Ecuador

Retiring to Ecuador: Property Purchase Process

By Christian MacDonald

The process for buying a property in Cuenca is simple and straightforward. In fact, it’s so simple that you can close on the same day you make the offer, as long as you’ve got the money.

Here are the basic steps in a property transaction…

1. Make an offer. Most offers are made in person or by telephone, either directly from the buyer to the seller, or through a real estate agent. Offers are not typically conveyed in writing.

2. Execute a promesa de compraventa (sales contract). This is an optional step. The promesa is a publicly recorded and binding contract, useful when you need to “lock down” the sale and specify any terms and conditions. It is necessary to deliver a down-payment, spell out terms for full payment, set a closing date, or specify penalties for default. If you are ready to buy the property right away, you can skip the promesa and move on to the next step.

3. Complete the escritura de compraventa. This is the final sales document, and serves as the deed to the property once it’s recorded in the property registry.

Important note: After execution of the escritura, the promessa de compraventa-if you had one-is void, along with any of its terms and conditions.

4. Register the property at the registry. Once the escritura is signed, the taxes will be paid and the completed escritura will then be registered in the Registro de Propiedades. The property is now officially yours.

To participate in the property transaction at the notary’s office, you must be able to speak Spanish well enough to understand what’s going on. If you are not sufficiently fluent, Ecuadorian law requires you to have a translator present, in order to protect your rights. This does not need to be a certified public translator…your English-speaking lawyer will be fine.

With my first property transaction in Ecuador, I had to use a translator. For my second purchase, I was on my own, but the notary had engaged me in casual conversation for a few minutes in order to judge my Spanish skills before getting started.

5. Title insurance is available in Ecuador, from First American Title, who will actually issue you an American policy to cover your property in Ecuador. For more information, write to Vice President Tuey Brady-Murdock at TMurdock@firstam.com.

First American will also provide escrow services, where they’ll hold the funds, and disburse them when all parties are satisfied with the transaction. I’ve used this service and recommend it highly. It’s most useful, however, with North American buyers; if you’re selling property to an Ecuadorian, they likely will not be familiar with escrow, and will see little reason to trust the process.