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The system for buying a property or land here in Argentina is different to most of those in English speaking counties like the UK and United States – that in itself doesn’t make it bad, it just takes a bit of understanding and getting used
“It’s a jungle out there, thieves on every corner and you’ll be robbed while you sleep and even in broad daylight”. That’s what some would have you believe will happen to you if you dare to buy a property here and you decide to “go it alone”. I would be foolish to say that fraud does not takes place but it’s not as bad as has been made out and if you are cautious you will fine – if you don’t employ caution then you may also be fine but of course you may be unlucky and have a problem. I seem to remember a story of someone selling a building called the Empire State building that they didn’t own some decades ago so I guess real estate fraud can happen in any country if care isn’t taken.
The Reserva – a dilemma!
The one part of the transaction here in Argentina that seems to cause most concern is the question of the “reserva”. This is a refundable deposit, which is given to the owner as an act to show your sincerity that you really do want to buy the property in question.
Having just helped another client here at Tierra Estates (www.tierraestates.com) purchase an apartment I often see at first hand how the reserva causes a little confusion Our client (American) just couldn’t understand that his money for the reserva was going to go straight to the seller. In the States as I understand it (as in the UK) any money used as a deposit goes to a lawyer for them to hold until the final contract is signed, but here this is not the case with either the reserva or the subsequent 30% for the boleto.
What happens in Argentina is that once a buyer finds an apartment he will be asked to pay a reserva. The amount for the reserva has certainly increased over the years – a few years ago I purchased my first apartment here with a reserva of 400$us, now you are likely to be asked for 2000$US, and sometimes 3000$us– it’s a sign of the changing market. A couple of years ago people were desperate to sell here but there were not many buyers - now they know they are going to sell since there are plenty of buyers and hence the hike in the amount of the reserva.
One outcry about handing this money over to the seller is what safeguards there are in place to prevent the seller just running of with your hard earned cash. The answer is, of course, due diligence. In theory there is nothing to stop the seller running of with your money – however before you decide to cancel that idea of buying a super cool apartment here be aware that sellers rarely run off with buyer’s money. Once again that’s not to say it doesn’t happen - it certainly does, it’s just a question of exercising the normal degree of caution that you would employ in your own country in order to prevent it. For instance, here at Tierra Estates, we always insist to our clients that a reserva contract is signed in our offices with our lawyer present. We also insist that all documents relevant to the property are presented at this stage, such as a copy of the escritora , household bills etc and an identity card or passport of the seller. Only once all these documents are checked is the reserva handed over and the buying process begins. Once the reserva is handed over and the document is signed the next part is usually plain sailing. Whilst you will undoubtedly hear stores about malpractice and dodgy documents, in the majority of cases as long as professionals are employed in the transaction you will be fine. It’s true some Argentineans can be a bit “fly” sometimes but not as often as is made out and lets be fair it if you really thought that they were really out to get you you wouldn’t be here. Property buying and selling here is a sophisticated business – if you don’t believe that, have ever tried to buy property in Thailand?
If you do decide to go it alone just remember that, as anywhere in the world, if it sounds too good to be true it probably is and run for your life. But also remember that many here have purchased without assistance and didn’t lose their shirt, and if this little bit of information has helped you that’s great. However if you decide that you want professional help or you just want a chat about how we can help we will be delighted to talk to you.
David Cummings
Tierra Estates
www.tierraestates.com
