Buying in Ecuador

      In Ecuador, we don't have real estate agencies or property management agencies in the traditional sense. Down here these entities function more like what we might call "referral agencies". They mostly serve to connect the buyer with the seller. There are few legal requirements for realtors down here and most Ecuadorian buyers have very low expectations of their real estate agents. There is no multiple listing service in Ecuador and no centralized database of for sale properties. Many legal obligations and liabilities that realtor would have in a country such as the United States do not exist here or are the legal responsibility of Notaries and Attorneys.

      The seller pays the real estate agency 2-3% of the money received from the buyer and the buyer does not pay any commission. The real estate agent does not represent the buyer or the seller. After making the introduction, the real estate agent may help both parties make an agreement, but typically, the agent will step aside and let the buyer and the seller have an informal negotiation. If an agreement is made, the realtor generally is not involved again until the closing when the seller, upon receiving the money from the buyer, will pay the agent his commission. The buyer is responsible for verifying the integrity of the title and verifying that the property is as advertised. The lawyer and the notary are legally responsible to confirm the identity of both parties and to assure that the agreement is both clear and agreed upon by both the buyer and the seller.

      Ecuadorian law has very few requirements for real estate agents. Most of the law deals with exclusive listing agreements and rules for how real estate agents resolve disputes. It is not legally or culturally required for Ecuadorian real estate agents to protect the interest of the buyer.

      Even Ecuadorians, with an understanding the language and the culture, often become victims of incompetence and fraud while attempting to purchase property even though they will usually have a lawyer assisting them. Only somebody who has their boots on the ground, pounding the pavement every day, working full-time in the real estate business can know what it takes to repair common title defects, evade common mistakes that can cost you time and money, avoid excessive capital gains taxes, not get taken by real estate scams, know what is a fair price, and take advantage of market trends.

How We Do It

      In order to able to be the first Real Estate company to adequately serve both the Ecuadorian and Foreign clients, we have developed two levels of service. One level that is compatible with the typical Ecuadorian referral system and a much higher level of service which meets the needs and expectations of most English-speaking foreigners.

      Most English-speaking realtors operating in Ecuador have given up all hope of coming up with an open, honest, straight-forward, and fair standard for dealing with their clients. They just charge you "gringo" commission rates and fees and then turn around and charge their Ecuadorian clients half as much.

      Our approach to doing business is to present all the facts and trust our clients to be able to choose the level of service that is required.

      To protect your interest it is absolutely critical that we provide a much higher standard of service than the 3rd-world standard currently in place in Ecuador. Many standard legal practices here are irresponsible, reckless, and downright frightening. The concept of an escrow company does not exist here and the seller is often expected to hold the buyer's deposit money until through the due diligence process. We have been able to convince lawyers to act as an escrow although getting the typical Ecuadorian seller to understand why we do that can be very difficult. Basic concepts like "conflict of interest" and "client confidentiality" are not generally understood in Ecuador. We often find ourselves construing contracts to protect our clients interests and then presenting them to a lawyer so that the Spanish legalize can be added and then verifying that the essential aspects of the agreement still remain intact.

      In reality a buyer has no real representation in real estate transactions unless they contract with us at the Buyer's Agent service level. Local realtors are in the real estate referral business and simply do not have the desire or attention to detail to perform at a level that is needed for a buyer who is not willing and able to do their own due diligence on both the physical property and the legal paperwork. There are some Americans who do real estate work here part time but most of them don't know the local language or the culture, let alone what is really going on with the market. They rely on bilingual assistants to get stuff done and are absolutely unqualified to help you with the due diligence process which is absolutely critical in this under-regulated environment.


Tour Fee

      We charge a "tour fee" of $15 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 the money will not be refunded.

      The tour fee allows people who are not yet ready to buy to be able to see properties without feeling guilty; it takes the pressure off so that you don't feel like you have an obligation to buy something through us.

