Chile Forum

why thank you vicki.

Is important to consider the target market, Charles examples are good points if you have gringos as your target market, however for Chilean customers the way to value is completely different and often the opposite. Both groups have very diverse way to value on the same things, so is important keep on mind that something valued for gringos is often worthless for Chileans

tom is right. Foreigners just go nuts for remote wild hard to get places and hard to live in places like the mountains of Patagonia, but try selling that to a Chilean from Santiago. They think all the gringos are crazy for wanting to live in Patagonia. Even the old farmer that is selling you his land is likly going to move north to somewhere like Puerto Montt to retire. He and his wife want easy access to the mall. So, in a sense it all kind of works out. Foreigners and Chileans don't have to compete for the same land, and I think on some level it also keeps problems in Chile from developing such as you see in other countries where the national population is complaining about all the foreigners steeling their land. Chances are if a foreigner wants it, a Chilean does not. Chileans after what they have been through tend to also have a strong pride in property rights. At least for now, there is lots of land to go around and it will be many years before Chile's population gets so big that overcrowding becomes any sort of serious issue, if ever.

Actually, I'd be paying in Krugerrands. I'm surprised that more people there aren't into gold as a way of hedging inflation. I see inflation in the next few years as the trend everywhere. Forget paper money, gold has stood the test of time for being REAL money for the last 6000 years or so. After paper runs it 's course of inflation, there is deflation. In either event, gold will hold onto it's value than just about anything else. When there is economic devastation, what carries more weight than a handful of gold coins?

I read somewhere that old man Hilton got his start as a bell hop in Germany before WWI. At the time, the economy was hot and he made lots of tips. One day he got a one ounce gold coin as a tip. He never spent it and held onto it. During the hyperinflation period of Germany, paper money was worthless. The hotel owner was fleeing the country with anything he could carry. Hilton had the gold coin, and everything else being worthless, the owner traded the hotel for the gold coin. That's how the Hilton fortune was born.

I also remember reading anecdotes about how fortunes were also started after WWII by those who had gold coins literally buying city blocks when all other money was worthless. That's why I prefer to keep my money in gold, especially in krug's. Whatever else happens, it's not paper--it's gold. I may be overstating what could happen economically, but given all the things going on in the world. It's what I trust more than paper or plastic money.

Please keep us (at least me) informed if you do this type of payment for land in Chile as you are not the only gold bug on this board (do a search).

Problem I see is recognizability, I doubt that any person in el campo would even understand a Krug. Maybe an highly educated, well traveled person of the upper class who is old enough to know what hyperinflation really is but the the great majority of the natives here just wouldn't understand. Maybe TomBrad can add something here or point out any error in my perception.

Also, the only gold coins I've see for trade in Chile are the Chilean semi-numismatic gold 100 peso coin. Find one of the currency exchange houses in Santiago that buy and sell them to check them out.

There was 1 guy on the ChileGringos list a while back who I remember claimed he was able to sell foreign gold bullion coins in Chile. Will need to search the archives there.

—eeuunikkeiexpat

I was helping a friend trying to sell some golden eagles coins here in Arica and it was impossible, just a few indian businessmen was interested and, knowing that they was the only in position to buy offered prices ridiculous low. I guess that in any other place out of Santiago-Valparaiso area may be similar problem, there are no people buying gold and they don't have the knowledge to essay or determine whether the coins are good or fake.

Same as with many other things all wich works in USA you must multiply by negative one in order to work with Chile. It is exactly opposed

I am planning to go (if I dare) in 1-2 more month to Madre de Dios Area, in Peruvian Amazonia where is located one of the last native gold mines placement in the world. Some guys there asked me for heavy machinery, is a very dangerous place, even for latinos, but I am quite exited with the idea to see the far west in Amazonia by myself. If all happen as planned I may come with some few nuggets if "estoy vivo para contarlo"
http://esmiperu.blogspot.com/2006/12/hu ... -dios.html

spamghod wrote:. . . . I read somewhere that old man Hilton got his start as a bell hop in Germany before WWI. At the time, the economy was hot and he made lots of tips. One day he got a one ounce gold coin as a tip. He never spent it . . . . That's how the Hilton fortune was born.

