Expected % cost of expenses of a real estate transaction.

These Spanish-language articles linked to explain the various fees and taxes that will be charged, some with examples.

Buying real estate can be tricky, even in the USA where we all speak the same language and there are many laws designed to inform and protect both parties to a transaction.  Even with the help of professionals, it's still "buyer beware".  Multiply the difficulties by 10x or more in a foreign country where there are few legal protections and where you don't read, write and speak the language.  A professional is a must - and even then you can't be sure you are not being taken advantage of, if you cannot understand Spanish.

This article gives an estimate of around 10% of the purchase price of a property for additional costs:

https://inmobiliariaenbogota.com/cuanto … -colombia/

This page lists the additional fees, based on a property selling for 200 million COP:

https://www.metrocuadrado.com/noticias/ … usada-2807

It's worth noting that the above page gives additional costs of only about 1.16% which seems much too low.  But they invite you to contact them via email, giving their address at the bottom.

This article is specifically talking about buying in Barranquilla but would be roughly applicable elsewhere in Colombia, too.   For an example 200 million COP property it gives a good breakdown of total costs by percent without a mortgage (2.75%) and with a mortgage (4.65%), listing the costs in tables:

https://cibelesinmobiliaria.com/consejo … ranquilla/

Here's a newspaper article breaking down the steps and costs for buyer and seller:

https://www.eltiempo.com/economia/secto … bia-175668

All of the articles give good, useful information as to what documents are needed, taxes and fees which must be paid, and the process overall.  I would not hesitate to reach out and contact people via the addresses given in several of the articles, to pose specific questions as needed - they may not answer but it's worth a try.  If/when you have a specific property in mind, you should work directly with a professional, or several, to pin things down so there are no surprises.

Thank you Osage-archer, I agree with everything you have said , that is why I was looking for someone with first hand knowledge.  Possibly someone who recently purchased a house or apartment in that price range. The internet is full of anecdotal and incomplete information possibly designed to mislead unsuspecting expats . I suspect even the 10% estimate is a wild under estimation of the true total costs one would incure. Just the cost of bring the money from the US through the bank of Colombia could equal the 10% figure just from the exchange cost and fee charged by the bank and their representatives. Most people Ive talked to in Colombia dont see the cost of importing the money as a part of the cost of the real estates transaction. I see this stance as self-serving at best.  That is why I  specifcally asked if all the cost I know about, plus others I may not know about to be included in the estimate.
Maybe we will get lucky and hear from a resent purchaser. We can only hope. Im sure the infomation would be invaluable to prospective expats.
Thank you again for your assistance. Windboater

Hearing from a recent purchaser would be only anecdotal and not necessarily that helpful.

There is no reason that your costs would be the same as someone else's costs, especially since they can vary from city to city, and property to property just as they do in the USA.  Even the cost of importing money can vary, depending on your bank and other factors such as the exchange rate.  There is no set amount that is invariable,  just as in the USA.  Sometimes the seller if sufficiently motivated will pay some of the costs normally paid by the buyer.

I don't think any of the articles are "possibly designed to mislead unsuspecting expats".  If they were they'd probably be in English, not in Spanish, and even then it's a stretch to think that these general articles about the steps, fees, taxes and other costs involved in buying a property are all aimed only at parting a fool and his money - although that can happen, you should read about Las Olas on the Ecuador forum...

The articles I linked to are general examples but about as specific as you're going to get.  Plus several list each cost, each tax, each fee so you can compare, plugging in your numbers in place of the examples they give.  I doubt that a recent purchaser could be (or would even want to be) as specific in every detail as the information the articles contain.

Use alianza valores to bring large sum of money. My cost was $25 wire transfer and if Colombian peso is trading on world markets today at 3790 you will get 3780. Excellent exchange that you will not find with any other. Alianza valores they do speak English . Contact Angela

Im not familiar with them. Are they a bank?

They are investment house. The only place to transfer money without cedula

Thank you. Will check them out.

you don't need to be in Colombia. I just transferred large sum for property buy in Rionegro, la ceja and I am in Florida. I don't have cedula either. You save yourself around 500$ going directly instead of all these so called lawyers . Spread is minimal if 3785 on world markets , they will give 3775 and I negotiated -5 for large sum. A lot of paperwork but talk to Angela in Bogotá . Really sweet lady. She will send you forms to fill out . Not easy but doable. Here is what's up contact +573142995059. Tell her Peter send you.

