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Checking to buy a home, house, condo, or land….. in Ecuador

After more than 7 years of living in Ecuador, I can honestly say I have a pretty good grasp on Ecuador’s coastal real estate market. Since I have seen property prices rise at a surprisingly rapid rate, I will like to share a great Real Estate NY Times article that I read today and my personal comments on the topic.

For the article visit this link: House Hunting in…. Ecuador

My personal opinion is that the information you receive from online sources and printed material about living or retiring in Ecuador is not current with reality. When they mentioned beach properties in Ecuador between $10,000 to $50,000 US, I would say that in rare occasions you could find a local beach property at that price, maybe you will find a property that is in a remote beach area, or in desperate need of repair, or it has some legal problems and title problems.

Now Ecuador is a great “beach Paradise”, I honestly could say that is still one of the best Latin America destinations to live and retire; just that you have to be ready to pay a bit more than what is advertised at times. If we compare to other retire heavens along Central and South America, I will say Ecuador can offer you more value to your dollar: Political and Social stability, US dollar currency, beachfront property belongs to you, better weather not as humid or hot, growing economy and very warm and welcoming local people.

What you basically have to do to buy at real local Ecuadorian housing price is research the local market, you may have been told that there is no MLS services in Ecuador, but the real truth is that there are plenty of great local MLS services, I know there are in Spanish, but now a days as the industry gets more globalize, I am pretty sure that soon they will be offer different languages platforms.

Here is one Ecuador MLS that I use often for homes, land, condos sale in Ecuador: www.plusvalia.com

I would recommend doing your homework before getting involve with Real Estate agents or Lawyers in Ecuador, you will find a lot of times that this people are not up to date on prices and surroundings areas news. At times even locals or a person like me with years of local experience on developments can oversea markets tendencies or local governments problems, since it is an emerging economy, a lot of local governments are embracing new laws and changes.

This is exactly what happened to Playas just an hour drive from Guayaquil’s airport, it was expected for Playas to be the next beach spot, but Playas has stagnated in time, there has been no improvement on roads and basic services as it was promise, I would say that it has worsen in that past year, and the local Municipality has no mentioned new plans or improvements.

I’m sad since it is a great beach location with lots of sunshine all year round, but unless they are able to overcome their local politics, there is not much that it can be done.

All of these have push all other beach locations along Coastal Ecuador: Santa Elena to increase on price and demand: Salinas, Punta Blanca, Olon and many more are seeing great construction developments supervise by the local Santa Elena Municipality with great basic services improvements.

Few highlights from the NY Times Real Estate article:

  • The housing market in Ecuador, frequently touted as one of the best and cheapest countries worldwide for retirees, has been supercharged for the last five years, with home prices appreciating annually by 10 to 12 percent, Mr. Morrill said. The global real estate crisis of 2008 had no impact on housing prices there, with a large influx of Ecuadoreans returning home helping to maintain a robust market, he said.

  • “Prices are anywhere from 50 to almost 100 percent less than what you’d pay in Panama or Costa Rica, so it’s still very reasonable,” he said. And there are some signs the market may be cooling a bit, with this year likely to see home prices grow by only 7 to 9 percent, Mr. Morrill said. “There are some new regulations that will probably keep the prices pretty stable for a while,” he said. “These are new requirements for developers that will probably keep the inventory reasonable.”

  • Foreign home buyers in Ecuador are predominantly North Americans, though there are also Europeans, Australians and New Zealanders, agents said. There is a significant German expatriate community in Cuenca. Most recently, many Canadians have been in the market seeking homes in the coastal areas.

  • There are no restrictions on foreign home buyers in Ecuador. Bank mortgages are extremely difficult to obtain, and while some of the larger property developers offer short-term financing, it’s largely a cash market, brokers said.

  • A lawyer is not necessary to buy a home, but some brokers recommend that non-Spanish-speaking foreign buyers hire one, which typically costs about $850. The most important way foreign home buyers can protect themselves is by purchasing only properties that can be registered at the Real Estate Public Registry, Mr. Uhe said. “When you read about nightmares with home purchases in Ecuador, it’s all relating to properties that are unregisterable,” he said, which frequently has to do with title issues.

  • In general, closing costs range from about 1.5 to 2.5 percent of the purchase price, Mr. Morrill said. Traditionally, buyers pay the real estate agent’s fee in Ecuador, but that is changing in many areas, agents said. In Quito and Cuenca, sellers now pay that fee, which is typically 3 to 5 percent. In Vilcabamba, buyers still pay the broker’s fee most of the time, Mr. Uhe said.

