Colombia is an attractive country to invest in real estate, and the low housing costs, compared to countries like the United States or England, position this Latin American country as a good option for investment.
However, If it is a foreigner who is going to carry out investment in real estate, there are some points that you have to be clear about when making your purchase, especially because taxes and rules change according to each country and in this article, We will give you a detailed guide of everything you need to know to have a successful sales process.
Starting with a fundamental part, you must remember that selling houses in Colombia can be delayed. According to a study carried out by Synapsis and published in Portafolio Magazine, these are the figures that account for this.
According to the study, these are the main reasons the process is so delayed.
Owner's lack of time to show the property
Not finding suitable potential buyers
Somethings that you need to know to Selling Real Estate in Colombia
Now, we show you the step-by-step and important information you must keep in mind during your real estate sales process in Colombia.
First, foreigners are permitted to buy and sell real estate in Colombia. The process for selling in Colombia is essentially the same for both.
However, there are two important notes for foreigners to know when selling real estate in Colombia.
Colombia has NO title insurance and NO escrow (except for new construction properties).
Preparing a Property for Sale in Colombia
Not all Colombians properly prepare real estate properties for sale or rent. For example, some properties on the market for sale and rent are dirty inside and have stained walls.
Preparing a property for sale in Colombia is similar to what is done in other countries. Here are six (6) tips for preparing a property for sale in Colombia:
Remove clutter
Clear out all the non-essentials and rent storage space for your things if needed.
Paint the interior
Old stained paint makes rooms look decrepit. A fresh coat of paint is normally worth the relatively small investment.
Professional cleaner
A clean home is more inviting to potential buyers, whereas a dirty home can turn them away.
Repair
Some damage, such as a stain on the ceiling or a leak in the toilet, can turn someone off from buying your house.
Good lighting
Illuminated spaces are more striking than dark ones
Great photos
The photos used in a listing can result in more viewings and help in the sales process.
What are the Steps to Selling Real Estate in Colombia?
There are six primary steps to selling real estate in Colombia:
Step 1: Find a Good Real Estate Agent
The first step in selling a property in Colombia is to find a good real estate agent. Working with a professional to sell your property has many benefits, as it is more difficult to sell a property yourself.
An experienced real estate agency can sell your home faster and for a better price than you can. If you are a foreigner in Colombia, it is important to find a bilingual agent.
In addition, before a real estate agent begins selling your property, they can be a great source of information to ensure the property is priced correctly. Don’t be like many sellers in Colombia who put a ridiculous price on their property, resulting in it sitting there for years without an offer.
Also, remember there is no licensing of real estate agents in Colombia. So, it’s possible to find real estate agents that aren’t very professional and have little experience.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
- Transfer funds to Colombia
- Legal analysis property background checks
- Sales agreement
- Deed registration
- Legal representation
- Investment visa
Real Estate by expatgroup.co
Step 2: Showing the Property to Prospective Buyers
Once you have found a real estate agent, you should receive requests to show the property.
In our previous section, we showed you some tips on how to prepare your house before selling it. Below, we leave you some advices that may be useful during your future buyer’s visit.
Don't be at home
It is better that not so many people are at home when showing the property.
No pets
Avoid bad moments, not everyone likes pets.
Open doors and windows
You will keep the space smelling good and illuminated.
Step 3: Negotiation and Verbal Offer
This is when a buyer negotiates with the seller for the price and terms.
This is when a lawyer will check a “certificado de tradición y libertad,” which is a history of the property, and a “certificado de paz y salvo,” predial that states municipal property taxes have been paid and a “certificado de paz y salvo de valorización” that verifies that taxes related to increases in the value of the property have been paid.
Also, if the property is located in an apartment building or gated community, a lawyer will check if there are a lot of unpaid administración fees (like HOA fees in the U.S.). Some apartment buildings or gated communities do not properly collect administración fees from owners, resulting in insufficient maintenance funds.
If everything checks out, it is time to negotiate the price with the prospective buyer. Nothing is binding at this point.
Step 4: Promesa de Compraventa – the Purchase Agreement
After negotiation, a lawyer will draw up a purchase agreement, known as a “promesa de compraventa.”