Are you saying that with no cédula you obtained a personal bank account in Colombia to which you transfer large sum(s), Peter?  Did you set up such bank account while you were in Colombia previously?  Or did you transfer the money to some other type of account?

This Angela you are commending in Bogotá, what company -- name and type of business -- does she work for?

---

Your property buy in "Rionegro, la ceja":  this 'location' is confusing because Rionegro and La Ceja are two different municipalities in Antióquia, about a 50-minute drive from one to another.

cccmedia

Weinmannp wrote:

You save yourself around 500$ going directly instead of all these so called lawyers .

Sure, an Expat can save five hundred bucks on an attorney.  But that doesn't mean the typical Expat can successfully pull off a first-time real estate purchase in South America.

A good attorney can explain the clauses you will be agreeing to .. present solutions to problems that usually arise during the purchase process .. and provide you a way to wire money to the equivalent of an escrow account without having to obtain a personal bank account.

cccmedia

Yes I did. its an investment account like here merrill lynch or schwab.
Well let me explain. I almost got tangled up with so called lawyers to set up investment account that each of them wanted to charge me 400-600$.
Alianza Valores does that for free Which means you are transferring the money as an investor. You put it in account that generates 5%i yearly interest and for whatever purpose you want. I am holding this money with great negotiated spot rate that I received . As soon as I get to Colombia I can withdraw it for purpose of purchasing real estate. Yes , later , I will need an attorney for closing. I will do my research and I will choose the best.

As to where I will buy it , it needs to be investigated. Either Rionegro, la ceja, el retiro. I think Llanogrande is out because of cost .

As to anyone who would like to transfer money to Colombia just please google " investment account Colombia " . Hopefully you will find what you looking for. Alianza Valores facilitates the establishment of an investment account without cedula and you don't have to be in Colombia. Little paperwork that needs to be filled out but doable.

Wow, this is all helpful information from all of you. But a couple of things. I have not spoken to Alianza yet but I would like to talk to them to open up an account. I started using a lawyer in Colombia and she said she basically did not like Alianza and thought that I should go with bancolombia, but she's been trying for 3 Days to get in touch with them to find out if I can open the account in Colombia being here from Florida.

Then I thought that if I drive to Miami I can open an account with davivienda which has a big presence in Colombia. But I don't know if opening an account with davivienda in Miami means that I also have that account in Colombia.

The lawyer that I have been talking to wants to charge me 3% of the purchase price which I've never really heard of before as far as lawyers charging a percent based on the price of the property. 

I am going to text  that Angela in Bogota. By the way the property  I will be purchasing is in Medellin.  What company did you say Angela is with?

Finally, to address another point that you made, I have been advised to be careful of escrow accounts in Colombia, as some of them might not be safe.  I think even if that is not true, I still feel safer having the funds go from my account in the United States to my account in Colombia and then to the seller with no escrow agent in between.

An investment account with 5% annual return is not too bad. So I am hoping I can make that solution work for me. I will tell Angela that Peter sent me..

Thanks.

David

David
Angela is working for Alianza Valores. As to opening an account with Davivienda I have no idea if it's possible. Please let me know if that is possible to have  an account in Colombia. I have a scheduled flight to Medellin on September 5. Hopefully Colombia will open their intl flights.
As to 3% I think it's very high. I did some research and it should not be more than 1 1/2 % total.
I applied for R visa with Colombia because of this transfer of money. I got the visa in 3 days. I spent one day filling paperwork online. It was not easy because of filing should not be more than 5 mgb . But I figured it out. Now my chances of getting on that flight are better . Visa is good for 5 yrs and it was 435$. When you are in Medellin maybe we can meet up for coffee so hit me up. I will be looking for property in Rionegro, la ceja el retiro area . I was in Medellin 2 years ago and I found the weather little too warm for my taste. I prefer little cooler. I lived in Chia for a little while but I had difficulty breathing. I felt like 90 years old man just waking to the second floor. Even climatizing after a month would not help. So I have to look for lower altitude. It's only 400 meters difference but I had no problems with breathing in Medellin. We shall see.
I talked to Angela about real estate activity in Colombia during this Covid and the same scenario plays out like in the USA where people are moving further away from the city and buying properties in rural areas so I think there will be a lot good deals to be found in Medellin.
And look at the peso almost 27% discount on that property and I am sure you can negotiate another 20% with the seller . That is almost 50%!discount. Unbelievable.
Wish you luck and hit me up when in Medellin

Hi Peter,

I touched base with Angela last night.  She is going to email me the paperwork.  That will be great to be able to open the Alianza account remotely.  Then I will not need to pursue Davivienda. 

