Colombian Residency Visa by Investment
By: David Steckenreiter, Medellin Real Estate Agent
We are often asked what is needed for foreigners buying real estate in Colombia. All you need is a passport, your cash in place, and a bit of patience. The process is really quite different than what North Americans are used to. One of the great things about foreigners buying Colombia real estate is that it can qualify you for a Colombian residency visa too. (See below for more details.)
There are a couple important points to remember when buying real estate in Colombia as a foreigner. The Colombian marketplace is not over-leveraged. Deals are done in cash and there is no substantial discount for paying in cash, if any. In most real estate transactions, you will see between a 3% to 8% discount in the negotiation. If you are looking for repossessions, in many cases these deals are controlled by a small group of people and, while not impossible to obtain, are very difficult to cut into this circle.
Another point that you should erase from your North American experience is the notion that if a property has been on the market for two years, you can negotiate hard and get a good deal. A Colombian will sit on a property, unless there is a really urgent need to sell, until they get what they believe it is worth. In fact, as the prices rise in the marketplace, sellers will continue to raise their own price. This is completely illogical to most foreigners, as it seems “obvious” that if they wanted to sell they would lower the price. This is a cultural view in Colombia and not something you will change.
A final note on negotiating: If you find a unit that you like but intend to rehab, do not try the tactic of saying, “Well, we have to change out all of the bathrooms and open up the kitchen, so you will need to lower your price.” Forget that! The seller will think, “I am living here and, while things might be a tad older, there is nothing wrong with the place.”
The process for buying real estate in Colombia consists of a verbal offer, the price on the deed, the amount of the deposit, how the road improvement tax will be paid (this applies to Medellin), when the Promesa de Compraventa will be signed, the deposit, and the date for the closing.
For Information on the Buying Process and Residency by Investment