 |
|
|
Argentina is different. The first point of difference is the “Listing” process. Often an agent will in effect ‘bid’ for the listing. The highest price insures getting the listing. So the price is already inflated from the beginning. An agent promising $150,000 for your property is more attractive than the one that says you could only expect $100,000. In the United States there is usually a higher price for the purpose of giving the seller negotiating room, otherwise the seller declares the price as “Firm”. From experience we expect the offer, counter-offer negotiation to reveal the actual price. We do not expect that the agent will decide whether to present our offer or not depending on what he has promised the seller, or worse on what he expects to make as a commission. I looked at a house in MeliPal a desirable suburb of Bariloche. The price for the large house with a nice view was $135,000usd. I wasn’t very interested and prepared to leave. The agent asked if we were going to buy the house. When I said NO, he went back to the seller. (He returned to me and asked if I would be interested in the house at $85,000usd, because they “HAD to sell, Now”.) The price had just become $50,000 usd better. The house was worth the lower figure but we left anyway. Contrast that deal with a small tourist business that we really wanted. The list price in the catalogue was $130,000usd. The price increased from $130,000usd to $145,000 (right after we examined the property). We offered $120K cash. We were told “No thank you”. A couple of days later as we were getting ready to leave Argentina, a friend told us that our offer had not even been presented to the owner, because the listing agent would only get half of the 6% commission, and 3% of $120,000 wasn’t enough for him. It would be good to mention at this point that buyer and seller split the standard 6% commission - so add 3% to your offer to figure out what you are actually going to pay. When an offer is accepted the Argentine process gets very different from the typical transaction in the USA. A Government Official called an Escribano is going to take over processing the agreement. An agreed upon amount plus any and all documents from the seller are given to the Escribano. The Escribano investigates the Deed and checks for tax and lien issues. Everything we expect from an Escrow Company is done by the Escribano PLUS all of the paperwork production usually done by the real estate agent in the United States. The Real estate agent shows you the property and presents the offer to the sellers agent (and then he is done for his 3%.) In every case when we looked at the property the owner had to be present, to show corners and answer any questions because the agent knew nothing about the property except basic facts (and often not even the number of bathrooms). When the Escribano issues the Government guaranteed Deed you are free of claims against the property. He will subtract for back taxes and check for any Liens. He will receive the money for the property. This is a solid process and the Escribanos are legitimate people. When they say “Hecho” it is a done deal. No one gets money until the Escribano hands you Title to your property. Still, I will always have MY Lawyer check out the details and corners etc. to make sure that I know and understand exactly What and exactly Where I am buying so that there are NO Problems later. My Lawyer has MY interests in mind so I know where the corners and property lines actually are, and local ordinances. For example in this area there are building restrictions based on construction footage per hectare(Hectare =2.47acres). You may be planning to put an addition on to a house or Hotel, or if you are buying a lot to build your dream home it would be good to know if the dream house “fits” on the property you want to buy. You want to know exactly where the corners are so there are no disputes with your neighbors in the future where a fence should go or whose tree just fell on the car. You want to know, because things that “never happen” can happen to you. If this sounds like a complicated process, that is going to cost too much. Remember the price for the property is still less than you would imagine paying (and far less than it would have sold for 3 years ago to anyone, Americano or Argentine). Check the listings and you will see that houses and property in general are an incredible value. Also remember; EVERYTHING IS FOR SALE! The house someone has just told you is the “Ancestral” home of his family for 10 generations - is FOR SALE! The ‘best’ way to buy property is to look for areas you like. Then look for houses you might want to buy in that area. Pick a few. Then send in a “spy” to talk to the owner. The spy asks if there is any possibility of selling the property. The owner ALWAYS has a price he couldn’t refuse. Now you have a negotiation started on a property that is What you want, and Where you want it. Often the first price is very reasonable. The story is; the spy has an uncle that wants to move into town. The uncle doesn’t have too much money - but is a wonderful man. Since the ‘spy’ isn’t the buyer, just the dutiful nephew, any underlying problems come easily to the surface. The spy ‘works’ the price - if this is even necessary - and gets a number. At this point, your Lawyer contacts the owner while you look at the extensive pictures the spy has taken. The Lawyer should have a good idea what the ‘real’ price should be in that area or town and he works the price as close to or under that ‘real’ price as he can finally get the actual price set. Now you can come in with the Lawyer and walk the property, if you like it, (you already know about any deficits and problems), you make your offer - which will be pretty close to the ‘set’ number. Don’t insult the owner. You want to be fair - particularly if you want to live in the house. Trying to “steal” a property will just cost you grief, exceeding the number of $$$ you can save. If you don’t like the house, move on to the next. You will like more houses than you can buy. Your savings for using this purchase system will be: inflation by agents of 10-30%, + 6% commission minus your Lawyer fees. A $100,000usd home can cost you less than $70,000usd. This is only a rough estimate - the actual savings may depend on how much you want the $65,000usd 3bed/2 bath house in a great neighborhood with a view of the lake. There is a “secret report” circulating in Bariloche. I haven’t seen it, but the Town planners have and so has my Lawyer and Bankers. It describes the future growth scenario of the Bariloche area and the Lake District in general, IF and When the “BOND DEFAULT” situation that has held the economy in a crushing grip is SETTLED. (Briefly in 2001 Argentina defaulted/missed a payment on the Bonds sold to finance the country’s debt. President Kirshner has pushed a settlement that would pay a sliding scale of 25-40% of the debt, thereby writing off approx $55 millionusd in debt. On February 25, 2005 the deal was finished, and the “External Debt” as it is called in Argentina was restructured. The deal allows Argentina access to credit again and that means there is government money for domestic use. It also means credit is available from the commercial banks for the first time in almost 4 years. Exactly how this credit and money availability will affect the availability of mortgages is not clear yet. Now comes the projected (expected)
BOOM. Bariloche’s current population of 160,000 is expected to more than
double in the next 5 years.