  • Property taxes on this home are less than $500 a year, and the homeowner’s association fee is about $120 a month, Mr. Uhe said.

Ecuador’s Ministry of Tourism: ecuador.travel/en

Home’s website: quintaesencial.com

Ecuador property blog: conquistadorinecuador.blogspot.com

Government of Ecuador:  presidencia.gob.ec

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Luxury Apartments in Olon, Ecuador (Special Promotion)

Olon Beach is one of the favorite stretches of beach along Ecuador’s Coastline. You have 8 miles of beach; also you can be 100 feet into the water and still only be knee deep and no rip tides. This laid-back coastal city sits approximately 195 km north of Guayaquil’s international airport and just 5 minutes from Montanita, another of Ecuador’s most popular beaches.

You can buy your Ocean view Luxury Condo at the best beach location in Ecuador and finance it through construction.
Prices starting from:
Suites: $79,000 US & Apart.: $92,000 US
Apartments highlights:
• Pre-construction SALE
• 2 -3 Total Bedroom(s)
• 21/2 to 3 Total Bath(s)
• Approx. 1950 sq. ft.
• Balcony in each condo
• Luxury finishes
• Appliances included: microwave, stove and refrigerator
• Pre installed ducts for Air Conditioning
• 1 Car Garage
• Infinity Pool and BBQ area on the beach
• Direct beach access
• Building is on a corner lot
• Outdoors Family Area
• Landscaped Garden
• Building Security
• Fabulous Ocean View

Our financing will be for the 60% of the total price, which will be divided in the following forms of payments:

FINANCING 60%
1. 20% at the purchase/sale contract.
2. 40% in quotas during construction period.

The project is held in escrow during the pre-construction phase by the selected title company, which is an insured account that holds your funds until construction starts.

SPECIAL ONE TIME PROMOTION: Inquiries at linalandivar@ecuadorservices.org

 

 

IMPORTANT NEWS: New Real Estate Regulations in Ecuador as December 2013

SUPERINTENDENCY OF COMPANIES REGULATIONS FOR THE OPERATION OF REAL ESTATE COMPANIES

 

Source: SUPERINTENDENCY OF COMPANIES

Resolution No. SC.DSC.G.13.014 of the Superintendence of Companies comprising the Regulation for the operation of companies that carry out real estate activities was published in Official Register No. 146 on 18 December, 2013.

In accordance with the Regulation, it is mandatory for companies whose corporate objective is real estate activity in any phase (promotion, construction, marketing etc.) and that receive money from clients in advance to delivering housing and buildings to comply with the following:

  • To own the land on which the project will be developed or to hold the fiduciary rights in the trust that owns the land.
  • To obtain the necessary permission for construction from competent public bodies.
  • To possess an economic budget for each project. This must include the duly assessed financial projection, estimated time of completion of the project, the sale price of each housing unit, and the parameters for achieving the break-even point and profitability.
  • To sign and comply with promissory purchase/sale agreements establishing price, payment conditions, closing date and deadline for signing the public deed, and to sign the final deeds of sale.
  • To follow the requirements of the Superintendence of Companies and comply with all provisions issued by it.
  • If companies carry out their activity through a Escrow Business Trust, they must also comply with regulations issued by the National Securities Council.

The Resolution also establishes that for the development of real estate projects that require “financial resources from promissory purchase/sale agreements for such project’s property units, before entering into the agreement a Fiduciary Escrow Trust must be created allowing a fund and trust manager to manage said resources”.

Companies who carry out real estate activity are, among other things, prohibited to enter into private preliminary reservation or promissory sales agreements; to sign more than one promissory sales agreement for the same asset; and to designate money from a specific real estate project to other real estate projects.

The Ombudsman will receive complaints regarding discriminatory or inequitable clauses, without prejudice to complaints made before the Superintendence of Companies and relevant legal action.

The Superintendence of Companies will carry out inspections to verify compliance with the current regulations by real estate companies. In the case of observations, the Company will have five days to give its view on the matter. If the Superintendence of Companies considers that the Company is involved in one or more grounds for intervention, it will proceed to “declare a state of intervention in the company and appoint an intervention supervisor”. The supervisor will issue a report regarding the general situation of the company. If the company cannot apply corrective measures to overcome a negative situation that presents risks to its clients, or if said measures are not complied with within the given deadlines, the Company may be declared dissolved.

December 19, 2013

Excelent Oceanfront project in Santa Elena, Ecuador…

Today I will post about my recent activity by the beautiful Pacific Ocean of Ecuador, I am working on a great new project, it is an awesome design created by a prestige group of local architects and developed by a well established local company (providing a 100% warranty on your investment).

