In the interest of full disclosure, I offer the following: I got my first Real Estate Broker's license in 1972, a short time after leaving Viet Nam. I have been involved in real estate operations in many countries, including Jamaica, the Cayman Islands, and Mexico. In all cases my clients came from distant locations, like the US.. I am not currently a resident in Ecuador, but plan to be as soon as I finish arranging my life so that I am not one of those who come and leave within 2 years. I have visited and plan to do more until emigration. I also keep up with this forum as best I can, and others including Military Veterans in Ecuador.
This post is prompted by observation of a lot of disparaging and snide remarks about real estate brokers on this forum. I'd like to say a few words on the subject.
I find Ecuador to be a great country with a lot of advantages for expat persons and families. It has a super culture, with warm and accepting population. There are great natural resources, and a multitude of climates to meet your desires. The government is friendly to its citizens, and is interested in raising its standard of living. It offers the same economic advantages to expats as to its own citizens. Check out the cost of living for retirees!
Now look at some of the factors that offer both advantages and disadvantages to those who want to come live here. Ecuador is a third world country. In many ways it is like the wild wild west truly was in America's history. There is little regulation, and protection against fraud and corruption. Government is inefficient and difficult to traverse for those who must interact with it.
This is a pretty accurate picture of the scene facing those of us who want to come and base our lives here. It is particularly vexing when it comes to investing the money for a place to live.
Look at some of the risks. 1. There is the "Gringo effect". If you approach a property owner to buy his property, he takes one look at you and quotes a price anywhere from 20 to 50% higher than he would quote a fellow Ecuadorian. 2. There is no Stewart Title company or similar 3rd party assuring you that the person you are talking to actually has a clear title to the property, and the money you pay him actually gives you clear title. You can consult an attorney, but how do you know you have an honest one? 3. There is little or no financing available for a real estate purchase, so if you make a mistake you are seriously damaged. 4. How can you assure yourself this guy hasn't sold the same house to three different buyers this week? 5. How do you know he real market value of the property you want to buy? There is no central listing of transactions to allow you to see what similar properties have sold for. Besides that, most owners lie about the sale and purchase prices to the government to reduce the amount of the property transfer tax.
Those are some of the issues you face when moving to EC.
There are several ways you can choose to mitigate the dangers you face. You can spend considerable time and money not only on determining the location you want to live, but finding the answers to the issues we raise here. If you have the time to take this approach, it might be a good choice - especially if you speak fluent Spanish. If not, your first task is to find a native who does to help you thru the morass.
Another option is to go to a reputable real estate broker. (I can hear the screams already!). These people whose entire livelihood depends on knowing how to navigate the swamp we just talked about. You will note I used the word reputable. This industry in an unregulated place like Ecuador certainly has its share of charlatans and thieves. You certainly need to check out the broker you choose. What is the reputation in the community? What are the references they can give you from previous clients? How long have they been active in the Ecuadorian market? How much experience did they have in the US or Canadian Market? What was their reputation in those markets. (It's very easy to check for complaints, suits, etc. in the US and Canada.).
It is very true that if you find the property you want, are a good negotiator, and can traverse the quicksand that you can buy cheaper from an owner. This is true in the US as well as anyplace in the world, providing the broker and the owner have not entered into an exclusive right to sell agreement.
OK, so what is the cost for these services. In general, n locations where the buyers comes from distant locations, the fees are usually between 6-10% of the selling price. A point to note is the broker wants to sell the property, so he has already negotiated with the seller to establish a fair selling price, not the "Gringo Special".
In any event, knowing these factors, you are free to choose "Door A", and go it on your own, or "Door B" and get an expert to help you thru the process.
My final word is this. Reputable Real Estate Brokers do not deserve the contempt I see expressed all to often on this forum, and buyers who make big mistakes do not deserve the contempt I sometimes hear from real estate salespeople. Brokers offer their services, and buyers are free to choose. Most folks on both sides are trying to make the best decisions they can.
God bless us all.
Ecuador
Living in Ecuador Guide
Ecuador Forum
Contribute
Best Places to Live in Ecuador
Healthcare in Ecuador
Moving to Ecuador Guide
Pros & Cons of Living in Ecuador
10 Tips for Living in Ecuador