Step #1. Get A Reliable And Trusted Attorney
Your most important ally when buying, selling, or renting real estate overseas is your attorney.
First thing, therefore, when beginning to formulate a plan for living or investing in a new country, before you do anything else, find a local attorney you can trust who speaks real English, who has experience working with foreigners…
And, who, perhaps most important of all, works for you… not for the seller, not for the property developer you’re considering buying from, but for you.
Sharing doesn’t count. If you’re sharing an attorney with the developer, whose interests come first in his mind when an issue arises?
“Do you mean I need an attorney even to review a rental contract?” asked an attendee at a recent conference.
Yes, I mean you should engage an attorney even to review a rental contract.
Step #2: Don’t Take Anything For Granted
In any emerging, unregulated market (like Panama, Colombia, Nicaragua, Belize, Ecuador, etc.), you can’t take anything for granted. You must assume that nothing will be as you expect or as you’re accustomed to back home. Not even a simple rental contract. For, in unregulated markets like these, nothing is standard.
Furthermore, in some countries, any legal document, to be legal, must be in the local language (Spanish, for example), meaning that, unless you read Spanish at a high level, you aren’t going to be able to identify any surprises on your own.
Don’t take for granted that the guy offering to sell you the piece of real estate actually owns that piece of real estate…
Nor that the guy offering to rent you “his” apartment has the right to do so…
Don’t assume that the access to a piece of property across a neighbor’s field in fact conveys with the sale…
Nor that the boundaries stand where the seller or even the real estate agent has indicated…
In any unregulated, emerging market, don’t allow yourself to believe that the real estate agent you’re working with actually works for you. He doesn’t. Not really.
And he doesn’t really work for the seller either. He works for the commission, which he wants to be as big as possible.
Step #3: Avoid Surprises
Remember, too, that there’s no Multiple Listing Service in much of the world. This is one of the biggest surprises for North Americans, who are accustomed to walking into a real estate agent’s office, detailing the specs for what they seek (two bedrooms, two-and-a-half baths, US$200,000, in a nice school district, for example), then sitting back to watch as the agent types those details into his system to generate a series of listing sheets for every property currently available to suit.
How do you navigate a non-MLS market? To get any real idea what’s available for sale in any particular city or area, you’ve got to meet with as many real estate agents operating in that area as possible. Agents in these markets don’t share listings, but they share commissions. Property listings are proprietary.
That is not to say, however, that a property for sale might not be listed with more than one agent at the same time. But this is not because the agents are sharing listings. It’s because the seller has listed the property separately, with more than one agent, sometimes at differing prices.
How’s the poor, unsuspecting buyer to prevail?
I say again, engage your own independent legal counsel.
And don’t leave your common sense at the border. Do more due diligence before making a real estate purchase in a foreign country than you would back home… not less.