Closing Costs When Buying Ecuador Real Estate

Purchasing an Ecuador real estate property is really very easy. But you may find it to be a bit different from what you are used to in the US or in Canada - or wherever your home country is.

Buying Ecuador Real Estate should be carefully researched - even in a country like Ecuador, where it comes really cheap. You need to find out just how much you are expected to spend on Ecuador Real Estate. Most importantly, you want to have a list of the closing costs that you need to pay. There may be expenses that you can let go and others that you can negotiate.

Try not to concentrate too much on the purchase price alone. The thing about buying an Ecuador real estate is that mortgages are not the norm. It is oftentimes better to pay for the home in cash. That being said, you know that you need to come up with both the home price and the closing cost and be ready to pay for it to close the sale.

This is more reason for you to ensure that you will only be paying what you need to pay for - no more and no less. You should understand the list of expenses that you are expected to pay for in the closing costs of Ecuador Real Estate.

How much does it really cost to buy a property in Ecuador

A property in Ecuador will cost you between $50,000 to $150,000. On top of that amount, you need to come up with the closing costs that will help process and seal the deal. While every transaction is different, here are the typical details of closing costs for a home worth $200,000.

• Title Search: $200. This is to pay for the service fee and other incidental costs to acquire the documents that will prove that the seller of the home is legally allowed to sell the Ecuador real estate. Usually, it is the lawyer who will hire the person who will do this search.
• Lawyer’s fee to write a Purchase Agreement: $250. This is a document to help take the sale transaction to the next level. The price is a standard amount but it will still depend on the lawyer or firm.
• Lawyer’s fee to write a Minuta Draft: $150. This is the document that the Notario will use to create the Property Deed. The price for this will also depend on the lawyer or firm.
• Notary fee for Purchase Agreement: $50
• Notary fee for Property Deed: $500
• 1% Tax (or Alcabala): $2,000 (for a $100,000 property, that will be $1,000)
• Registrar fee for Property Registration: $1,050. This is for the transaction to be placed in the public records and to declare that you are the new owner of the Ecuador real estate property.
• 3% of Purchase price for Real Estate Agent Commission: $6,000. This is the price you pay if you hire a buyer’s representative. You need to know that it is a common practice for sellers to shoulder the commission of the agent. That is because these agents really working in behalf of the seller and rarely to the best interest of the buyer. But if the agreement is for the buyer to shoulder this commission, then you need to learn how to negotiate it. Make sure that the purchase price is lower than initially offered. In some cases, it might benefit you more to hire a buyer’s representative. At least, you know that they will work with your best interests in mind. This is also why buyers are typically encouraged to hire a lawyer. Just to they can help with the paperwork too.

The prices in each of these will vary depending on the value of the property that you wish to purchase.

If you notice, there are not mortgage related fees. That is because, as mentioned, cash transactions are common when buying an Ecuador real estate property. Not only that, a title insurance is typically not a common practice in Ecuador. But you can inquire about it if you wish. That will increase your closing costs, of course.

An escrow fee is also not included because this is also not a common practice in the country. There is only one escrow service in the country and having only one company can lead them to raise their prices without anyone complaining.

In the end, you can assume that the closing cost will be around 5%-6% of the Ecuador real estate sale price. If you go without the Buyer’s Representative, then your costs will be a lot lower. It will be tougher, but cheaper.