Finalizing the Sale

1. How can LUHO help with the process?
2. How can I verify real estate records and sales contracts?
3. What is a real estate pre-purchase agreement?
4. Why do I need to pay a deposit?
5. When and how do I sign the final sales contract?


1. How can LUHO help with the process?

LUHO real estate was formed by an Australian and a North American who have over 6 years of experience in Colombia. We can help our members in getting established in Colombia, easily and efficiently, by providing all the information, resources and contacts needed to quickly and easily start the buying process in Colombia.

You will receive the best advice on legal and tax issues from our attorneys, assistance with relocation, visas, and bank accounts, and guidance on the proper process and regulations to transfer money and other assets.

With our service you can be confident that your buying process will be trouble-free and smooth.


2. How can I verify real estate records and sales contracts?

You can hire a lawyer to authenticate the existing real estate records and the contract between you and the seller. Regardless, this process will end in the local notary so unlike many other parts of the world, it’s not entirely necessary and certainly not the law to hire a lawyer.

The agent should ensure that the following documents are in order:

a) The property’s ownership history
b) The property’s tax history

a) The property’s ownership history
The property’s ownership history and a no-lien certificate (Certificado de tradición y libertad), which should date back no more than one month, includes the property’s real estate registration number, owner’s name, and the property’s record summary.

Requests for the ownership history and no-lien certificate can be made at the local Government’s records office (Oficina de Registro de Instrumentos Públicos) in the area where the property is located. The certificate costs about 10.000 pesos ($5 US dollars).

b) The property’s tax history
Requests for an account statement of the property can be made from the treasury office (Oficina de Catastro) of the city or district where the property is located.

At LUHO our agents are well versed with the process, and we have the best possible lawyers to guide you through rules and regulations of Colombia, so you can be confident that your purchase will go smoothly.


3. What is a real estate pre-purchase agreement?

Once you have made an offer, the offer has been accepted and you are content that the property’s documentation is in order, a preliminary contract is written by your agent.

This contract forms the basis upon which the final contract is written. For example, if you wish to negotiate the inclusion of furniture or domestic appliances into the sales price, this should be included into the pre-purchase agreement.

The pre-purchase agreement also details a timeframe within which the final contract must be signed and full payment given to the seller. The pre-purchase agreement should also specify a penalty clause in the case that either the buyer or seller breaks the agreement.


4. Why do I need to pay a deposit?

With a deposit the seller agrees not to show or sell the property to anyone till the closing id done. Sometimes the deposit is the same amount as the penalty clause specified in the pre-purchase agreement. Or, it might just be 2% of the property’s agreed sales price.

Clearly, if the penalty clause or deposit received is too low, there is a greater chance that either the buyer or the seller will back out of the deal before signing the final sales contract because the consequences will not be very significant.


5. When and how do I sign the final sales contract?

Once the pre-purchase agreement is signed and you are in a position to pay for the property (i.e. you have opened a bank account in Colombia and transferred the necessary sum of money) you can go to the notary and sign the final sales contract.

Generally, the seller, the buyer, lawyer, and the agent will all attend the notary together, though it is not absolutely essential.

The only documentation you need to take is your passport.

You will need to be ready to pay the seller, probably using a cheque obtained from your bank in Colombia (unless some other payment method has been agreed). Both the seller and buyer will pay the necessary taxes and sign and fingerprint various documents.

Approximately two weeks later you will need to go back to the notary to collect the updated deeds on the property. If you hire a lawyer, this will be done by your lawyer.