Real Estate in Colombia
If you are thinking about retiring or moving to Colombia or if you’d just like to have an unusual location for your vacation home, choosing to purchase Colombia real estate is not as difficult as you might think. Below you’ll find some useful information designed to help foreign buyers learn the ropes of buying real estate in Colombia.
Buying real estate in Colombia is going to work a little differently than in the United States or in most countries of which you are a resident. Generally, countries’ banks do not offer mortgage loans to foreign residents. That means you won’t be able to head to the nearest Colombian bank and get approved for a home loan unless you are married to a citizen of Colombia or have a relative calling the country home.
You may be able to take a loan out in your home country to purchase the property. However, many banks will not permit this either. Many people planning to move to Colombia either take out personal loans to cover the costs or sell their primary residence to cover the costs of the new properties. When the U. S. housing market was stronger, this was a great idea because the difference in prices between real estate in Colombia and the U. S. was great.
If you are serious about buying Colombia real estate, you need to decide on the right city for you. This is where you are going to be living so you want to make the right choice. Keep in mind that you’ll pay more for living on the coast and for living in the quieter areas around the cities. Consider renting for a few months while you decide on the right location.
Like any country, Colombia real estate involves some laws that you should be aware of before making a purchase. For example, you do need to have your passport in order to complete the process. That is all you need. However, you will be required to pay property taxes. These are assessed by the local governments and are paid annually. Most of the rates are more reasonable in Colombia than in the United States but you should still talk to your real estate agent before you complete your purchase so you know what you will be paying in taxes.
No matter where you choose to look for real estate in Colombia you will find some wonderful examples of property that can fit your needs. The country is booming with foreign investors and with people wanting to move into the beautiful country so new constructions are popping up all over the place. If you can get in on these new developments early, you can sometimes secure a cheaper price than what you will be charged as the property nears completion. Paying the down payment in full and in cash through international wire transfer can also cut the cost. Keep in mind that even in cities like Bogota, Medellin, and Cartagena, the square foot cost of property is very reasonable.
When you find a piece of Colombia real estate you like, make an offer. In most cases, you’ll want to offer less than what the seller is asking so you have some room for negotiations. Your real estate agent can give you some guidance on how low to go on the price. Once your offer is accepted, you will need to complete the purchase agreement and pay the down payment. Typically, the down payment is going to be 20% to 30% of the purchase price. Keep in mind that if you back out of the purchase you will lose all or part of that down payment.
Just as in many other parts of the world, the closing is an important part of the process with real estate in Colombia. This is when the agreement becomes official. Funds are exchanged for keys, signatures are provided, and the closing costs are paid. Again, this is another expense you’ll need to be prepared to cover. Normally, the closing costs are going to run between 2% and 3% of the purchase price. The buyer of Colombia real estate is expected to pay those costs.
Paying for the Real Estate Purchase
Buying real estate in Colombia is going to work a little differently than in the United States or in most countries of which you are a resident. Generally, countries’ banks do not offer mortgage loans to foreign residents. That means you won’t be able to head to the nearest Colombian bank and get approved for a home loan unless you are married to a citizen of Colombia or have a relative calling the country home.
You may be able to take a loan out in your home country to purchase the property. However, many banks will not permit this either. Many people planning to move to Colombia either take out personal loans to cover the costs or sell their primary residence to cover the costs of the new properties. When the U. S. housing market was stronger, this was a great idea because the difference in prices between real estate in Colombia and the U. S. was great.
Real Estate: Choose a Location
If you are serious about buying Colombia real estate, you need to decide on the right city for you. This is where you are going to be living so you want to make the right choice. Keep in mind that you’ll pay more for living on the coast and for living in the quieter areas around the cities. Consider renting for a few months while you decide on the right location.
Knowing the Real Estate Laws
Like any country, Colombia real estate involves some laws that you should be aware of before making a purchase. For example, you do need to have your passport in order to complete the process. That is all you need. However, you will be required to pay property taxes. These are assessed by the local governments and are paid annually. Most of the rates are more reasonable in Colombia than in the United States but you should still talk to your real estate agent before you complete your purchase so you know what you will be paying in taxes.
Consider Your Budget
No matter where you choose to look for real estate in Colombia you will find some wonderful examples of property that can fit your needs. The country is booming with foreign investors and with people wanting to move into the beautiful country so new constructions are popping up all over the place. If you can get in on these new developments early, you can sometimes secure a cheaper price than what you will be charged as the property nears completion. Paying the down payment in full and in cash through international wire transfer can also cut the cost. Keep in mind that even in cities like Bogota, Medellin, and Cartagena, the square foot cost of property is very reasonable.
The Process of Choosing your Real Estate
When you find a piece of Colombia real estate you like, make an offer. In most cases, you’ll want to offer less than what the seller is asking so you have some room for negotiations. Your real estate agent can give you some guidance on how low to go on the price. Once your offer is accepted, you will need to complete the purchase agreement and pay the down payment. Typically, the down payment is going to be 20% to 30% of the purchase price. Keep in mind that if you back out of the purchase you will lose all or part of that down payment.
Closing & Extra Costs
Just as in many other parts of the world, the closing is an important part of the process with real estate in Colombia. This is when the agreement becomes official. Funds are exchanged for keys, signatures are provided, and the closing costs are paid. Again, this is another expense you’ll need to be prepared to cover. Normally, the closing costs are going to run between 2% and 3% of the purchase price. The buyer of Colombia real estate is expected to pay those costs.
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