snobrd4life wrote: ↑
Wed May 20, 2020 10:30 am
May 20, 2020 update...
Add the regular summer vacations and pandemic to the mix... our buyer's new bank has dragged their feet at every step of the way. The quarantines have been excuses for the banks to not move any processes along. Bank executives, processors and lawyers (not Spencer Global, they've been wonderful to work with) have excused themselves from accountability of any kind. Supposedly there is no "home office" structure even though the buyer's bank is a well known Canadian multinational.
I won't bore you with too many details, but answers and progress to any step in the process seem to take 3-4 weeks even with legal support. Feedback has been that employees are dragging out the process as much as possible to avoid making any judgments or decisions without superiors nearby to pat them on the back.
I can only imagine what is going on with the rest of the economy that depends on the banks as a part of doing business in Chile. You could say they are covering their asses which is how they have come to be the idols of Latin America banking, but at the same time I would say how much opportunity are they really leaving on the table by essentially doing nothing at all?
Supposedly we might be able to sign the closing papers next week if all goes according to plan, but seriously never thought this whole process would take 7+ months...
I meant to post this about a month ago, but have been a bit busy to make time for the forum. Here goes...
Sept 10, 2020 update
We finished today after almost a year. I'll outline how things progressed from my last update.
June 2 - buyer's bank finally sends papers to notary
June 3 - our POA signs papers
July 1 - deed submitted to Conservador de Bienes Raices
July 8 - deed registered in Conservador de Bienes Raices
July 24 - buyer's bank generates the vale vista order and will need 5 days until they can be cashed
Aug 31 - vale vista finally released to POA. Bank had to do "diligence"
Sep 10 - funds were wired from POA to our bank account. POA's bank needed to do their own diligence.
Basic summary, we sold our Chilean property via POA to avoid having to make the trip due to estallido (and later covid). Going in I knew very well that there would be issues due to no longer being a Chilean resident with valid carnet so we got legal help. All in, the whole transaction took us about a year from start to finish. Cost a little more than I would have liked to get it all done, but was less than having to fly our family of four to Chile to sign papers multiple times. Plenty of gripes along the way, but we always felt reassured having Spencer Global on our side. Big thanks to them!
Words of wisdom (nothing extraordinary, just my experience in case anybody else is considering selling)
-Real estate is an illiquid investment.
Ours made great returns (not in liquid rental income, but in appreciation) before we decided to sell. Fortunately ours continued making returns for nearly a year between signing the offer papers with our buyer/tenant. We wouldn't have sold unless we thought the capital could be put to better use.
-Fx rate doesn't matter until the day the wired funds clear your bank account.
During the course of our transaction, the USD to CLP swung by about 150 pesos (710 to 861). Fortunately we converted CLP to USD at about 60 pesos higher than the fx rate when we decided to sell. By no means did I ever feel like we would have been underwater on our investment even if we would have had to convert at 850, but what an emotional ride. I used to check the rate every morning to see how it would affect estimated liquid capital to be able apply to our next investment. It's a relief to not have that uncertainty anymore. I recommend planning for various fx rates and then plan for a few extra worst case scenarios. If you are at all not comfortable, maybe you should just continue to hold the real estate.
-Chile is neither Venezuela or Argentina
I now live in South Florida and the horror stories that I hear from various latino work colleagues and neighbors. They are dealing with our have had to deal with real red tape and gut-wrenching decisions regarding real estate. I never regret having bought in Chile and hope to do so again in the future.
Edit: here is the link to the first post in my story: viewtopic.php?f=19&t=14666&start=456#p198536