This is apocryphal, at best. Conrad Hilton founded the chain; his father was an immigrant and, although of German descent, was born in Norway.

I also remember reading anecdotes about how fortunes were also started after WWII by those who had gold coins literally buying city blocks when all other money was worthless. . . .

Likely, pleasant fictions as well. Gold does tend to hold value better than any single other thing; but gigantic purchases such as these wouldn't have been for spectacularly little. Gold's worth is more in keeping a constant value in compact, easily hidden or transported form. And I say all this as one who favors gold and silver.

spamghod wrote:Actually, I'd be paying in Krugerrands. I'm surprised that more people there aren't into gold as a way of hedging inflation. I see inflation in the next few years as the trend everywhere. Forget paper money, gold has stood the test of time for being REAL money for the last 6000 years or so. After paper runs it 's course of inflation, there is deflation. In either event, gold will hold onto it's value than just about anything else. When there is economic devastation, what carries more weight than a handful of gold coins?

I read somewhere that old man Hilton got his start as a bell hop in Germany before WWI. At the time, the economy was hot and he made lots of tips. One day he got a one ounce gold coin as a tip. He never spent it and held onto it. During the hyperinflation period of Germany, paper money was worthless. The hotel owner was fleeing the country with anything he could carry. Hilton had the gold coin, and everything else being worthless, the owner traded the hotel for the gold coin. That's how the Hilton fortune was born.

I also remember reading anecdotes about how fortunes were also started after WWII by those who had gold coins literally buying city blocks when all other money was worthless. That's why I prefer to keep my money in gold, especially in krug's. Whatever else happens, it's not paper--it's gold. I may be overstating what could happen economically, but given all the things going on in the world. It's what I trust more than paper or plastic money.

Is this an infomercial on gold, or what?

admin wrote: My best example right now would be upper Los Condes on the mountain side overlooking Santiago. The most expensive houses in Chile are being built there, by the richest Chileans. For a Gringos it is untouchable. It is in the smog belt where all the pollution of Santiago floats to in the afternoon and can not rise to go over the mountainside. Buying there is guaranteed death sentence in 10 years for you and your family from all sorts of health problem, yet that is the most valuable property in Chile right now.

Although I would agree that air quality anywhere in Greater Santiago leaves much to be desired, what are you comparing Las Condes to? Which comuna in the city has better air than Las Condes/Lo Barnechea? And there ARE lots of gringos living there...

1. First and Foremost get a trustworthy lawyer, this is not as easy as it sounds. Go by recommendation.
The first property I bought in Chile I got two lawyers!. Maybe you think I am paranoid, but odd things do happen here.

2.Sometimes the lawyer representing YOU will make a deal with the vendor to drive the price up, for a cut of course. Don't bother with agents theyr'e a bunch of leeches. All they are interested in is their commision., not your welfare.

3. Make sure the lawyer rounds up all the property inheritors. If you only can find 12 out of 13 inheritors you may have paid all the money but the property is not yours. They have to physically present at the sale, unless there is a properly drawn-up poder Something for the lawyer to check. Otherwise BIG problem.

4. Absolutely reject any penalty clause the vendors may propose to you if you do cannot produce the money in time.

5.You have to ensure that your property is title is sound, not only with the local financial institutions, but also with the government. If its expropriable they can compulsorily buy for peanuts.

6.If you are buying outright, arrange the sale so that the money stays in escrow in the Notaria Publica until you physically take possesion of the property, tnen formally declare in the Notary that you have received the property conforme. Make sure there is nobody still living there and that all the light fittings and fixtures are still there. At this stage you have the upper hand, so make use of it. Change the locks.

7. Ask about water rights and also easments. Nowadays water rights are sold separately from the property sometimes.

8 If you are paying with a lump sum plus installments over months, for example by monthly check, ensure the owner cannot withdraw all the checks at once, this started to happen to me, until we put a block on the checks, lifting it just before they become due. Nearly broke me and put me in DICOM, not good.

