Is this parcela a fair deal?

Buying, Selling, Building, Tax issues, anything regarding real estate or properties in Chile.
Forum rules
NO DISCUSSION OF SPECIFIC REAL ESTATE AGENTS BY NAME, LINK, OR RECOMMENDATION ANYWHERE ON THE CHILE FORUM.
clicker44
Posts: 2
Joined: Thu Apr 19, 2018 7:46 pm

Is this parcela a fair deal?

Post by clicker44 » Thu Apr 19, 2018 8:08 pm

Hello! Long time lurker and first time poster. Thanks to anyone who can give me some insight into this. I spent the month of February with my wife in Chile. We looked at quite a bit of land for sale!

We found a trustworthy individual that owns a few parcels of land in the Buchupureo, Cobquecura, Bío Bío Region.

One parcel in particular interests us. It is 1.96 hectares and is on a bluff overlooking the ocean (but set back about a mile from the water). The land has about 1 acre of flat area for building and then slopes down into a flat valley that is about 3 acres. There is a fresh water spring on the land and a road already built that leads to the parcel.

The land is for sale by owner and the price is $48mn pesos. There are no structures on the land, no utilities, etc. Just raw land with a road leading to it. The owner says the land has been in his family for generations (they own all the plots around it) and that the freshwater is good water. We checked it out and it does indeed look/smell/taste like drinkable water. The land is about 2km off of the main road so access is very easy.

I know that I have not provided much info, but before I spend time and money doing my due diligence I just wanted to know if someone here could provide insight into that price point being a fair deal.

Thank you!

mem
Rank: Chile Forum Citizen
Posts: 217
Joined: Tue Nov 24, 2015 11:18 am

Re: Is this parcela a fair deal?

Post by mem » Thu Apr 19, 2018 8:20 pm

I suppose the ocean view is considered positive by the seller. The low elevation and proximity to the coast (particularly in the Bio Bio flood plane region) is a showstopper for me

Still with no utilities and the geography, I think the price is a little too much. If you could get it for something in the 20'sh to 30'sh million CLP it could be a good deal

The other huge issue is the water rights. That price better include water rights to the water table and the spring...otherwise you gotta look at the cost of the water rights which could torpedo the value

41southchile
Rank: Chile Forum Citizen
Posts: 247
Joined: Mon Jun 12, 2017 2:39 pm
Location: Lakes Region

Re: Is this parcela a fair deal?

Post by 41southchile » Thu Apr 19, 2018 8:45 pm

How long is a piece of string? within ballpark I would say without knowing anything about the area or lie of the land. I guess it depends on how much you want to pay for what it is, you've seen it not us. How far is it to connect to power ? The water rights should not cost you a great percentage of overall purchase price, it's just a matter of wether you can get them or not, or really need them in your situation. What about mobile phone coverage does it get at least one well enough for internet ?
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

dmwbmw2
Rank: Chile Forum Citizen
Posts: 422
Joined: Tue Jun 01, 2010 8:43 pm

Re: Is this parcela a fair deal?

Post by dmwbmw2 » Thu Apr 19, 2018 8:49 pm

Agree completely about the price and the water rights but a little puzzled about the other comments.

On a bluff a mile back from the water seems to me to be a little opposite to the comment about low elevation and proximity to the coast.

And ocean views are generally considered a positive by buyers and sellers alike.

User avatar
admin
Site Admin
Posts: 16224
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Is this parcela a fair deal?

Post by admin » Fri Apr 20, 2018 6:16 am

Google the area to check properties for sale on the internet. Not an official apraisal, but should at least give you some context.

Right now, in most of that part of chile, pourto montt to santiago, 48 million for nearly two hectors is not a crazy price. Yea there is cheaper land i am sure, but in general that is not red flag price unless there is something really wrong with it.

Of course, a lot more information would help narrow down just how apropriate that price is.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 16224
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Is this parcela a fair deal?

Post by admin » Fri Apr 20, 2018 7:01 am

Let me put it another way.

I like watching property auctions.

Typically you get vague descrpitions, along with some generic photos of grass and trees to start with. More info takes some research, and often some money to pull titles and such.

If i seen a property in those areas listed as you describe this one, say with a minimal bid of 15 or 20 million, i probably would not bother doing any further research and not register to bid on it, because i know they typically sell at around 40 to 50 million, sometimes a lot more. Thus, being an auction, i would not consider it a deal. So for a straight market purchase, probably not a bad price, assuming no suprises with the particular property.

