My First Real Estate Purchase in Argentina
Ok, I researched the real estate buying process for a few years. I built up relationships. I understood the laws and I looked at about 50 apartments before I bought my first apartment. I told myself that I wouldn't get cheated or conned. After walking into a loft apartment, I knew I would purchase it. I was accompanied by my realtor, the seller's realtor and the owner was also there that morning. It barely had any furniture in it. The owner was a young bachelor in his mid-30's. He was very friendly and he spoke perfect English. We started talking and it seemed he was also an entrepreneur. He also quit his corporate life to start his own company. I looked at the apartment and we happened to exchange business cards.
I saw a few more apartments that day but I knew I would be making an offer on the loft apartment that I saw. Still, I asked to see the apartment at the end of the afternoon the following day to see how much natural sunlight it got. This is something that is important. If you are seriously interested in purchasing an apartment. Go see it at various times of the day so you can gauge the level of natural sunlight.
A few days later I had my realtor make an offer on the apartment. They were asking close to $100,000 including a garage. They offered the option of not buying the garage for around $94,000. Garages in a good part of Recoleta sold for about $7,000 - $10,000. I wasn't buying this to live in. I was buying it as an investment for a luxury apartment rental so I didn't need the garage. I made an offer for $90,000 which I deemed to be a fair price. I was there in the realtor's office after I signed the offer and they faxed it to the seller's realtor. I gave them 5 days to think about it.
Imagine my surprise 2 days later when the seller's realtor informed me that the seller rejected my offer. I was a bit surprised since the seller seemed very motivated when I talked to him in his apartment. He mentioned he was starting a "start up" Internet company and needed the money to fund it. His realtor said my offer was too low. This puzzled me. Luckily I had the business card of the owner because we had exchanged business cards. I emailed him telling him it was a pity that he didn't want to sell his apartment for that price as I thought it was fair. He shot me back an email almost immediately telling me that his realtor told him that my offer was for $84,000 instead of $90,000. We were both furious. His realtor had lied to him. My realtor did things properly and never was unethical.
I set up a meeting with the owner where we planned what we were going to do. Keep in mind his realtor was not some rinky dink small operation. His realtor was one of the largest realtors in town that had been around for many years. If this is how the largest realtors operated I wondered to myself how the very small no name realtors operated. It was clear to me to see that no matter how careful you are, you can still get cheated even if you're careful.
I met with the owner and he asked for my suggestion. I told him that he should tell his realtor that he wasn't going to pay them a penny. I told him that in the USA or UK a realtor would lose their license for pulling a stunt like this. Here in Argentina they probably just get a pat on the back. Imagine if I had not emailed the owner. I probably would have increased my offer to the $94,000 asking price.
He informed his realtor that he wasn't going to pay them as I instructed him to. The seller was extremely ethical and a really great person. He told me that he would even lower the sales price and reward me since he didn't have to pay the 3% commission to his realtor. My realtor still had to split my 3% commission with the seller's realtor. You see, here in Argentina the seller's realtor is the important one. Not only do they get the 3% from the seller but the buyer's realtor also must split the 3% commission from the buyer. The seller's realtor essentially gets 4.5% of the purchase price. My realtor paid the seller's realtor 1.5%.
Two days before the signing of the title deed transfer, imagine my surprise when my real estate attorney (who is awesome by the way - probably one of the best real estate attorneys in Argentina) informed me that both realtors made a mistake. I HAD to purchase the garage. He reviewed the bylaws of the building and saw that the garage could only be sold to someone that lived in the building. The owner wanted to keep his garage since he owned a car and parking is relatively expensive. It is the realtors' job to make sure that this kind of thing is mentioned to the buyer when the buyer first looks at the property. Neither realtor mentioned this to either of us. I was stuck at the 11th hour basically buying a garage that I didn't need or want. I was disappointed with the buying process and the lack of professionalism and information.
This is a good lesson that there are so many ways to get cheated and conned here in Argentina when it comes to buying property. Luckily I did a ton of research and avoided getting conned -- but even with all my research I would have been cheated if I didn't exchange business cards with the owner.
A big part of my business now is consulting other foreigners on purchasing property. It's amazing to think about but many of my clients have never even seen their apartments that I purchased for them. They were referred by friends, colleagues or family members that I have purchased for. They know that no one in the city knows the real estate market like I do and no one is purchasing as much residential property that I am for myself and my clients. I have the best clients in the world and I have the best attorney in Argentina. I use trustworthy people and none of my clients have had problems buying and I helped them save a lot of money. The consulting fee they paid me paid for itself many times over.
