How to find Affordable Real Estate in Chile
The Do’s and Don’ts of Buying Real Estate in Chile
Acquiring or even selling property can be a complicated exercise for the inexperienced; the following is an outline of the basic principles of the issues faced when buying or selling a property and in particular, to help those looking for affordable real estate in Chile.
Keep in mind that most foreigners who have bought in the past, without experienced professional assistance, ended up overpaying for the property. It is called locally as the ‘Gringo factor’.
There are several residency options to select from if you retire in Chile. Lifestyle locations around Osorno in the south are amongst the most popular locations in Chile, according to many expats, but others might choose to be closer to Santiago, the capital of Chile which has all the benefits of a major sophisticated city.
Chileans, like those elsewhere in the world, hold specific locations as being more valuable if they are a popular tourist destination. However, if you are prepared to live just outside these areas the prices can drop dramatically. Strong demand for homes in some parts of Santiago and the surrounding areas have caused rising prices during the past several years and prime farmland throughout the country has also become more expensive too but is still very good value when compared with other countries, particularly in the northern hemisphere.
Using a Google search will most likely find you the property you can afford to buy. Keep in mind home or farm mortgages for foreigners will be hard if not impossible to get unless you use the same bank in your home country with a good credit history there, backed by strong assets. One option here is to negotiate a vendor mortgage instead.
If you are not a Spanish speaker, it is going to be comparatively slow going without assistance, as there are few real estate companies or real estate services tailored specifically for foreigners. You will discover that almost all doctors, lawyers, at least in the larger law firms and other professionals speak some English in Chile, however, workers, tradespeople, etc seldom do.
Paperwork is needed for everything, so you should be prepared with your RUT ( local tax number ) if you are really serious. You will need it sooner or later. It is not difficult to get if you are introduced to the right advisors early on.
When you tell an estate agent that you want to inspect a property, in most cases, they will ask you to sign an “ordena de visita” (a written authority that he has permission to act for you, the client). If the property is a farm you may be asked to sign additionally an NDA. (A non-disclosure agreement) so you will keep confidential any farm business information that you might be told.
Once you find a property you like that is in your price bracket, you will need to ascertain the title is correct. To enable you to get started on reviewing the property’s legal history etc you will need to appoint a Notary ( you do not need a lawyer as well, but many expats still request one ) who will want the property’s tax number, the name of the owner, and a copy of the property’s title. If you are buying a farm it really is important that you also check out your rights to water on the property and its access to 3 phase power.
Prior to purchasing any property, your own due-diligence should include; neighbourhood authority checks ( town planning ), speaking to local shopkeepers and/or neighbours to get relevant local information. As well, in many locations, you may be able to send a building inspector or appraiser if you have any doubts over the property’s construction. If it is a farm you might want to get a local agronomist to write you an independent report on it.
Professional fees charged to the buyer are usually between 3-4% depending on the location of the property. The actual closing is normally held within the Notary’s office representing the buyer.
So far as transaction costs go, you have to keep in mind that legal costs in Chile are not as expensive as they are in America or in Europe.
The thought of buying productive farmland beyond your home country is beginning to catch on these days and Chile is one country which has received considerable attention in this regard. Because of Chile’s solid financial situation and stable politics the country risks to your investment are really very low.
Usually, a foreigner who has owned a number of real estate properties within their home country has an advantage over most locals, who tend to buy and hold properties for long periods of time, thus not gaining the experience of buying and selling.
When you need to sell a property in Chile, your appointed broker will give you a property evaluation and offer professional property marketing with international exposure options. It is crucial you find an experienced International broker who has the skills to do this unless you wish to sell only to nearby locals at a discount.
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.