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7 Tips for Expats Buying Property in Ecuador (Plus 7 Things to Avoid)

Posted in: Ecuador Real Estate, Living in Ecuador

Thinking about investing in the real estate market in Ecuador? In this post, Jesse Bayer of Abundant Living Ecuador, shares tips for expats buying property in Ecuador. Bio at end of post. 

Buying property in Ecuador

Check our full guide to Ecuador real estate.

7 Tips for Expats Buying Property in Ecuador

1. Set Your Parameters First

Know your preferences and narrow down locations based on your parameters:

These are some of the things you should think about and then narrow down and rule out regions based off of your answers to these questions.

Once you have identified areas that meet your parameters you can focus your search on those regions and cut out a lot of would be wasted time.

2. Due Diligence, Due Diligence, Due Diligence

There are no comps available in Ecuador and no title insurance. Attorneys and related professionals do not have the same level of fiduciary responsibility you may be used to elsewhere.

In addition, Ecuador may represent a new language, culture and business climate to what you are accustomed to.

This puts a huge onus on the due diligence process.

Hire a trusted real estate professional and attorney and make sure the I’s are dotted and T’s are crossed.

Due diligence means:

  • checking the title by requesting the ‘Certificado Simple’ from the Property Register.
  • checking the zoning and any potential restrictions on land use by requesting ‘La Linea de Fabrica’ from the Municipio.
  • checking the boundaries and ensuring the legal boundaries match the actual boundaries.
  • checking for any water or mining concessions.
Buying Ecuador property

Avenida Charles Darwin in Puerto Ayora on Santa Cruz Island, Galapagos Islands

3. Understand the Market

There are no ‘comps’ available in Ecuador. Accurate sales prices are not recorded – therefore there is no aggregate data available to help you get a sense of fair market value.

You essentially have two choices on how to go about understanding the value of property in Ecuador.

  1. Find a trusted professional who can help you understand valuation and walk you through the process.
  2. Create your own ‘database’ of comps by seeing enough properties with similar characteristics in similar areas to start to understand what constitutes value in Ecuador.

Urban Areas: If you are looking in urban areas (towns or cities) gaining a handle on valuation can be fairly straightforward. Construction and lots (small pieces of land) have a basic price per square meter depending on their characteristics and level of quality/luxury.

For example if you are looking for an apartment in a populated area, by looking at 5 apartments and calculating the price per square meter of each apartment, you will begin to understand the value of apartments in the area you are looking at. Same with lots as well as houses.

Rural Areas: For rural areas and larger pieces of land valuation can be more difficult and prices can have significantly wider margins.

Land is valued based off of traits such as: location, proximity to paved road, infrastructure such as; water, electricity, access, etc., amount of flat, quality of soil and overall utility.

Focusing on an area and checking out several properties with similar characteristics can start to give you a basic idea of price per hectare in the area you are looking at.

Once you have a handle on the market and you make an offer or come to agreement on a price, the due diligence truly begins.

Buying real estate in Ecuador

View of the city of Lloa, small town near Quito, Ecuador

4. Consider Renting Before You Buy

This tip is dependent on the personality of the individual buyer and level of commitment to Ecuador – the point is to wait to buy until you are sure that Ecuador is where you want to be. Real estate is not a liquid asset.

Editor’s note: Or at least wait to buy until you visit. It is becoming increasingly common for expats to get their residency visa and purchase property before even visiting. Here is our Expat Scouting Checklist

5. Take Your Time / Keep Digging

See as much as you can: Related to the due diligence process, it is important that you see enough property that you are confident you understand both the value and characteristics/parameters of what you are buying.

6. Work With a Professional But Oversee Your Affairs Personally

It is highly important that you work with trusted professionals in the real estate purchase process.

That being said, it is also important that you are vigilant in understanding and overseeing your affairs.

Make sure you understand everything, that it makes sense and that you are comfortable with the process.

