IMPORTANT INFORMATION IN RETIREMENT LIVING FOR FOREIGN REAL ESTATE INVESTORS and RETIRED EXPATS IN ECUADOR.
Advice to avoid scams and dishonest real estate practices in Ecuador.
First and foremost, welcome to Ecuador, a very good place for real estate investments and for retirement living!
Investing in Ecuador Real Estate is being promoted for retirement living and investment by several Web sites with a high number of visitors. As a part of the service we provide to our member brokers, we monitor these sites constantly and find disturbing information contained in some of them, including some outright lies regarding brokers, commissions and legal matters.
One very popular site says there are no real estate brokers in
Ecuador. Our existence and that of sister organizations in other provinces of
Ecuador belies that claim. Not only are there real estate brokers, but we have a
law and a code of ethics that govern our activities. Legal real estate brokers are licenced after
completing satisfactorily an extensive course. They have to take an oath to
respect the law and
abide by the code of ethics.
Unlicenced brokers or agents promoted by several Web sites and other media don't abide either by the
law or a code of ethics.
Another site states that "In Ecuador sellers don't pay
commission, so it has to be paid by the buyer". The law fixes the
commission the seller has to pay the broker at a limit of 6%, being the
usual between 4 and 5%, so the gullible customers of the network of unlicenced
brokers that Web site
provides, who present themselves as "buyer's agents", are actually paying an extra 5% (which is the commission they have
fixed), giving those illegal brokers an also illegal fee of up to 11%!
Customers do have rights in Ecuador, but if they are willing to be fooled, there
is little that can be done.
Buyer agent's commissions are not illegal in themselves, but then the broker or agent
has to forfeit the seller's commission. It is not legal to receive commission
from both parties, as one can't represent both interests.
Another site says they are not promoters but that they search
for opportunities and take "real estate tours" to see several options.
They do give the customers a tour, in which they avoid properties by legally
recognized brokers and end up pushing resorts in which they
have interests, and also pushing real estate in a mountain city where the have
consigned several properties from which they will earn a double commission, from
the seller and the buyer.
One of those operators has recently been sued by a former customer, as an
apartment in a condo she promoted was purchased, but the buyer could not get
title to the property as it was a scam. Unfortunately for that customer,
Ecuador's legal system is slow and corrupt, so the chances of recovering their
money are slim. The best way to avoid a problem like this is to work only with
Ecuadorian licenced real estate brokers!
A site promotes remote mountain or beach houses for reitrees who plan to spend part of their time in Ecuador. That is a big mistake, as an empty house in a remote location, and even in an urban area, will most certainly be burglarized if it appears abandoned. And that will happen anywhere in the World, not just in Ecuador. For part time residents, a condominium with security is the best investment. If you plan to move permanently to Ecuador, then a remote house may be a good investment, depending on the transportation and utilities facilities in the area.
Customers usually find out the truth about those scammers once
it's too late, and as tourists, there is little that can be done to recoup a
loss.
The fooled "customers" usually find it impossible to "close"
on their "property" because of several reasons. One may be migratory
status (although it is not illegal for tourists to own property); another may be that the property doesn't belong to the "seller";
yet another may be that the property is communal land, so the buyer has to become a
member of the commune. This is like a New York Coop, where you don't
"own" your apartment but do have certain rights within the laws of the
Coop. (If they grant you the priviledge of accepting your membership).
Title Insurance. The latest scam detected is one related to
title insurance, and it involves a big international corporation, or at least
one that appears to be one. In Ecuador, once you have your Certificate from the
Property Registrar, that is all the title you need. Insurance is not needed
because the history of the property is stated clearly in the Certificate. If the
property has no clear title, it will be clearly stated in the Certificate.
The title insurance many local promoters are pushing costs several thousand
dollars. That company purports to insure the customer against fraud in foreign
countries, payable to you in your own country. Of course, anyone is free to do
business as they please, so you may contract that unnecessary insurance, but
then, may we suggest you get statistics of claims honored from the government
agency that regulates those companies?
In Ecuador, as anywhere else in the World, you will find honest and dishonest people. Our Association strives to keep the real estate market in honest ground, so we ask that you seek the advice of local professional real estate brokers. In that line, we ask that you shy away from illegal brokers, even if they are "nice expats". If they don't have an Ecuadorian broker's licence they are acting illegally and knowingly breaking the law.
We have a list of active registered real estate brokers in this Web site. We sincerily recommend you use one of them for any transaction you carry out in Guayas and the newly created Santa Elena province. For the members of our sister organizations in other provinces, search for their Web sites with the words: "corredores de bienes raices provincia de (the name of the province here)".
All licenced real estate brokers have a physical licence issued by us. Make sure the one you contact shows you his/her licence and consult our list to ascertain its validity. Several Agents may work under a Broker's licence, so be sure the boss has his/hers in the active list.
A practice that has been implemented by some who work illegally is to become "Real Estate Consultants". They are as illegal as unlicenced brokers.
Should you have a problem with either one of our members or an illegal "broker", please let us know. In the case of one of our members, we will help you. In the case of an illegal "broker" we will try to help you, but as you have selected to be deceived, it will be very difficult to obtain positive results.
Ecuador Multiple Listing Service.
As of this writing, there is no official MLS in Ecuador. Several Web sites are
promoting their own private listings but dishonestly saying they are MLS. They
are in no sense real MULTIPLE LISTINGS but rather private listings that promote
the properties the sponsors have a stake in.
So
far, all listings in Ecuador are private, run by individuals or real estate
companies. We strongly suggest you only use the property listings that belong to an
ecuadorian licenced real estate broker or a reputable company or franchise with licenced
brokers and agents.
This page covers information for
REAL ESTATE INVESTORS IN ECUADOR
EXPATS IN ECUADOR
BUYING REAL ESTATE IN ECUADOR
SCAMS IN ECUADOR REAL ESTATE
DISHONES PRACTICES IN REAL ESTATE IN ECUADOR