We are right on the pre-construction sale for the second  tower, and  I am commercializing the project for overseas investors, retirees or anybody local o international with a desire to invest to a great retirement heaven. The hall project is build and finance totally by the developer, and most of the Oceanfront Condos have been sold without advertizing jet.

That shows us that Ecuador it is a country with a lot of potential for development. There is an on going demand in the construction industry that reflects in the rest of the local economy. The price range for the square meter is between $ 1.000 US to $1.500 US putting this project in the high end of the local market.

Here I will show you some images from the project, there is a first tower already in use by the actual owners who are enjoying the full resort style service, the project includes a Beach Club, Marina, and Hotel Administration Services for the Condo Owners, allowing them to gain an excellent return on their investment.

At the present moment, we have our second tower under construction and with most of its unit already sold. It will be finished by Jan. 2014 right on schedule.

Located on the “Ruta del Sol” Santa Elena – Ecuador

One of the best  locations that you could get along the Ecuadorian Coastline, since it has most of the high end local real estate locations providing a plus to your investment. A magnificent beach location, open sea, fresh waters, no pollution from over saturated population and under develop infrastructure as you will find out at mos of the beaches in Salinas, Ecuador or other crowed beach towns. Al top of the line beach amenities, great services, and all in a private gated area, totally secure to live in, and close enough to all the services as supermarket, gas stations, restaurant, bars and others.

Always make sure that if you invest in Ecuador with local developers, also assure yourself that they are a trusted local firm. Use well informed and local real estate professionals who knows the local situation and laws, that way for sure you will secure your investment and get all the work professionally done.

For more details on this beach project visit this site:  http://ecuadorluxury.wordpress.com/

Until next time, hasta luego!

Ecuador Real Estate – facts about buying property in Ecuador and finding out local regulations

Thanks to one of my readers, I came to the attention that in Ecuador there is no such a thing as “Short Sales” on properties. I will try to provide some inside view about Real Estate Sales in Ecuador.

Latin American countries have particular structural features that complicate the regulatory environment of capital markets and affect the effective execution of short sales on real estate properties. For local Ecuadorians to purchase a real estate investment through a lender (Bank or Government Agency) it is easy since the introduction of the US dollar as the official monetary unit for all banking and government transactions.

In theory financing is available in Ecuador, but in practice it is difficult to arrange for foreigners.

The Ecuador constitution guarantees free access to the banking and credit market to locals and foreigners alike. The same as it guarantees the free right to own and hold property.

You can buy real estate once you land in the country using only your passport as identification. This is not just a policy of the current administration that can easily be changed – the Ecuador constitution guarantees the right to buy and hold property for everyone, citizens and foreigners alike. In fact, once you are in the country with a valid visa, the Ecuador Constitution guarantees that you have the same legal rights as Ecuadorian citizens, with the exception that you can not vote.

Additionally, there are no restrictions on owning beachfront property as there is in some other countries. Real Estate problems have mostly been the result of buying property that the seller did not have the right to sell – a proper title search, or buying title insurance, mitigates this risk.

The difficulty that foreigners face on financing is the inexistence of a “credit rating” system in Ecuador. Adding to this, there is a high default rate in their financial system, so it’s hard to qualify for a loan without a local employment history or a co-signer.

A good credit rating in the US does not mean anything here. Interest rates are typically 12% or more, and 30% to 50% down payment is standard.

The great opportunity to take advantage is on Pre-Construction Featured Projects in Ecuador. You could finance your down payment free of charge and cero interest until the project is ready. Also you could sometimes get the sellers to provide future direct financing, but they will typically require at least 50% down payment.

Getting back to the term of “Short Sales”, the definition applied to this term in Latin America it is completely different, “short selling” relates to market shares or stocks.  Latin American capital markets are characterized by the following factors affecting country risk perception from the international investor perspective:

  • Reduced liquidity
  • Limited price formation
  • Unavailability of information
  • Small economic size

All this facts makes it difficult to assess the appropriateness of short sales norms. Let’s say in Ecuador there is no currency market since their official monetary unit is US Dollar, so there is no possibility of short sell that would depend on the existence of a fixed or a floating exchange rate regime.

Therefore, Ecuador does not approved or makes it feasible to short sell in equity markets; there are no regulations on the topic.

This is the best place to invest in cheap property, not to go on market trading…

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If you need help with information related to buying property in Ecuador at real cheap price let me know… Hereyou have a sample of a real cheap property only $ 65.000 US dollars on sale directly by owner, ocean side gated community in Playas Villamil, the best ocean weather in the world.

 

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