The 3% did seem high to me.  Sounds like gringo pricing.  I think $2,000 to do the Title Due Diligence, P&S, and closing docs should be the maximum amount, unless POAs are required for anything. 

I am confused as far as the VISA.  It seems that I can do this whole process and close on the sale, and then address the VISA issue, isn't that correct?   And that is only if I wish to get a VISA.  I plan to buy property soon, but not move there until May 2022.  In the meantime, I can just go back and forth to Colombia like I have been ............ with my passport, which allows you to stay for 6 months.  If this is not correct, please let me know. 

I have found an apartment that is new construction off Las Palmas in Medellin.  Not ready for occupancy until early 2021, which I understand can change.    And yes, I do like Medellin.  I have been to Bogota and Cartagena, and I was not crazy about either of those cities.   I love Medellin. 

I do think that I will renogiate with my lawyer.  She thinks that she needs to POA to help me open a bank account, and she wants to take care of all of that for me, but it sounds like I can do all that on my own. 

Yeah, I would love to meet for coffee sometime.  I do plan to go to Colombia as soon as the borders open, so I may be there in September also.  I didn't want to book my JetBlue flight until I know for sure the airports are open. 

Thanks again for sharing all this information.

David

Peter (or anyone),

One other question ............ Do you know if I can legally wire money to the development builder as a deposit to hold the unit that I chose?  I am waiting to hear how much they will need, but I don't imagine it is more than $10,000.   I would like to wire it directly from my Chase account here to the builder. 

David

Weinmannp wrote:

I will be looking for property in Rionegro, la ceja el retiro area . I was in Medellin 2 years ago and I found the weather little too warm for my taste. I prefer little cooler. I lived in Chia for a little while but I had difficulty breathing. I felt like 90 years old man just waking to the second floor. Even climatizing after a month would not help. So I have to look for lower altitude. It's only 400 meters difference but I had no problems with breathing in Medellin.

Dear Peter,

The altitude situation is critical for anyone prone to breathing problems at high elevation.

You say you lived in Chía, which is in Cundinamarca department near Bogotá at 8412 feet elevation.  You wrote that the altitude caused you breathing problems -- "I felt like a 90 year old man" -- and you decided you need to seek a lower elevation.

The cooler suburbs you like outside Medellín are quite elevated.  La Ceja is at 7200 feet (all elevation numbers in this post are from Wikipedia).  Rionegro is at 6972.  Medellín itself is listed at just 4950 feet elevation so it is not surprising you did not have problems breathing there.

Sensitivity to high elevation -- i.e. a breathing problem -- is likely to increase with age.  Living at high altitude with COPD "could adversely affect mortality as disease progresses," according to a report published by the National Institutes of Health. 

This adds up to a case for you to rent in Colombia so you don't get 'stuck' owning a property that is not suitable for your health needs over time.

cccmedia

davepero wrote:

I plan to buy property soon but not move there until May 2022.  In the meantime I plan to go back and forth to Colombia like I have been....
If this is not correct, please let me know.

Nobody knows if your assumption is correct, Dave, because it is unpredictable whether international flights will be operating ongoingly in the covid era. 

Flying back and forth at will between the USA and South America is no longer a given.  Reopening of international travel into Colombia is still planned for September 1st on a limited basis .. but who knows if covid outbreaks could cause interruption periods going forward. 

Planning in 2020 for a Colombia property purchase and a 2022 move-in is a gamble.

---

As to the immigration department's rules that allow you to re-enter Colombia after six months and exit about six months later, those are subject to change if required .. based on conditions in the covid era.

cccmedia

Thank You.  Yes I am aware that all of it depends on what happens with covid and I guess I'm being optimistic that by January 1st international travel will resume but with more social distancing and face mask requirements.

