Buying A Property In Argentina
Today I accepted the seller's counter offer and bought my first property here in Buenos Aires. Assuming that there are no complications, I'll be able to move in about one month from today. I thought I'd share some of the strange quirks I experienced and let everyone know what to prepare for when they decide to buy here.
Issues With The Title
It turns out that the people who owned the apartment previously did some unauthorized modifications to the apartment -- they enclosed a large area in the rear of the property that used to be a balcony. When they did this construction, they did not get approval from either the city or the building association.
Needless to say, I was concerned about this initially. I'm buying a property that is being marketed as a 70 square meter property (about 750 square feet), when the title deed specifies that the apartment is in fact a 53 square meter apartment. I didn't want any complications down the line.
I checked with the lawyer who will be handling my closing and it turns out that it shouldn't be a problem after all. It appears that modifications made to the back of a building do not typically raise eyebrows. However, a modification to the front of a building, where it will be in plain sight of everybody, should go through the proper channels and approvals.
I was also relieved that this modification has "aged" somewhat. It was done before 2001 (when the current owners bought the property), so apparently the building association hasn't raised any fuss for the last 5 years or so. After considering all this and on the recommendation of the lawyer, I decided to go forward.
Two Types Of Closings
When you purchase an apartment, there are basically two ways to close. The first is with a "boleto" and the other is by going straight to "escritura".
The "Boleto" Process
With a boleto, you typically pay 30% of the closing price to the seller (usually to allow them to purchase a new apartment) and the notary handling the closing will hold the deed in escrow. The boleto is the point of no return. If you back out, the seller keeps your money. If the seller backs out, they have to not only return your money, but also double it to get the title back out of escrow.
Going Straight To "Escritura"
When you go straight to escritura, you accomplish everything in one transaction. You deliver the entire sum of the purchase and the seller delivers the deed directly to you. The notary, of course, supervises the transaction and ensures that everything is accomplished legally.
I decided to go straight to escritura rather than using the boleto process. Each day that I don't have an apartment is a day that I have to pay to rent one. I'd much rather move into a place of my own as quick as possible. My realtor also advised me to use the boleto as one thing that we could negotiate on. If the seller came back and asked us to use the boleto, we'd ask them not to make a much higher counter offer. Every month that I don't have an apartment costs me $1000+ in furnished rentals, so it makes sense for me to try and close quickly and also demand that the seller close quickly as well.
In addition, I've bought and sold property in the U.S. and I've always found that the longer the escrow period lasts, the more likely there are to be problems. I have no idea whether that's the case here, but all my instincts tell me to try to close as quick as possible and avoid delays, while still taking enough time to do all the proper inspections and due-dilligence, however.