Chile Forum

Hi All.....

My wife and I are buying an apartment in Vina. I am British and she is Chilean. Due to the rubbish pound to peso exchange rate we have decided to get a mortgage in my wifes name to cover the majority of the cost and pay it off at a later date when the exchange rate improves. We have found an apartment we like and want to make a starting offer which is considerably lower than the asking price. However, the real estate agent, Fuenzalida, have requested that we leave them two ´white cheques´, one for the amount of 1% which is their fee and the other for 10% of the purchase price which they say is the penalty we must forfit to the apartment owner if we fail to follow through once they accept an offer. Obviously i am reluctant to to pay anybody or leave open cheques at this stage as we simply want to negotiate via the agent with the owner to see if we can get the apartment for a more reasonable price which we can afford and then at that stage we will make a definate offer. Can anybody throw some light on this matter....is this the normal practice in Chile...? Does anyone have advice which might help?

Thanks for reading this!

Mark

Any properties I've bought have been without an agent, buying through a lawyer. In both instances I paid at close of escrow. I can see the agent's interest in getting you committed but I'd like them to earn the commission 1st.

In the hundreds of property deals we have done, we have never ever had a client leave a personal check. If something needs to be placed in escrow, it is done with a vale vista ( certified bank counter check) and it is deposited at a notary with instructions for the release or return. Real estate agents ONLY get paid after the title is registered or at least the final buy / sale contract is signed. Nothing wrong with putting down a deposit, but it must be done under a formal promissory agreement signed at a Notary. If this is for the "penalty" if you do not go through with the purchase (totally common), and they are insisting that you post the check (again at a notary with a bank counter check) as part of the promissory agreement, then they should be putting down their 10% also if they can not transfer the property (more common than you would think). It is very common to have promissory agreements where neither party actually puts down the money, and the penalty becomes more of hypothetical try to collect it in court sort of thing.

Your attorney should be handling this. Get an attorney. Don't try to do this one yourself.

If you are getting a loan from the bank, the bank will conduct a title search to protect themselves. This would be the only situation where we would recommend to a client that they do not need their attorney to do the title search, but you may need your attorney to conduct a title search for other reasons. For example, they may need to do it to draft the buy / sale agreement. They should also be looking very carefully at the condo association.

Sorry, I just had a closer look at your post.

Absolutely, under no circumstances give that real estate agent any money. Find a different agent. There is no reason to pay money, simply to enter negotiations with a seller. Don't give him any checks, don't leave any deposits. In fact, don't do buisness with him.

I would also suspect, as is very common in Chile, if you contact a different agent in the area and ask about that specific apartment they will get in touch with the owner. Many properties in Chile are listed with multiple agents. They also will call around to other agents and share the commission. They will also poach each others properties.

That one smells bad.

you lost me there.....what do you mean...in plain English please...

Conclusion to the original question....if anyone is interested. We found our apartment in Vina. Unfortunately not the ideal one due to the falling pound to peso exchange rate but its in a good position, very rentable for the holiday season and not too old. It was really a very exhausting time, the whole thing from beginning to end took about 6 months but we eventually got there. We now have our foot in the door and own a place in Chile which is great and we are now looking to the next phase of our plan which is a small piece of land somewhere in the south so I can go and play there, build tree houses and endulge in my fly fishing passions. We still live in the U.K but hopefully one day we will take the plunge and live full time in Chile. <VIOLATION OF TOS>

Hi Parryboy,

Do you mind disclosing (1) wheather or not you purchased thru a realtor and (2) how much below/above asking price (percentagewise) you paid for the property?

Thanks inadvance.....................Murf

Hi Murf...

Yes, we found the apartment through a realtor. We spent about two months looking...Vina has well over 100 agents of all shapes and sizes and we looked at over 60 properties. On the basis of the weak economy we started to make really silly offers for places we liked just to test the water and see how low people were prepared to go to....no harm in trying. We found that most of the places we were looking at were either second properties or they were old people who were not in any hurry to sale so our 'silly' offers were mostly refused, I guess they were not part of a chain or were not in any great need of the cash. Finally we found a place just off of Libertad...two beds, two baths, nice condition with furniture and our offer which was more realistic was accepted. It was approx 10% less than the asking price. Hope this is helpful..... are you looking for a place?

Mark

Yea, generally the rule in Chile is no one will go lower than 10% of their asking price. We found this even in situations we where certain the people needed the money. It is almost more a face saving issue than a economic issue. Never the less, we do occasionally run in to the person that float a silly asking price and the property sits on the market for years with very few people even bothering to look at them. In those situations movement is possible. It is often helpful to have an idea of just how long someone has been trying to sell a place.