This is a binding contract where you state the intention to sell at a given price, and the buyer states the intention to buy.
Colombians are sophisticated negotiators. So, it is common for Colombians to renegotiate right up to signing the “promesa de compraventa” at a notary.
You can also make changes if you feel they are needed before signing the purchase agreement contract at a notary. Be careful with the gringo pricing.
What is Included in a Typical Promesa de Compraventa?
Step 5 – Closing at a Notary
If things go as planned in the “promesa de compraventa,” the closing happens on the date specified in the purchase agreement with the signing of titles, exchanging funds, and the new owner receiving keys to the purchased property.
However, sometimes issues arise, and this closing date may slip.
Step 6 – New Owner Gets the Title
If everything goes smoothly with the closing, a lawyer will ensure everything is done correctly with the “registro de instrumentos públicos,” which handles titles in Colombia.
Once the new “certificado de tradición y libertad” is issued, the new buyer can rest assured the property is his/hers. It typically requires about a week for this certificate.
What Are the Closing Costs Involved in Selling Real Estate in Colombia?
Selling real estate in Colombia involves closing costs, including taxes and fees. Closing costs at the time of purchase include notary and registration fees, legal fees, and real estate agent commissions.
Main closing costs in Colombia include
Retención en la Fuente
one (1) percent, paid by seller.
Registration
One (1) percent, split 50-50 by seller and buyer
Government tax
one zero point five (1.05) percent, split 50-50 by seller and buyer
Notary fees
Usually less than 1 million pesos, split 50-50 by buyer and seller.
In addition, the seller normally pays a real estate commission of 3 to 5 percent. For a lower commission, this is typical, with fewer services than a traditional Colombian real estate agency provides.
Also, the buyer pays legal fees for a title study, purchase contract, and closing/title change, which are typically fixed prices regardless of the property’s value.
In addition, the seller would be responsible for paying at least a 3 to 5 percent commission to the real estate agency. And the buyer would be responsible for legal fees.
So, the seller would pay 5.5 to 7.5 percent of the purchase price for closing costs and the real estate agency commission. The buyer would roughly pay around 3.0 percent of the purchase price for closing costs and legal fees.
Are You Looking to Buy or Sell Real Estate in Colombia?
Medellin Guru has partnered with Real Estate by expatgroup.co to provide real estate services to foreigners and locals interested in buying and selling properties in Medellín and across Colombia.
Recognizing our readers’ demand for real estate guidance, this partnership with Real Estate by expatgroup.co aims to deliver trustworthy and comprehensive real estate services to our audience.
We chose to collaborate with Real Estate by expatgroup.co for buying and selling real estate services for several reasons:
- Real Estate by expatgroup.co is recognized globally and is a familiar brand for foreigners.
- As one of Colombia’s largest realtor companies, Real Estate by expatgroup.co has extensive coverage throughout the country, enabling it to serve various locations in Colombia.
- They boast a robust team of agents, many of whom are bilingual in English and Spanish.
- Real Estate by expatgroup.co ensures fair pricing through a thorough Comparative Market Analysis (ACM).
To access this real estate partner service from Real Estate by expatgroup.co, click the button below, complete a brief form, and receive a complimentary consultation offering insights into the local market, current pricing, and tips for buying or selling properties.