If you have concerns, ask questions, double check, get second opinions and only move forward when you are convinced everything is on the level.

7. Do Business Like You Would Anywhere in the World

If you are buying real estate in Ecuador, you are doing business in a foreign country. This means that it is more important to ensure that you make good decisions than if you were operating in a place you are more familiar with.

I have seen too many mistakes made by foreigners being overly trusting, not doing there due diligence and getting railroaded.

Bottom line: Be shrewd in your affairs – pertinent advice for doing business anywhere in the world.
Ecuador property

7 Ways to Mess up Your Ecuador Property Purchase

Purchasing property in a foreign country can be daunting. Doing so in a language, culture, business climate and legal system that may be foreign to you can add to the challenge.

I have gone through it myself and ultimately founded Abundant Living Ecuador, a real estate and relocation services company based out of Loja, in part, to remove the stress and unknowns from the purchase and sale process.

Based on my experience here are 7 ways you can mess up your property purchase in Ecuador.

Ecuador property mistakes

View of Quito, Ecuador

1. Buying Sight Unseen

This may seem obvious and is certainly true everywhere, not just Ecuador, but buying sight unseen (depending on the specific circumstances) is a surefire way to open yourself up to the possibility of being disappointed with your purchase and potentially even defrauded.

2. Buying Prior to Being Sure Ecuador is Where You Want to Be

Ecuador is such an amazing country with so much going for it. The quality of life, cost of living, climate, air, water and soil quality are just amazing!

That being said living abroad is a big change and is certainly not for everyone. Real estate in general is not a liquid asset and in Ecuador liquidating your real estate holdings can take some time.

So make sure Ecuador is where you want to be, that you like the area you are buying in and that you are happy with the climate, culture, etc. prior to making an investment.

3. Not Understanding the Market

In Ecuador there is no aggregate data on sales prices or ‘comps’.

This means that you either are familiar enough with the market to assess market value or you are not.

If you are not, it is highly important you either spend enough time getting to know market dynamics and understanding what constitutes value, or that you work with someone professional and honest enough to properly advise you.

Ecuador expat property

Near Carolina Park, Quito Ecuador

4. Trusting Unscrupulous Actors

It could be said that sales in general sometimes can attract less than highly scrupulous people.

In Ecuador that is exaggerated by cultural differences, a potential language barrier and differences in the: purchase process, level of professionalism, due diligence process, fiduciary responsibility, etc.

It is important that you use a highly ethical and professional real estate person/attorney – get a personal recommendation, check references, vet or use any other method that works for you to select whom you work with carefully.

5. Giving a Deposit Without a Notarized Contract

Do not give a deposit based off of a verbal agreement. Any agreement you come to can be put into the form of a contract or ‘Promesa de Compraventa’ and notarized.

This makes the agreement binding, you may add penalties for non-compliance and should you be making a monetary deposit with a closing at a later date the Promesa is a mandatory step.

Ecuador property guide

Aerial view of Baños Ecuador

6. Improper Due Diligence

Your due diligence on a property purchase anywhere in the world is crucial.

In Ecuador, where there is no title insurance or comps and where you may not be familiar with the purchase process, there is even more onus placed on thorough and proper due diligence.

Basic Due Diligence: While this is too large a topic to properly handle in this post, the first step to proper due diligence is researching the title and the boundaries of the property in question.

The title is researched via the Property Register. You must get a ‘Certificado Simple’, which will show if there are any liens, encumbrances, pending legal action, etc.

Depending on the nature of the property you may also want to research the boundaries. Make sure the boundaries or meets and bounds are properly inscribed with coordinates and that they are accurate.

The boundaries are in the Escritura (Title) but older Escrituras may not have exact or even any measurements at all. In this case you must first inscribe a survey (boundary study) via an ‘Acta de Nueva Linderacion’.

It is recommended you make sure the property is not on a fault line, that its use is not restricted, that there are no immediate plans for public works projects that could affect the property, that there are no water or mining concessions, that you have legal access, etc.

