You’ll find that buying property in Ecuador is pretty straightforward. You won’t have to deal with a middleman. Nor are there title companies, and sellers and buyers are required to pay their own debts outside the sales process, like insurance, taxes, real estate commissions, etc. These issues are not brought to a closing, which is strictly between the buyer, seller, and the notary.
As always in a foreign country, be sure to engage a qualified local attorney, and he or she should be able to manage the transaction with few complications, avoiding potential pitfalls.
Once you have agreed on a price with the seller, have your attorney check the title. It is essential to have your attorney ensure the title is free and clear, without any liens or encumbrances.
If you are not purchasing immediately, your attorney will prepare a promesa de compraventa, or “promise to buy.” This binding, notarized document is signed by both buyer and seller, and will state the closing date of the purchase and the purchase price, as well as any penalties for default or other interim conditions of the sale. This is usually accompanied by a 10% down payment to the seller, which is typically non-refundable unless otherwise stipulated in the contract. If you are ready to purchase the property immediately, you can forgo the promesa de compraventa and move right to the compraventa (Step 3), which will mean savings in legal fees and notary charges.
Once you are ready to proceed with the purchase, both parties will sign (in the office of a notary) the purchase document, called a compraventa. Your attorney will have prepared this document in Spanish. To ensure that you are aware of all its terms, you should obtain a fully translated version. Moreover, if you are not fluent in Spanish, Ecuadorian law requires that a qualified translator represent you during the process. (This translator should not be your real estate agent.) If you claim fluency, most notaries will engage you in a brief conversation to assure themselves that you are. At this stage, you will pay the seller the agreed purchase price, or the outstanding balance if you’ve signed a prior agreement.
Your attorney will then arrange for the necessary tax payments and register your property at the land registry. The fee for this registration is minimal, and you’ll need two certified, notarized copies of your completed compraventa, as well as proof that any required fees and taxes have been paid. The registry will perform its own title verification, register the property, and return one registered (stamped) version to you for retention, keeping the other for its records. This is your final deed to the property. The process for registration and the fees required may vary slightly in different parts of Ecuador, but your local attorney will be familiar with these requirements. If you can’t be in Ecuador for any of the transactions that require your presence, you can give power of attorney to a friend or your lawyer at any notary office or Ecuadorian consulate.