Questions Re Purchasing An Apartment In Ba

[Sojourner]

Sometime in the coming months I will be purchasing an apartment in BA. I presently reside in the USA with my Argentine wife. I know the areas of BA we are interested in and the features and price range of the apartment we will be looking for. But there is a lot I do not know and I hope some experienced members of this board can assist me. Here are some of my questions:

1. In the US it is normal to pay for a housing inspector to go over a potential home buy and detail all problems discovered. This enables either a “no-buy” decision or serious price negotiation. Is this service or something similar available for apartment buying in BA? I could evaluate an apartment on my own but one is also buying a percentage of a building and I have no idea how to go about evaluating a building’s structural soundness, heating, electrical, water, elevators, etc. If there is no such thing as an “apartment building inspector” for hire, what recommendations do you have for evaluating an apartment building?
   
2. One is also buying into a community of owners. Any tips on how to evaluate the neighbors you will be purchasing along with the physical apartment?
   
3. I don’t know what I don’t know (and my wife’s experience is 40 years old). What other advice or tips can you give on the purchasing process to someone who only knows how to buy a house in the USA?

I will probably have more specific questions as we go along, and I hope this will be of general interest. In the meantime - thanks very much!

 

[Stevied]

Hi Sojourner - I can give you a little information, based only on my experience. I too have an Argentine wife, and we reside in the US. We bought an apartment in BA a year and a half ago. My wife has bought and sold many apartments in BA while residing there. Here are a few thoughts:

1. I am not aware of any home inspection service providers - based upon my experience, its not a common practice. I am sure you could find someone that could do this - but there is no custom like we have - where you use the inspection to either get the seller to make repairs, or you have an option to walk.

2. You should plan on finding a good Escribano - they are key to you having a smooth experience.

3. If you are not a permanent resident (you don’t have a DNI), the process will be difficult, but not impossible. You will, at a minimum, have to register at AFIP to get your tax id number. (Your escribano can help you through this process - highly recommended).

4. Unless things have changed in the last year (and its possible they have), all real estate transactions are in cash, and in dollars. Getting a large amount if dollars into the country is difficult- it can be done, but be prepared to pay a fee (probably 1-3%), and you will have to provide documentation of the source of your funds.

Anyway, the process is quite a bit more difficult than in the US, but with a little patience you’ll get it done. It will help if you are already living there - I did my closing remotely (from the US), but we have many relatives in BA, so it wasnt so bad.

Good luck!

 

[RichardP]

I would try to talk to the portero of any property I was interested in and get the scoop on the neighbors. Nobody is more familiar with goings on like them. Some buildings have feuds among residents that have lasted generations. One lousy neighbor can make for a pretty miserable living experience for many.

You might look into an architectural firm to check out the property if they allow such access to other parts of the building. Architects in Argentina routinely oversee construction projects directly and are knowledgeable in many phases of building.

 

[Sojourner]

Thanks for the comments. Regarding documenting the source of funds, what evidence are they looking for? Would it be sufficient to provide bank statements and/or retirement income statements? I'm wondering because the bank statements would only show the result of saving, not how those savings were generated (which presumably could be nefarious).

Thanks!

 

[steveinbsas]

Thanks for the comments. Regarding documenting the source of funds, what evidence are they looking for? Would it be sufficient to provide bank statements and/or retirement income statements? I'm wondering because the bank statements would only show the result of saving, not how those savings were generated (which presumably could be nefarious).

Your escribano/a will tell you what you need to provide to satisfy this requirement. Bank statements with the supporting retirement income documentation might be enough if the retirement income alone has generated sufficient funds to pay for the apartment as well as the related costs (omissions, taxes, and fees).

At the closing of the first apartment I bought the escribano simply asked me where the money came from. I told him "the sale of my house" and that was it. I had copies of the sales agreement/contract and bank statements showing the deposit of the funds, but he didn't even ask to see them or ask where I got the money to buy the house 5 years earlier.

We had the closing in the office of the casa de cambio where the funds had been wired to from my US bank. I had provided them with the copies of the sales contract and the bank statements so at least they had "proof" of the source of the funds that were used to buy the apartment. Perhaps the escribano knew (or assumed) this.

PS: I received the precaria for temporary residency two days before initiating the money (wire) transfer. This made it a little "easier" to transfer the funds. I already had a CDI from AFIP (easy to get without the help of the escribano), but the escritura showed my US passport number as my "official" ID (I would not receive my DNI until 90 days later).

PS2: There was no "boleto" for the purchase. We went straight from the offer to the closing. I had the keys to the apartment in my hand 15 days after seeing the apartment for the first time and making an offer that was accepted the same day. The apartment was unoccupied so there was no need to wait for the seller to find another apartment and move out.

 

[Ries]

I am unaware of home inspectors as in the US, but it would not be a bad idea to get an architect to help you evaluate your final few choices. There are a lot of great architects in Buenos Aires, and, most of them have extensive experience renovating older buildings- the opportunities to build new homes from scratch are few and far between here. Architects, of course, also know contractors for most trades. And many of them are at the least bi-lingual.