Of course a good professional can assist you in this process, but very few will be as thorough as necessary. It is important you make sure the i’s are dotted and the t’s are crossed.

Ecuador property purchase

View of apartment buildings behind Parque La Carolina, Quito

7. Buying Shoddy Construction

Construction standards in Ecuador are not always up to international standards. Decisions have often been made in favor of cost savings vs. quality.

While buying a property that needs some rehab can be a good economic decision, it is important to know that the bones, including the foundation, electrical wiring, etc. were properly done.

Home inspections, which are available but not widely used, can help in this assessment, reviewing the plans when available is important as well.

Overall, the biggest advice I can give someone coming to purchase property in Ecuador is to get help – you are operating in a foreign country that you are not familiar with and things are different. Do your research on who are the trustworthy actors in the area and hire a professional with a good reputation to assist you in the process.

 

About Jesse Bayer: jesse bayer ecuadorJesse was a New York based real estate investor who relocated to Ecuador in 2013 and is now the Co-Founder and Managing partner at Abundant Living Ecuador, a Real Estate and Relocation Services Company based out of Loja. Jesse has prepared a free Ecuador Relocation Guide.

Read more about why Jesse decided to move to Loja, Ecuador.

Buying property in Ecuador tips

Aerial view of Quito, capital of Ecuador


Your Turn

Have a question for Jesse? Join him in the comments. Have a tip or lesson learned? Please share below.

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Meet the Author

Bryan Haines is co-editor of GringosAbroad - Ecuador's largest blog for expats and travelers. He is a travel blogger and content marketer. He is also co-founder of ClickLikeThis (GoPro tutorial blog) and Storyteller Travel.

19 comments… add one
  • Tom Badley Sep 26, 2020, 8:55 am

    Hi, I have some land in Ecuador purchased in 2011. Area 3820 m2
    Located approx. 3km north of Malacatos. Can you offer any advise on how I can sell the land?
    I’m a UK resident.
    Many thanks

  • Nick Pozner Aug 17, 2020, 9:01 am

    I have been planning to buy a property in Ecuador as it is really lucrative and the prices are going up. This is the reason it is a good idea for me to invest my money here to get a return.

  • Andrés Burbano May 12, 2020, 3:44 pm

    Hi there! My name Andrés Burbano a local resident of Guayaquil. I am putting both of my properties on rent or on sell. The first one is located in Torre Oceanica, Salinas in an exclusive residential condos beach complex. The second one is Isla Mocoli, the most exclusive residential community in Samborondon.
    I would like to publish my properties with you.
    My contact number is 593 999691928.

  • Juan Pablo Dávila Jun 3, 2019, 9:21 pm

    I just read your website.
    Is really good. Congratulations.
    I need to know where can I promote with you our project of country houses within a precious gated community 40 minutes from Quito.
    Kindest regards
    Juan Pablo
    0997311640

  • Mei Ling Schulz Mar 15, 2019, 11:27 pm

    Hi there,
    I’m a realtor in Miami, FL and I found out a friend of mine is looking into buying a condo in Quito. Do you have any recommendations on how to find a reliable real estate professional there or do you happen to know anyone who is?

    Thank you!

  • Rochell Standish Jan 9, 2019, 12:34 pm

    My husband and I are interested in retiring to Ecuador (several years down the road). How difficult is it to find rural properties? We now have horses, chickens, cows, etc. on 20 acres and would like to continue our hobby farm life–on a smaller scale. Thanks!

    • Vlad May 17, 2019, 6:54 pm

      Saludos
      Por si les interesa un terreno en el sector del plateado es un lugar comodo para vivir y creo que va a sus espectativas.

