller does not want to continue with the deal, he/she can be charged for a lien on the property where the penalty amount is agreed to 10-20%.
Settling of mortgages and liens
The transfer of property to the buyer in Colombia is impossible unless the property is freed from mortgages, taxes, leans, and administration fees.
Commercial and declared value
Like various other countries in Latin America, Colombia involves the gap between commercial (the amount that the buyer pays) and declared values (the price of the property as per the government).
Taxes, rent, and administration fees
These charges depend on the purchase date. Taxes and administration fees are paid yearly and monthly, respectively. If it is a rental property, the rent must be prorated.
When to sign the agreement
Along with all the necessary details, the agreement will also include the date, time, and location for the final closure of the deal.
- Closing At A Notary
If everything goes well as per the purchase agreement, the closing of the deal happens on the specified date with the signing of titles, transfer of funds, and the receiving of the keys of the purchased property. If there is an issue, this closing date may get postponed.
- Getting A Title
If everything goes well with the closing, the lawyer ensures that all things are done correctly with the certificate that handles titles in Colombia. It is done under the certificate names as “Registro de Instrumentos Publicos”.
If you are interested in Medellin real estate, you must be familiar with these steps. Also, hiring a lawyer for purchasing a property for sale in medellin Colombia helps you in making the entire purchase process easier and stress-free. Moreover, the lawyer has an in-depth understanding of Columbian real estate laws.
Be ready to make the best investment and buy homes for sale in Medellin and gain ownership of Colombian property.