The Lake front areas will appreciate the most quickly, but when the demand exceeds the market supply, all real estate prices will go up. Typically this is an investor situation that takes a lot of money to ‘get in on’, but today a beautiful house with a view of the Lake and surrounding snow capped Andes Mountains can be bought for less than $100,000usd. In Colorado the lake front real estate would cost millions. Try to find a huge beautiful home on Lake Tahoe (in California) for under a $100,000. There are some very nice homes for less than $70,000usd. These are Real Estate Agency quotes, so you can do better. There are two areas that will appreciate the fastest. “The entire Bustillo corridor, 27 kilometers running from Bariloche to LLao LLao (a world class resort hotel) is going to change hands in the next 5 years”. Lake front property is always high on buyers ‘wish list’. My real estate “spy” tells me his parent’s house bought a year and a half ago has already gone up 40% in appraised value. The second area of major attraction is the “World Class” ski resort on Cerro Catedral. In ski season or “high” season the hotels, hosterias, hostels and other short term rentals are typically 120% of capacity. This means the Tourism office is calling around to people to rent out a bedroom in their private homes. During the good economic times (pre Default) it was impossible to find any accommodations within an hour of Bariloche during ski season. For a tourist site such as a ‘quality’ (4 star and up) hotel or cabin rental location close to Catedral or on the road leading to this ski resort is a guarantee of success. Note: most of the ski-crowd is from Europe and the expectations of the European ski tourists are higher than “basic rooms and services”. Many people buy their home with the thought of renting it out during this tourist “crunch time” or have an extra bedroom they can rent out as ‘guest quarters’ and making some extra euros. If you don’t ski and hate snow, you might make some serious extra cash. The rental market for 4 and 5 star accommodations is always the strongest, but the hostels with dormitory like rooms are generally full as well. Prediction are that neighboring communities like El Bolson and the communities of Lago Puelo and Epuyen in the northern part of the state of Chubut will continue to grow rapidly. The attractions are the Nacional Parque de Lago Puelo and the La Hoya ski resort. A new Casino and ski resort is already in the works for the beautiful farming community of El Bolson (which has already grown by 30% in the last 3 years). Properties in this area are still priced low, with simple homes in a quiet area and good view (a good view is almost inescapable) selling for less than $50,000usd(realtor prices;-). The “plus” here is that you can live in an incredibly beautiful place until you get an offer you can’t refuse. For the investor with less money or an eye for the future the communities of Esquel and Trevelin are available. These two towns and the smaller villages surrounding Parque Nacional de Los Alerces are predicted to appreciate as the government promotes these tourist treasures. ‘Alerces are redwood trees similar to those in California. These trees grow slowly to 45 meters or more and can live thousands of years. There are so many small lakes that some are still un-named This under-utilized Park with the charming Villa Futalaufquen actually inside the park. Starting with tourist locations and the “second home” market real estate prices are going to shoot up. Winter weather is more of a factor here. Unless you are a “winter wonderland” buff, you may be looking at this area as more of an investment than a “live year round” possibility like Bariloche, or El Bolson, which have milder weather. The real “secret” of the report is the Argentine government’s commitment to developing El Chalten and to a lesser extent El Calafate in the state of Santa Cruz. The Tourism planners are determined to make El Chalten (the access town for Cerro Fitz-Roy) “THE” climbing destination, and “THE” trekking destination for South America. El Calafate is already a major destination for glacier viewers as it is the access point for the massive Perito Moreno glacier that flows into Lago Argentino. Lago Argentino is the largest body of water in Argentina and the fishing, for both trout and land-locked salmon is remarkable. El Calafate is the jumping off spot for the 4 hour bus ride to El Chalten. You can fly directly to El Calafate. With government plans for recreational developement El Chalten will grow into a much larger resort area as adventure travelers, trekkers, and climbers come to this unique place. And that is really the point: If you can offer something unique and accessible and “safe” “THEY WILL COME” and some of “THEM” will stay - which is a formula for real estate investment that makes money. On February 25,2005 when settlement of the “External Debt” was announced money began to flow to Argentina. The Bariloche-Lake Nahuel Huapi, Lake District area will grow tremendously from San Martin de Los Andes in the north of the Lake District to El Bolson in the southern edge of the state of Rio Negro over the next 5 years or more. The Area around Parque Nacional de Los Alerces will develop rapidly. Esquel and Welsh flavored Trevelin will grow as more people discover the huge Park with the Redwood like Millennial trees, the incredibly beautiful Lakes and rivers (rumours are, that the waters are full of trout). A few people will even wander around Butch Cassidy and the Sundance Kid’s old ranch in Cholila and hear the stories of the “Banditos Americanos” being ‘alive and well’ years after their well-publicized “demise” in Bolivia. And finally the real estate investment “pot of gold” could turn out to be El Chalten in the shadows of the “Needle” Mount Fitz Roy. Adventure trekking and whitewater rafting, and trout fishing as well as climbing the difficult peak will make El Chalten an important tourist destination and an interesting place to invest. You can build beautiful buildings, but you can’t build views like this... The following are the previous articles that Doug wrote for the magazine:
To contact
Doug Click Here
|
A
Little More On Living In San Carlos de Bariloche, Argentina ~ 