      Saludos desde Ecuador

    • Carlos Bucheli Jan 13, 2020, 11:08 pm

      Hi Rochelle,
      My father has a beautiful 4 hectare fam or about 40 thousand mt2 size. Located in Tababela.
      The house farm has 5 bedrooms, 3 living rooms, formal dining room, 3 bathrooms, with all services such as water, electricity, teléfono, internet. It has access to paved roads and the location is perfect since the airport is very close by. It also has a large gazebo with old fashion bread oven for cooking and entertainment. The Property has been in the family for 45 years and we have been talking in puttin it for sale soon. The land is flat so for new projects or business investing could be very good. There are many farms around the area that grow famous Ecuadorian flowers for export.
      For more information or pictures send me an email
      Thanks
      Carlos Bucheli

  • Michael Sep 27, 2018, 9:15 am

    Found the article and comments tips useful. I am in the process of buying a condo in Quito which I won’t plan on moving to in a few years but want to rent out. I want to hire a management company to deal with property as I will be out of the country. So far only finding that there are brokerage services to find and renter but not manage beyond that and it’s to painful to be a remote landlord. The target building’s property management doesnt provide full service. I’m being told that there aren’t full service property management companies..is this true?

    • Jesse Sep 27, 2018, 11:38 pm

      Hi, so we offer Property Management here in Loja, unfortunately I don’t know of a company I can recommend in Quito, would certainly think there are companies there. Sorry I couldn’t be of more help.

  • Jean Jun 26, 2018, 5:29 am

    Jesse – can an expat leave their property to their heirs or do property rights terminate upon their death?

    • Jesse Sep 27, 2018, 11:40 pm

      Hi, yes absolutely, you can leave property to your heirs, same as an Ecuadorian National, there are no differences under the law in that regard. Hope that helps.

  • Patrick Apr 26, 2018, 11:35 am

    Hi Rob,
    Thank very much for your tips. They are very heplful.
    AJ mentioned having a lot for sale.
    I am interested in buying a lot.
    Can you refer AJ my email so we can do business.
    Thanks
    Patrick
    e

  • Dan Apr 19, 2018, 3:16 pm

    I am in the 6th month of a two year rental. When the rental agreement was signed the landlord stated she had no intention of ever selling the house. Now she is planning to sell. Should I start ooking for a new home? What are my rights, if any?
    Thanks,

    • Jesse Apr 20, 2018, 4:28 am

      Hi, I recommend you consult with a good real estate attorney regarding your legal rights. That being said, your lease contract is a good place to start to review the terms of your agreement as it relates to access to ‘show’ the property, length of lease, etc.

  • AJ Mar 20, 2018, 2:46 pm

    We own a lot in Ecuador and wish to sell it. Any advice on this would be greatly appreciated.

  • AJ Mar 20, 2018, 2:41 pm

    We bought a lot in a development a few years ago intending to build a house and move to Ecuador. However, our plans have changed and we now wish to sell our lot. Can you give us some advice about this?

  • Rob Lamontagne Mar 15, 2018, 1:22 pm

    Great article. So other tips for buying property in Ecuador:

    1. Consider buying a used property FURNISHED! We got a great deal on a property, but had to furnish it. Appliances and furniture in Ecuador are much more expensive than in Canada or the U.S.. Having to furnish the unit was added 35% to the cost.

    2. Financing is almost impossible for a foreigner in Ecuador. Consider financing your purchase with a home equity line of credit on your principal residence in Canada or the U.S.

    3. Plan your purchase BEFORE you want to move or snowbird in Ecuador. If you buy your property 7 to 10 years BEFORE you move, you can set it up with rental property management and have it pay for itself over that time. That may sound like a long time in the planning, but most of us have an idea when we want to retire. Planning ahead can pay back big time!

    4. If you plan to move to Ecuador, then any type of accommodation can work. But if you are going to be a snowbird, spending your winters in a warmer climate, consider buying into a managed property. Empty single houses can be targets for vandalism and squatters. Gated communities and condo complexes are managed, providing security and protection for your property. In addition, many of these types of complexes have rental property management in place, to help rent out your unit when you are not there.

    Have a wonderful day!
    Rob

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