- Oct 24, 2010
I have a question about role of real estate agents dealing with high end properties.
I am wanting to buy a expensive property en CABA. However, the real estate agents ( a famous one) is giving all sort of road blocks to me. Can experienced members here guide me on how to tackle them, please?
Some of my issues with them which I am not sure, one how to resolve or maybe I could be totally wrong? Please guide?
1. They ( real estate agent) will not let me meet/talk/ see/ do video call with owner till day of signing the escritura. Is that how it works? ( They fear, they will get sidelined and lose their commision)
-- Yes, this is totally normal. Realtors there are always worried that you will just by-pass them and cut them out of the deal. They don't get their commission until you do at least a boleto (30% down payment). One thing you might do if the realtor won't budge (although keep in mind it might ruin your trust and relationship with them, is you could just write up a letter with your contact information on it and tell the seller you're interested in buying their property. Still, they might be suspicious and prefer to go through a broker. But in the letter, you can say that you can go through and contact your Escribano to show that you're serious.
Remember, by law, you as the buyer get to pick the escribano to be used for the transaction.
2. They are asking for a 4% commision just for the fact that they have the property and shown me once. Its a lot of money for an expensive property. What is the law of the city for this? And what services are they expected to provide to pocket 4% commission!!!!
Yes, it's typically at least 3% and up to 4%. There is no law. It's what the realtor you're working with charges. Remember, they will only get half of that. They need to share 50% with the listing agent. It's the listing agent that always ends up making more money on the deal. They typically get about 2% to 3% from the seller and 50% from the buyer's realtor.
3, They want a fees to reveal property papers to my chosen escribano. They say - it can be refunded if I have genuine reasons not to buy after sighting the papers. What is the CABA law for this?
It's not normal to have to pay anything but are they asking for a "reserva" (deposit)? Because yes this is normal.
4. I had seen the property in glorious fotos fully furnished and decorated. when I went to see the property - at least 50% of it had been removed. I still loved it. Thereafter, I asked the real estate agent - I want to buy the property as it is ( decorated) . he says its impossible. The property will be stripped naked and I would only get the walls. I said, can you allow me to speak to owner to discuss this. he said - No. Is there a way around this?
NO, it's never assumed to have anything unless it's specifically listed as furnished. But most properties are NOT with furniture. You have to negotiate with the owner/his agent for each thing you want to buy.
5. I am looking to buy and hold for life time. They have agreed to my proposal to lower the price in escritura by 40% from what I would actually pay. Any cons to that ( especially as I am not planning to flip or resell).
It's tough to get 40% lower. Most reputable escribanos don't want to go lower than a certain threshold. Remember, technically this is illegal. Most escribanos will agree to go down lower but most a maximum of about 30%. Just remember that you will use the real price on the boleto but after that you destroy the boleto and on the title deed it will be listed as the fake lower price. Typically what many people do is just go 30% lower and the boleto (down payment) you pay will be used for that. And then at the closing when you wire the remaining 70% they can use that price as the amounts match up.
The only downside is the capital gains tax should you decide to sell it. Since you're using a fake lower price, your capital gains tax will actually be higher. But you benefit from lower annual property taxes each year as you're using the fake lower price.
6. What is the correct percentage fees for escribano on present day. Is it based on paid price or the price as input in escritura?
Most really good ones charge around 2.5% plus IVA. You can tell the Escribano you don't need an official receipt and he can typically discount some of the IVA fees.
7. Since its an extremely expensive property, I asked him I am ready to pay 33% immediately to show interest but I request 6 months to pay rest ( as I need to sell some property in another country to raise funds) . He laughed at me as if I was retarded. Then he ( real estate agent) declined without even consulting the owner.
NOPE. This isn't how it's done. Typically you put a reserva deposit and then do a boleto within 15-30 days of 30%. Then you close within a month or so. Sellers don't want to wait too long. They don't "finance". Argentines don't believe you should even start to buy or place offers unless you have 100% of the cash. Especially if you're a foreigner.
You typically sign a boleto document when you pay the 30% deposit saying you will close and sign the title deed within X days (typically within 30 days). If you don't then there is a penalty component of X per day for X days and then if you don't pay by X day then you lose the boleto. What you're asking to wait 6 months is totally unreasonable for a local. It's not like the USA.
8. How does one transfer cash on very high end deals like this?
You use a private institution to legally wire the funds in. You really don't want to mess around with the blue/black market as you want to do this all legal to avoid problems later. There are lots of reputable firms you can hire to bring in the funds. Just keep in mind you'll pay a % of the total amount. Typically 2-3%.
But realistically if it's a high end property, the owner definitely has a bank account OUTSIDE of Argentina and it's perfectly legal to wire from your bank in the USA or wherever it is to the sellers account outside of Argentina. However, it will be listed on the title deed. Many Argentines that are dodging taxes and don't have that bank account declared, won't want to do it that way. But if you can, try to get them to allow you to wire it abroad so it never has to enter Argentina.
9. Finally, he is not ready to lower the price even by 1 usd...from its listed price. I admist the property is damn good. I imagined we are in a bearsh market but it does not seem so.
- Many sellers won't sell unless they get the price they need or want. Many properties are for sale for many many years as owners are holding out. Remember it's NOT like the USA where owners are leveraged or have mortgages. Many properties have passed on for generations and generations. And even if they haven't, these are owned properties with no mortgages or debt on them. Some owners just want their #. It can be super frustrating.
But carrying costs of expensive properties can be very little in BA as the HOA fees compared to expensive cities outside the USA are very low relatively speaking. Also, property taxes are also relatively low. Especially if it's been in their family for a long time and the declared price of it is very low. Expenses/utilities are fairly cheap there as well. So they just aren't motivated many times to sell unless they hit their #. Still, more times than not, everything is negotiable. Just see how long it's been on the market.
Overall, I am not very happy dealing with such snarky agents. However, i really like the property very much. henceforth, my dilemma.
Can anyone advise me please on my 9 doubts.
Who is the listing agent on this property? Typically you have a buyers agent and then the seller's agent. Try reaching out to the listing agent directly if you haven't. That realtor will be more motivated to close the deal as they will make both sides of the commission. The downside is that they often times are looking out for the best interests of the owner but still, the buyer's agent doesn't do much at all.
You get to select the escribano you want to use on the transaction and they are the ones doing the heavy lifting.