Finalizing the Sale

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.

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.

Why do I need to pay a deposit?
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.

You may face a small logistical issue when needing to pay the deposit due to restrictions on the amount of money you can withdraw from a cash point in any 24 hour period.  If all else fails, it’s simply a case of visiting the cash point over the course of 2 or 3 days.

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 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.