Medellin Guru Real Estate Service
Our reliable partner, a leading real estate company, offers a wide range of services:
- Transfer funds to Colombia
- Legal analysis property background checks
- Sales agreement
- Deed registration
- Legal representation
- Investment visa
Real Estate by expatgroup.co
Medellin Guru's Guide to Buying, Selling and Renting Apartments and Choosing a Neighborhood
On the Medellin Guru website, we have a comprehensive and up-to-date guide to buying, selling, and renting apartments and choosing a neighborhood in Medellín found in several articles, including:
Buying and Selling Apartments
- Medellín Real Estate: 2020 Property Buyer’s Guide for Foreigners
- Selling Real Estate in Colombia: A Guide to Selling for Foreigners
- Mistakes Foreigners Make When Buying Real Estate in Colombia
- Current Costs to Buy New Apartments in Medellín – 2019 Update
- Rent vs Buy: Downsides of Renting and Buying Property in Medellín
- 11 Things Real Estate Agents in Colombia May Not Tell You
- How to Obtain an Investment Visa for Investments in Real Estate
Renting Unfurnished Apartments:
- Apartment Rental Guide: Renting Unfurnished Apartments in Medellín
- Guide to Finding Unfurnished Apartments in Medellín and Casas
- Guide to Overcoming the Fiador (Cosigner) Requirement in Colombia
- 2019 Unfurnished Apartment Rental Costs in Medellín
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
- Furnishing Apartments: A Guide to Furnishing Apartments in Medellín
- Apartment vs Casa (House) Rentals in Medellín: Pros and Cons
Renting Furnished Apartments:
- Furnished Apartment Rental Costs in Medellín – 2019 Survey Results
- Guide to Finding a Furnished Room for Rent in Medellín
Choosing a Neighborhood in Medellín:
Also, we have several articles that can be used to help foreigners choose a neighborhood in Medellín:
- What are the Safest Neighborhoods in Medellín and the Aburrá Valley?
- 5 Best Neighborhoods in Medellín: A Guide to Choosing a Neighborhood
- 8 Downsides of El Poblado: Living in Medellín’s Expensive Neighborhood
- Estratos: A Guide to Understanding Estratos in Colombia
- El Poblado vs Laureles: Which is the Better Neighborhood to Live in?
- El Poblado vs Envigado: Which is the Better Neighborhood to Live in?
- El Poblado vs Sabaneta: Which is the Better Neighborhood to Live in?
- El Poblado vs Belén: Which is the Better Neighborhood to Live in?
- 2018 Unfurnished Apartment Rental Costs in Medellín in 5 Neighborhoods Popular with Expats
- 6 Inexpensive Neighborhoods for Unfurnished Rentals in Medellín
The Bottom Line: Selling Real Estate in Colombia – A Guide to Selling for Foreigners
Investing in real estate in a foreign country can be exciting and rewarding but also involves some risks. We have looked at the risks of investing in real estate in Colombia.
If you are a foreigner buying real estate in Colombia, it is also important to understand the steps involved in selling real estate in Colombia, plus the closing costs required, which are covered in detail in this article.
Keep in mind that selling can be much more difficult than buying. Also, selling real estate can take much longer than buying.
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7 thoughts on “Selling Real Estate in Colombia: A Guide to Selling for Foreigners”
Hi Jeff. I am need of a realtor to sell my property in elke valle del Cauca. It is a “casa campestre” located on the way to Buenaventura. 45 min from Cali. Can you recommend someone !
Fill out this form and Real Estate by expatgroup.co may be able to help or recommend someone – https://medellinguru.com/directory/real-estate-by-expatgroup/
Dear Jeff,
Im intereses in offer a pie e of land in El Peñol with acces to the reservoir.
Could you help on this matter or how should I proceed to get my land published in your webpage?
Thank you in advance.
We don’t permit real estate ads on Medellin Guru. You can contact our real estate partner Real Estate by expatgroup.co that can list your property – https://medellinguru.com/directory/real-estate-by-expatgroup/
Jeff,
I am a retired realtor from the US helping my expat friends sell their home. Their apt. in south El Poblado would be ideal for expats. So, I would like to target ads to the expat community.
1) I would like to purchase or rent an expat list. Do you have lists available?
2) I would like to know how to advertise on your Medellin Guru Classifieds and the cost and length of time an ad is posted?
3) Do you have any suggestions of other places to advertise to expats?
Sorry we don’t sell or rent our Medellin Guru subscriber list or permit advertising real estate in our groups on Facebook.
There are Facebook Groups where you can post real estate ads for free:
The largest is Medellin Expat, it requires you to include a price in a real estate ad – https://www.facebook.com/groups/159461177529433/
Another large one is Medellin Gringo Classified – https://www.facebook.com/groups/expatsmedellin/
Hey Jeff, I hope you are doing well. I am Ivendo sas in Oriente Antioqueño. Anything you need around here, please let me Know.