My experience is limited to buying only 1 apt in the DF 3 years ago. Here are my observations/experiences for what they are worth. I invite the real estate pros here to comment if I have something wrong.
1. Apparently, there is no licensing procedure/requirement to become a real estate broker so anyone and their uncle engages in the business, some on a part time basis. Consequently, there are a lot of incompetents in the field.
As there is no fear of losing one's license for unethical conduct, unethical conduct is rampant however, unethical conduct, itself, is hard to define as the ethical requirements inherent in US law do not exist in Argentine law. As far as I could tell, there is no fiduciary duty on the part of one's own agent to fully disclose all that the agent knows relevant to the transaction. As a consequence of the lack of a legally mandated fiduciary duty, one cannot rely on what one's own agent says or doesn't disclose. Ask a lot of questions and get all promises and information upon which you will rely in writing. Do not believe or rely upon anything either of the agents simply "tell" you (condition of property, hidden defects, status of homeowners association, liens against property, etc).
2. I used a "buyers" broker, a famous one that advertises in English in the BA Herald a lot as catering to foreigners and diplomats, etc. The broker assigned an agent who spoke English. She showed me properties listed with other brokers as well as those listed by her own company which would create a larger commission fee and would explain why I was shown apts I had specifically described as unacceptable. It was explained to me that I would be paying a set fee (as best as I can recall about 3.5% of the purchase price) some of which would be paid to the seller's broker and that the seller would also pay an additional fee.
I found my agent and her English speaking managers back at the office to be unhelpful in teaching me the basic ropes for the buying/escrow/closing process, not to mention the finer details that might allow me to negotiate more wisely or obtain assurances about the condition of the property and the homeowners' association.
3. A small downpayment (1 or 2%) is tendered with the buyer's written offer. If the offer is accepted, the normal process requires the buyer 2 or 3 months later (at the "boleto") to pay about 30% down - not to an independent escrow company, but to the seller! This is foreign to most US residents where escrow companies (usually banks or title ins subsidiaries) hold the downpayment and other important docs. I don't know how much havoc is wreaked by having sellers' hold the downpayment and then default, but I imagine it can be a nightmare when it happens. Apparently, the seller is subject to a penalty on the order of twice the downpayment if he fails to go through with the sale which brings to mind a lot of "if" jokes (as in "if" he has the $, I can get it back "if" I sue...). As far as I can remember, there was no set rule or contractual provision for what would happen in the case of certain contingences , e.g., a fire or other part or complete destruction of the property in the interim between the boleto and the escritura (closing).
4.There is no obligation on the part of the seller to disclose defects or any other unusual conditions affecting the property. It is pure caveat emptor of the highest order. When I insisted on the contractual right to have experts examine the property for defects subsequent to the boleto and to condition my obligation to buy on their satisfactory reports, my broker looked at me like a side dish she didn't order.
I also inquired about the condition of the homeowners association and monthly condo fees and specifically whether any special assessments over and above the disclosed monthly fees were required. I was informed of nothing so I innocently assumed that meant no. At the closing I was informed there was a special assessment in progress that would obligate me, as owner, to pay an additional 4000 pesos in fees over the next 6 months. So much for reliance on my broker.
5. I asked the seller's broker why the seller was selling. I was told she had bought the apt for her daughter to use while she was attending a school and that this was no longer necessary. More about that later.
The listed selling price for the apt I was interested in was 165K. This was high in terms of $/sq meter (although admittedly the property was impecable) so I figured I should offer 145K to get the ball rolling. My agent was aghast at my number and said that the norm was to reach a price about 4% less than asking. I guess this was based upon the assumption that all sellers possess the same mentality and that none never ever set a listing price more than 4% over what they would accept! What hogwash advice that was, however I was talked into raising my offer to 148.5K.
My offer included skipping the boleto process and going directly into the escritura thereby eliminating the need to rely upon the trustworthiness of the seller and eliminating any doubts about what would happen in the event of some unforseen contingency e.g. default or fire etc. Other than requiring a boleto my $ offer was accepted within 2 days. Looking back this was probably because I had signed a second offer (a true low ball offer) on a different property and instructed my agent that if the first offer was not accepted within 2 days, she was to withdraw it and make the offer on the second property. In retospect that was an effective strategy. The seller had no idea of the inadequacy of my offer on the second - surely neither of the agents was going to say anything about it.
6. I was provided with an escibiano by my broker. He spoke English. He was also the owner of a large estancia with many 000s of head of vacas as well as soy hectares. When I asked about title insurance if he made a mistake conducting the title search for liens or if the purchase was overturned because of a prior forged deed as occasionally happens, he simply referred me to his own personal financial responsibility. Title insurance doesn't exist as we in the states know it. I have no idea if he was a good escribiano, but he was a nice guy and a successful rancher.
The broker also hooked me up with a financial firm (in the same building) that facilitated wiring funds from my bank to its bank (which required an element of "trust me" I was unable to avoid) and setting up a bank account to receive the $. This involved visiting a police office to get a document acknowledging a residence in town (a rented apt at the time), then another municipal office to get some doc, then the bank (HSBC). The financial assistant accompanied me at all times and charged a reasonable fee. He was by far the most intelligent and helpful person I met in the entire process.
7. At the escritura I met the "seller" for the first time. She informed me that she had negotiated a discount of her fee because she ultimately agreed to her broker's insistence on scheduling a boleto instead of going right into an escritura as I had offered to do. As it turns out, the 2 brokers got together and instead of executing the transaction as instructed - without a boleto - they conspired to disregard my instructions to forego the boleto process. One even reduced its fee to do so! (although this fee reduction might have been shared with my broker - who knows what shenanigans these characters engage in).
As mentioned above, it was at the escritura/closing that I discovered the necessity of paying the temporary special condo assessment effectively raising the cost of the purchase by 4000 pesos. Through casual conversation while waiting for the cash to arrive, I also was first informed (erroneously) of the necessity, triggered by real estate purchase, to pay taxes on my worldwide net worth, a legal necessity I later learned was limited only to my Argentine located net worth. Although I had some idea of the 1.25% net worth tax, none of this taxation business was ever mentioned to me by my broker. Of course, to do so might have negatively influenced my decision to buy thus depriving these creeps of a commission.
Prior to the escritura I had asked my agent to convey an offer to buy a lot of the furniture that was in the apt. The seller, a friendly woman with whom I had immediate good rapport, told me no one had asked about it, but that she was desirous of selling the stuff. Again, my broker had disregarded my instructions to my prejudice. I subsequently discovered that the friendly woman seller was really the personal secretary of a very rich man who held the property in her name so the rich guy's wife would not know he had a pad in the Recoleta for nighttime trysts with paramours. There's a name for this relatively common phenomenon which escapes me now. So much for daughters attending school.
The bottom line is that real estate brokers in BA are generally unreliable and unethical for those accustomed to dealing with licensed, regulated brokers subject to laws in, for example, all US jurisdictions. This is much more relevant to anyone seeking to purchase an apt in BA than whether it is advisable to forego the use a buyer's broker in order to save a couple of % - if indeed doing so really does eliminate some fees.
P.S. I love my BA apt despite the hassle I went through to acquire it. It is a real pleasure to come "home" to a couple of times per year to satisfy my craving for a delicious ojo de bife.