Most realtors in Buenos Aires now know my company and they know the vast amounts of property I am purchasing. Some weeks I have purchased 3, 4 or 5 apartments. They know that I am an expert on property prices and they know that I know and understand the laws here so they don't even try to cheat me now. Also, they know that I'm a serious buyer and if I am making an offer I am serious and I have the ability to close on the property quickly. This usually results in a substancial savings for my clients.
I saw a few more apartments that day but I knew I would be making an offer on the loft apartment that I saw. Still, I asked to see the apartment at the end of the afternoon the following day to see how much natural sunlight it got. This is something that is important. If you are seriously interested in purchasing an apartment. Go see it at various times of the day so you can gauge the level of natural sunlight.
A few days later I had my realtor make an offer on the apartment. They were asking close to $100,000 including a garage. They offered the option of not buying the garage for around $94,000. Garages in a good part of Recoleta sold for about $7,000 - $10,000. I wasn't buying this to live in. I was buying it as an investment for a luxury apartment rental so I didn't need the garage. I made an offer for $90,000 which I deemed to be a fair price. I was there in the realtor's office after I signed the offer and they faxed it to the seller's realtor. I gave them 5 days to think about it.
Imagine my surprise 2 days later when the seller's realtor informed me that the seller rejected my offer. I was a bit surprised since the seller seemed very motivated when I talked to him in his apartment. He mentioned he was starting a "start up" Internet company and needed the money to fund it. His realtor said my offer was too low. This puzzled me. Luckily I had the business card of the owner because we had exchanged business cards. I emailed him telling him it was a pity that he didn't want to sell his apartment for that price as I thought it was fair. He shot me back an email almost immediately telling me that his realtor told him that my offer was for $84,000 instead of $90,000. We were both furious. His realtor had lied to him. My realtor did things properly and never was unethical.
I set up a meeting with the owner where we planned what we were going to do. Keep in mind his realtor was not some rinky dink small operation. His realtor was one of the largest realtors in town that had been around for many years. If this is how the largest realtors operated I wondered to myself how the very small no name realtors operated. It was clear to me to see that no matter how careful you are, you can still get cheated even if you're careful.
I met with the owner and he asked for my suggestion. I told him that he should tell his realtor that he wasn't going to pay them a penny. I told him that in the USA or UK a realtor would lose their license for pulling a stunt like this. Here in Argentina they probably just get a pat on the back. Imagine if I had not emailed the owner. I probably would have increased my offer to the $94,000 asking price.
He informed his realtor that he wasn't going to pay them as I instructed him to. The seller was extremely ethical and a really great person. He told me that he would even lower the sales price and reward me since he didn't have to pay the 3% commission to his realtor. My realtor still had to split my 3% commission with the seller's realtor. You see, here in Argentina the seller's realtor is the important one. Not only do they get the 3% from the seller but the buyer's realtor also must split the 3% commission from the buyer. The seller's realtor essentially gets 4.5% of the purchase price. My realtor paid the seller's realtor 1.5%.
Two days before the signing of the title deed transfer, imagine my surprise when my real estate attorney (who is awesome by the way - probably one of the best real estate attorneys in Argentina) informed me that both realtors made a mistake. I HAD to purchase the garage. He reviewed the bylaws of the building and saw that the garage could only be sold to someone that lived in the building. The owner wanted to keep his garage since he owned a car and parking is relatively expensive. It is the realtors' job to make sure that this kind of thing is mentioned to the buyer when the buyer first looks at the property. Neither realtor mentioned this to either of us. I was stuck at the 11th hour basically buying a garage that I didn't need or want. I was disappointed with the buying process and the lack of professionalism and information.
This is a good lesson that there are so many ways to get cheated and conned here in Argentina when it comes to buying property. Luckily I did a ton of research and avoided getting conned -- but even with all my research I would have been cheated if I didn't exchange business cards with the owner.
A big part of my business now is consulting other foreigners on purchasing property. It's amazing to think about but many of my clients have never even seen their apartments that I purchased for them. They were referred by friends, colleagues or family members that I have purchased for. They know that no one in the city knows the real estate market like I do and no one is purchasing as much residential property that I am for myself and my clients. I have the best clients in the world and I have the best attorney in Argentina. I use trustworthy people and none of my clients have had problems buying and I helped them save a lot of money. The consulting fee they paid me paid for itself many times over.
Most realtors in Buenos Aires now know my company and they know the vast amounts of property I am purchasing. Some weeks I have purchased 3, 4 or 5 apartments. They know that I am an expert on property prices and they know that I know and understand the laws here so they don't even try to cheat me now. Also, they know that I'm a serious buyer and if I am making an offer I am serious and I have the ability to close on the property quickly. This usually results in a substancial savings for my clients.
posted by ABA at 5/13/2005 08:42:00 PM
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