So assuming everything is back to "New Normal" by January 1st, it seems like I can still purchase this property in February 2021 and not do anything about a Visa until I move there in May 2022.  That was mainly my question, if I can buy the property and not apply for any new Visa. Until the time that I move there.

Based on what you have posted, Dave, I don't know of any legal prohibition against a USA citizen purchasing property in Colombia with funds and a passport, no visa.  I made such a move myself years ago buying a condo in Quito, Ecuador.  I wouldn't do it again during covid times in any country in this hemisphere.

See if you can suppress your urge to gamble on a purchase for as long as possible.

cccmedia

Hello everyone sorry but I did not see notifications earlier in my email

Davepro
I would be very careful and leery about a new construction. Especially during this pandemic. You make sure this is reputable company because a lot of things can go wrong with this pandemic. I have read horror stories with people deposits and they never got it back. The builder never found. This could happen anywhere in the world but Colombia, I would really do my research as to new construction.
Yes, you probably can get the visa later but I heard it's better to get it in the country you reside.

Yes my flight with spirit just got cancelled and I rebooked it for sept 11. I got $50 voucher. We shall see but I will keep rebooking until I get on this flight.

I am glad Angela was able to help.


To cccmedia

Thank you for advice as to altitude issues.
I know it's maybe 1000-1500 difference but it might make a difference. I drove through cordilleras mountains but that was only for short while.
We will hop 1 month in Rionegro, 1 month in la ceja, 1 Month in El Retiro and we shall see. My wife is 34 years old and she had the same issues but she is from Barranquilla. Not my cup of tea and neither Cartagena. Hot hot. So we shall see. Maybe we needed more time to climatize but I thought that a month should be enough. We loved Chia near Bógota.
I might even purchase something in Medellin but prefer cooler. There will be huge deals coming up in that city. Pollution is horrible in el Poblado. I just don't understand why anybody would want to live there. Just read an article about Medellin where one oncologist claims that every 3 minutes a person dies in Medellin because of respiratory problems including cancer. I don't want scare anyone but I am just passing info that I have read. This is the link to an article.

https://www.autodesk.com/redshift/susta … al-design/

Wish you all luck and be safe

Sorry that link provided is about new cancer facilities in Bogota. I provide it later as this previous link is under moderator review.

I doubt that you read that every three minutes .. someone dies in Medellín due to respiratory problems.

I looked into this claim and I think I found out why you're having a problem finding
a link to back up such an assertion.

In 2017, a University of Antióquia study showed that pollution (all forms) claimed a life .. once  every three hours.

----

Also, I did the math.  If something caused a death every three minutes in some city,
175,200 people would die there in one year due to that cause.  In a city of MDE's size,
that would mean about one out of every nine people would die in a year from a single cause.

This is not to say that Poblado or Medellín has low pollution. 
The city's respiratory cancer rate is 3.4 times that of Bogotá,
according to my research, and 2.7 times that of Colombia nationwide.

cccmedia

The write-up of the study in question appears at www.colombiareports.com ...
The results earlier appeared in Semana magazine, according to this write-up, apparently
based on a review of death certificates from recent years.  The city-by-city comparison
I cited is also from the Colombia Reports article.

Sorry my bad. Thank you for correcting that and I do have the link for private message since the moderator excluded from my post.
Yes every 3 hours. It was 1 week ago that I have read the article but I did stay in Poblado for 4 months . I have spent evenings with my wife and my child and pollution was unbearable. They should block off that whole section of Parque Lleras so people while eating could breath normally. It's a mess and I found it not appealing to my taste.

Weinmannp wrote:

I did stay in Poblado for 4 months . I have spent evenings with my wife and my child and pollution was unbearable. They should block off that whole section of Parque Lleras so people while eating could breath normally. It's a mess and I found it not appealing to my taste.

In Medellín I have always stayed at hotels along the Golden Mile and not personally been bothered by noticeable pollution.  These hotels are amidst green areas with plentiful trees ..
apparently not subject to the pollution noticed by Expats staying close to Parque Lleras.

Though the rates are higher at various hotels away from Parque Lleras,
the extra cost is probably worth it for those for whom pollution is an issue.

cccmedia

Parque Llleras is about one kilometer or six-tenths of a mile from the places where I have stayed.

Here is the link for the Medellin pollution
https://www.google.com/amp/s/colombiare … tion-study