 

[HenryNisental]

I had very good experiences with this escribano:

Carlos Garcia Toledo

Juramento 2550 5A
CABA 4784-2508/ 4782-1988

 

[julian63]

Buying property in Bs As (Arg?) is, unfortunately, great sport. I bought 9 years ago. These are my observations based upon that experience.
1. First, sellers are not required to disclose anything in writing or orally including defects known or unknown. This pig in a poke type of sale is exacerbated by the fact that Inspections by experts are not the norm. I would recommend you bargain for them by making contingencies as if you were in a more civilized land.
2. Real estate agents did not have to be licensed to broker a 3rd party deal. I doubt if there is any licensing requirement at all.
3. "Your" broker owes no fiduciary duty to you. Accordingly, do not expect to learn everything s/he knows affecting the property nor is s/he under any enforcible duty to keep confidential what you share with him/her.
4. There is no title insurance as you probably understand it. Title insurance, such as it is, is provided by the solvency of your escribiano should his limited title search fail to catch a forged signature on a deed or other defect in good title like a lien. Accordingly, it's wise to choose a wealthy escribiano, not only a smart efficient (and hopefully honest) one. How you go about making a claim should title prove to be defective and you sustain a loss is beyond me.

I bought before I had a DNI or other resident or tax identity. I used a money movement and investment firm allied with my broker (one which specializes in servicing foreign buyers). They were good at getting my money moved from my US accts to the local bank where the closing was held including the acquisition of the documents necessary to do that. If you want to contact info for that firm please message me.
p.s. My 1bdrm +study/bdrm apt in Recoleta will be for sale.

 

[Sojourner]

Thanks for the generosity of the detailed responses I have gotten to my initial questions, both by post and by message. I would like to ask a related question, this one regarding peripheral expenses in purchasing an apartment in Buenos Aires.

One responder mentioned the exchange fee involved in moving cash from the USA to BA as being on the order of 1 - 3%. I have the idea that an escribano runs around 7 - 8% (true?). I am wondering what additional expenses on a fixed or percentage basis can be expected for (just guessing) filing of documents, taxes, realtor fees (?), etc.

Basically I would like to know how much expense I must deduct in an estimation of the property I can afford.

Again, thanks!

 

[steveinbsas]

.
One responder mentioned the exchange fee involved in moving cash from the USA to BA as being on the order of 1 - 3%. I have the idea that an escribano runs around 7 - 8% (true?). I am wondering what additional expenses on a fixed or percentage basis can be expected for (just guessing) filing of documents, taxes, realtor fees (?), etc.

Basically I would like to know how much expense I must deduct in an estimation of the property I can afford.

The escribano's fee should not be more than 2% but in Argentina the buyer pays the real estate commission which is usually 4%.

I may be a little rusty on other costs but the first time I bought a property in BA there was also a tax of about 2% that were split by the buyer and seller. A first time buyer may have been exempt at the time.

All of the costs combined (including the transfer fees) shouldn't exceed 10%.

Other members are encouraged to update these figures as well as anything else in my posts.

If you buy an apartment with monthly fees (espensas de consorcio) I suggest you get copies of the past few years of the monthly reports from the seller or the administrator. The administrator will be a professional who is not an owner of one of the apartments.

This way you will be able to see the history of the monthly fees and also see if there are any deadbeats who aren't paying their expenses. If there are, that means all the other owners are paying more than their fair share.

Even before you see the reports, ask the real estate agent how much the monthly expenses are, but don't take his/her word for it. I was told the expenses for the apartment I bought in November of 2006 were $350 per month but the December expenses were $450.

The building only had 14 units and the two young men who moved into their mother's apartment after she died refused to pay. Their total tab when I left in June of 2009 was well over $50,000 pesos.

And the monthly expenses were about $800 pesos by then, even though the exchange rate had only increased by about 30l%

Both Stevied and I mentioned the tax ID (DNI/CDI) requirement. You indicated your wife is Argentine and bought properties in BA in the past. I assume she has a DNI and that you do not. If that's correct,she could buy the property in her name only and you would not have to get a CDI from AFIP.

Neither temporary or permanent residency are required to buy property in Argentina.

If you want to have the apartment in both of your names you will need to find out what ID will be required. Perhaps your passport number will suffice, but as I previously indicated, getting the CDI from AFIP is easy.

You didn't indicate of you are planning to live in Argentina for more than six months of the year. If you are you will need to apply for permanent residency.Being married to an Argentine makes you eligible for that without having to meet the income requirements of the visa pensionado.

If you get permanence residency you will also be subject to income tax in Argentina (on monthly income over $30,000 pesos for a married couple) as well as the bienes personales tax on your worldwide assets. If your wife is an Argentine citizen and hasn't been paying taxes on her foreign (aka worldwide) income (if she had any) I wonder what AFIP would have to say about that now.

I suggest you get the latest tax information from an Argentine accountant, I would ask the account if there's any advantage of putting the apartment in your name only, especially if you are not going to apply for permanent residency and do not plan to live in Argentina for more than six months per year.

If that's the case you would not be subject to any income taxes in Argentina..