Something to keep in mind, like most property prices in the world, proximity to urban areas and pop growth drives the price. Most Chileans dont like dirt roads, even near towns. They think they are going to break a leg and never be found. There is rural, and there is what chileans consider rural.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

clicker44
Posts: 2
Joined: Thu Apr 19, 2018 7:46 pm

Re: Is this parcela a fair deal?

Post by clicker44 » Fri Apr 20, 2018 1:59 pm

Thank you everybody that responded! I am going to gather some more information and post the details.

User avatar
nwdiver
Rank: Chile Forum Citizen
Posts: 2870
Joined: Tue Mar 17, 2009 8:45 pm
Location: Vancouver, BC and Chile where ever it's Summer
Contact:

Re: Is this parcela a fair deal?

Post by nwdiver » Fri Apr 20, 2018 3:04 pm

It very expensive, half would be more than I would pay........some people don't know the glory days are over, just bought 10ha at 1/3 asking price.........
It's all about the wine.

picalena
Rank: Chile Forum Citizen
Posts: 421
Joined: Tue Jan 10, 2012 11:59 pm
Location: la novena

Re: Is this parcela a fair deal?

Post by picalena » Sat Apr 21, 2018 11:50 am

No insight on the price, but another question that popped straight into my mind from your description is the notion of access. Is the dirt road a public road or is it a road the family built to access their various parcelas. In other words, are you going to be dependent on whether they want to keep giving you access and/or are they going to be traveling across your property to get to their properties. Something important to consider and often treated very differently in Chile than where you might be from. And does their waste disposal system traverse across your land as well. Gross, but it happens. Do they have to drive their livestock across your land for any reason, etc.

cheers,
pl
A woodsman was once asked, “What would you do if you had just five minutes to chop down a tree?” He answered, “I would spend the first two and a half minutes sharpening my axe.” - Dubious source on the internet

User avatar
admin
Site Admin
Posts: 16224
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Is this parcela a fair deal?

Post by admin » Sat Apr 21, 2018 8:42 pm

nwdiver wrote:
Fri Apr 20, 2018 3:04 pm
It very expensive, half would be more than I would pay........some people don't know the glory days are over, just bought 10ha at 1/3 asking price.........
Yea, i know but i was factoring that he is doing remote shopping as a foreigner. If your wondering around chile for years, there are way way better deals to be found. But it takes lots of time and talking.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 16224
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Is this parcela a fair deal?

Post by admin » Sat Apr 21, 2018 8:49 pm

Doing what we do, we come across a lot of opertunities and just people offering us deals.

Basically i dont buy any land in chile unless it is 50% of market price (which is typically under market asking price by 10 to 20%), and then only with a long term investment plan for it that will more than pay for it in 10 years or less.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

41southchile
Rank: Chile Forum Citizen
Posts: 247
Joined: Mon Jun 12, 2017 2:39 pm
Location: Lakes Region

Re: Is this parcela a fair deal?

Post by 41southchile » Sat Apr 21, 2018 10:23 pm

nwdiver wrote:
Fri Apr 20, 2018 3:04 pm
It very expensive, half would be more than I would pay........some people don't know the glory days are over, just bought 10ha at 1/3 asking price.........
What glory days would they be just as a matter of interest?. Sometimes getting land or property for a third asking price is not that an exceptional occurance in Chile, just depends how motivated the seller is, maybe there was a divorce, maybe he had debts, or he just tried the typical Chilean style of throw out a price and in 5 years the market will catch up and the price will be about right for a while and had other plns instead. Im not sure but would probably need a little bit more data or information rather than one sale to say there is somesort of slowdown or fall in prices happening in the real estate market (that is what you mean is it?). Maybe there is? for some sorts of property, maybe as prices are getting way out there for land that most sane people wouldnt touch with a 50 foot pole, people are starting to realise some of those crappy parcelas, 20kms down a dirt road, with no water source and 2 kms from a power line is not actually worth 20 million pesos or whatever figure they decided to throw on it. For good properties in well sought-after loctions with good connections and population bases nearby, cant really see any reason why land would be getting cheaper, in fact the opposite I would say, in some ways they are still under valued on a global scale, and with things like NZ about to ban foreigners buying there, guess where international buyers are looking now? Tio Sebastian is throwing open the doors to those with money to bring to Chile, MB sorted out the cheap labour supply with the Haitians for companies and land owners, (check out Hortifuit and their growth over the last few years, would that have been possible without all the new labour ?) so now SP and his crew is off selling Chile to the world to bring their money here, and whats a more physical asset than land. Money is what moves the world.
In the Lakes Region Chile for 6 years. It looks like New Zealand in some ways, and is nearly at the bottom of the world too, but there the similarities end.

Post Reply