9 Also, if the local property taxes have not been paid for three years, the Government can put the property up for aucton. This is usually the spur for the inherors to agree to a sale, so get your lawyer to check this out. Very good bargaining counter.

10. Finallly, look around, spend at least a couple of months to get the ambiance. If a deal seems too good to be true it probably is.
Regard all the prevous info as an education, don't be judgemental. Its just the way things are. Lots of Chileans get burned as well

My 100 pesos worth fwiw.....

5.You have to ensure that your property is title is sound, not only with the local financial institutions, but also with the government. If its expropriable they can compulsorily buy for peanuts..

For the most part I would say you are right. A few things though that are simply not true. Almost all the things you mentioned should be included and covered in a full title search. I think a lot of them stem from not having a full title search done.

Things like compensation for fair market value for expropriation of private land are constitutionally guaranteed. The government must give you fair market value. Now what "fair market value" is can be haggled over in court if you don't like what they offer, but there are clear procedures for determining that. Most of the time the government will fork over the money off the bat just to speed things up, and also stay clear of generating bad local political vibes. If your attorney is doing a complete title search, it should come with a certificate from both the municipal government and the federal government certifying there are no plans for expropriation currently pending. Same with mortgages, leans, loans, the property seller is not crazy or demented (seriously there is a certificate for this), and whatever else might prohibit the sale of the property. They are all public records and registered.

Water rights are sold separate from properties, and function just like buying a property. If you buy the water rights with your property, they are registered in a separate registry for you that allow you to sell them off to someone else, and still keep your land. Say you have a agricultural property with great water rights, and all you want to do is build a house and look at the mountains. The water rights can be sold to the guy next door to water his farm, and you can keep the mountains. There are parts of the country where this is really not an issue, and others where people start shooting at each other over it. This is one that should be looked at carefully.

Regardless, a complete title search should come with all the certificates stating the current status of the property. A lot of the registered prohibitions will stop cold the transfer of the property until they are cleared, and that is why you use the notary safe like an escrow account. Deposit a valle vista (certified bank counter check) at the Notary with instructions for its release when the title is registered. For the most part, you do not get to however hold the payment hostage forever. The seller has the right to go to the registry, ask for a copy of the registration, and then request the notary release it unless there are some sort of special conditions you have attached to the purchase. It is just fair, and would otherwise defeat the purpose of an escrow process.

4. Absolutely reject any penalty clause the vendors may propose to you if you do cannot produce the money in time.

There is nothing wrong with penalty clauses done right, if you want to close a deal using something like a promissory agreement. They are standard practice, and they are useful negotiation tool. Yes, ideally you would not have any should you back out, but if you want to get business done and reassure a seller for example your not going to waist their time and money making empty promises, they can be very useful.

There are lots and lots of foreigners running around Chile making empty promises to sellers, that simply do not have the money. This was a big problem last year for us, as the country was flooded with paper rich Americans that set up property deals, went home to sell or get a loan on their house, and then found out they could not. Since then, we have noticed a strong increase in the number of sellers demanding some sort of security to enter a contract. They all heard about the mortgage mess, and realized that gringos are not made of money. We even had one seller when an American was making a serious offer on his house just shut down the negotiation the moment the American client said they where going to sell their house in the States to get the money. The seller just shut down the negotiation right there. He simply would not get in to it. Turned out it was the right call for him, because the value of their home and their line of credit in the States evaporate two weeks later. Chileans have gotten wise to this problem, so don't be upset if they demand a little security. The real estate industry in the States might still be in tack if they had done the same.

For example, say you want an option on property you can not afford but you just need some time to raise the full price. Say, you need like another 6 months or a year. Your asking a seller to take that property off the market, spend time and money helping you with the arrangements, and so on and so forth. The seller has to either be one hell of nice person, ignorant, desperate, or in some other state to bite on that. Reassuring them that say they get to keep your 5% down payment if you don't go through with the full purchase buys you a lot of leverage. Often it can be negotiated around, but there is nothing sinister intrinsically about a seller demanding appropriate penalties in the contract.

