Real Estate Agent Customs in Chile
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First, we would like to caution that most real estate agents in Chile are honest and well intentioned. There are many good, ethical, and professional real estate agents in Chile. There are however a few things that foreigners looking to purchase real estate in Chile should be cautious about when dealing with real estate agents in Chile, and should understand the limitations of what to expect from real estate agents in Chile.
Real estate agents and agencies in Chile are completely unregulated beyond basic consumer protection laws in Chile or basic contract law in Chile. Anyone in Chile can be a real estate agent simply by initiation of activities with the Chilean IRS as with any other service business in Chile. There is no licensing requirements or other oversight of real estate agents in Chile beyond that.
Real estate agents and represent sellers and or buyers. In most property purchases, a real estate agent will receive half of the commission from the seller and half from the owner, based on what the seller and agent agreed to at the time the property was listed. It is very common for properties to be listed with multiple real estate agents in Chile. It is also common in some parts of Chile for real estate agents to simply not know the seller, until they find a buyer. This is referred to as “poaching” among real estate agents in Chile.
Many real estate agents in Chile are not in fact full time real estate agents. They may only sell real estate as a side business in Chile. They are often very geographically bound, and thus agents for one part of Chile may know very little about another part of Chile; sometimes even within the same part of a particular city. Real Estate agents should come from the area in Chile you are looking to buy in order to get the best deals. A real estate agent in Santiago for example will likely not be able to assist you with buying real estate in Chiloe.
A few precautions should be taken when dealing with real estate agents in Chile.
Never allow a real estate agent to draft legal contracts or conduct title searches. These must be done by a qualified attorney and only a qualified attorney. Be aware that anything a real estate agent tells you, may or may not be true regarding such things as how clean the title is of debts and liens, property boundary disputes, building permits, and so on. They are at best simply not qualified to make such claims.
The only way to know for certain that a property title is clean is to have a full and complete title search conducted by a qualified attorney, along with contracts drafted carefully and specifically for that purchase, signed in front of notary public, and fully registered at the regional title registry.
These should be conducted by YOUR ATTORNEY and not an attorney provided to you by either the seller or the real estate agent. Special care should be taken at all times to avoid conflicts of interest between attorneys, real estate agents, buyers, and seller in Chile, regardless of how nice the seller or agent seems. The professional conduct and concepts of conflicts of interest are not commonly understood in Chile, especially in relation to real estate purchases. It is your responsibility to take extra precaution against such situations arising when you buy real estate in Chile, as there is no governing ethics association for real estate agents in Chile to regulate such things.
Start by retaining your an attorney early in the process to assist you with finding, negotiating, and overall protecting your interest when buying real estate in Chile. With basic precautions taken early on in the process, many of the potential problems can be eliminated from before they start.
Post available in: English