      Among those people who have already made the decision to invest in Ecuador the only initial resistance to the hourly charge is because they have not done 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.

      Although we have a great selection of listings in our inventory to choose from, there is no MLS in Ecuador and it is possible that you may not find the property that you are looking for with us and have to continue your search with another agency. In that unlikely event then you would end up being able to walk away without feeling like you owe us something.

      This policy, like all of our policies, applies equally to our clients who are Ex-Pats as well as our clients who are Ecuadorian.


Referral Service

      Our "Referral" service connects you with the seller of the property you seek. If you choose the referral service then you will not pay us any commission and we will not "represent" you, although we will provide translation services for the negotiation with the seller as well as market data to help you know the relative value of the property you are interested in. We then will collect a 2-3% commission from the seller: the standard for Ecuador.


Buyer's Agent Service

      Our "Buyer's agent" service is for the client who wants to be professionally represented during every step of the buying process. This is what most people choose and how we work unless somebody specifically requests for us to serve only as a referral service. After you select your favorite property, we will help you negotiate the best deal possible, saving you thousands of dollars in most cases. Once a price has been agreed upon, we will oversee the due diligence process, reporting the results to you every step of the way.

This service requires a 2% commission to be paid by the buyer. In this case we still charge the seller a 2-3% commission for finding them a buyer, but we also provide you with the following services:

      • Listen to what you are looking for and help you analyze your specific needs and wants; advising you along the way of common oversights people make when selecting a property in Ecuador.

      • Help you understand the market value of the properties you are interested in based on what similar properties have sold for and assist in presenting that information to the selling party when it strengthens your position.

      • Advise you of issues which may affect the purchase of the property such as boundary disputes, multiple owners (which can complicate agreements), defective titles, liens, loans, assessments, or any other thing that might cost you time or money.

      • Seek out any potential problems with the physical property, such as, foundation issues, leaking roofs, the presence of mold or mildew, erosion problems, failing elevators, broken emergency backup generators etc.

      • Take you back for additional visits to your favorite properties to verify additional details and help you evaluate which one is the right property for you.

      • Give you several key insights into the Ecuadorian culture to allow you to get the best price when we get to the negotiating table. We will help you negotiate the best deal using our tried and true negotiation tactics.

      • Help you set up a savings or checking account.

      • Advise and help with transferring/converting money and paying the seller.

      • Provide you with a detailed written description of the title transfer process so that you know what will be involved and what to expect at each step.

      • Get a certified report from the property registry office verifying that the property is free of any liens or encumbrances.

      • Verify the seller's identity documents are legitimate and match the name on the title.

      • Verify that the title accurately describes the land being sold and if not then incorporating more detailed information such as floor plans, blueprints, and surveyors' maps into the new title.

      • Verify that road access and sewage access rights are specified in your new title irregardless of whether or not they are in the old title.

      • Confirm the availability and approximate connection costs for Potable water and Electricity services.

      • Inform you about the Internet options available and provide you with a portable loaner USB MODEM with two weeks worth of free Internet service to tie you over while you are setting up your permanent service.

      • Help you to appropriately register your purchase in a way that won't make you receiving your title dependant on the seller paying over inflated capital gains taxes.

      • Balance the often conflicting needs of qualifying for an Investment Visa while not raising property tax so high that you make enemies with the neighbors.

      • Work with seller to ensure that any agreed upon repairs are completed satisfactorily.

      • Show you some local furniture, home furnishings, and appliance store options and provide you with advice on how to deal with purchasing, installation, and warranty service.

      • Work with seller to ensure that any agreed upon repairs are completed satisfactorily.

      • Transfer the utility bills into your name and help you set up automatic bill payment if so desired.

      • Provide accurate English translations of all the documents you will be signing.






























Cuenca's Best Properties • Edificio Acropolis suite #501, Jose Peralta y 12 de Abril • Cuenca, Ecuador
Telf. 089 550 186 • e-mail: michael@cuencasbestproperties.com
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