More on what you should get from a complete title search are in this article, I think most of this is in the Chile Wiki already:

http://www.allsouthernchile.com/southam ... earch.html

and this for the more general steps involved in just buying a property (needs to be updated):
http://www.allsouthernchile.com/southam ... ssues.html

Apart from legal checking, that fraggle092 and Charles explained and are less complicated as appear at first sight, there are a lot of hidden issues that usually can be know with a local, first hand knowledge, because is impossible to forecast for someone coming from abroad.

Noisy or conflictive neighbors, delinquency, future undesirable development, problems during rainy season, noisy or contamination from nearby industries, problems with garbage collection, rats, bugs, noisy pets or wild kids in the neighborhood, specific robbery (in Quillota the avocado theft is a nightmare for everyone), etc etc etc, there are zillion of small details that only people who has lived in the place or have contact with people living there can anticipate. For we Chileans, who live here is more easy, specially if we have a wide network of friends and contacts, but for gringos may turn into a Russian roulette. Purchasing a property is a long term decision and a mistake may last forever.

That is why is good to ask locals first, and that is the value of local services as Charles´s because it may save lot of money and prevent of painful mistakes

We tell all of our clients, get out and talk to people. Start with finding and making friends in the community, and then work your way towards a property. The local gossip is priceless source of information, and can often tip you off to possible problems. We use it when we do title searches. We literally talk up the neighbors, the registry, the notary, the secretaries, the horses or anyone else that might know something. We often turn up all kinds of useful information such as rumors of property line disputes or a 16th undeclared long lost son with a claim to the property. Even better, we often turn up the best prices on property that way. Once you have your property, those contacts and friendships go a long way to solving problems after words.

Friends give friends deals on property in Chile; strangers get burned, just like everywhere in the World. Good thing is that Chileans are fairly easy to make friends with and fast.

Start looking for people, not property. Local people know where the property is at. They own it. So, start with them.

This kind off topic, but not much. A word about teenagers is in order. DON'T LISTEN TO KIDS!!!!

My word of caution is to be careful getting too top heavy with advice from only one person or source, in particular English speaking teenagers. That charming young teenager that speaks fluent English with a heart of gold, can end up being a serious cause of some very serious problems later.

It would seem kind of obvious, but you have no idea how many of the biggest messes clients have ever brought to us where because they where literally listening to a kid to help them buy property or make some other big investment. Clients that would never in their home country listen to a teenager for real estate advise or other topics, seem to just get sucked in to the first person that speaks English. Often they are very young, and very inexperienced.

I know, I know. You all think I am crazy. It is just you would not believe how many times we have seen it. We have literally seen in like just the last year or two hundreds of thousands of dollars in property or cash involved in huge legal messes, and it turns out there was some teenage kid as the translator at the center of it all.

I am not even talking about the kids so much steeling (although that has kind of happened), but they are teenagers. Like all teenagers they want to be liked and will tell you what ever you want to hear. In the middle of a property deal, you often need to hear some bad news to make good decisions.

Yes, and may I add that believe blindly on anyone is a nonsense, the owner of the money is always the final responsible and must not delegate "by confidence" any important decision, I guess to listen is OK, even the fool of the hill may have a valuable information, but choice and determine what to do is responsibility of the investor only. Some people commit the mistake to delegate to others the important decisions and then claim bitterly to be "deluted", investments are always risky and third persons can only inform, never decide.

We repeat to our clients constantly. We will feed you all the information we can (why this forum is here), but at the end of the day you have to make the decision.

It is rather strange however how people will come to foreign country, and forget the basic rules of reason so fast. I mean not dumb or ignorant people either. Well educated, worldly, experience people, that just throw the common sense out the door because they are in a foreign country. I understand it can be disorientating and all. Number one rule, take your time.