Buying a Home in Nicaragua, Part IV
Buyer Beware: Attorneys and Agents
When buying house in Nicaragua, it is important to be informed and cautious. It is vital to have good legal representation. Also, try to find some information on the real estate agent and the company showing the property. As a gringo, even the best attorneys and agents will try to take advantage of you. Trust BUT verify.
My lawyer came highly recommended from a close friend of mine who held a position of reverence and power in León. The lawyer initially quoted me a fee of $2000. At the time, I didn’t flinch, I have always heard that attorneys are very expensive in Nicaragua. I later spoke with my friend and another acquaintance, only to find out that his services shouldn’t cost me more than $700. After a phone call from my powerful friend, my attorney called me to explain that I must have misunderstood him. I didn’t buy his bullshit. (He’s been squeaky clean since, even offering extra services at no charge.)
At a one meeting, the homeowner and her lawyer presented a deed with issues. I overheard her attorney offer my attorney $1000 to let “the gringo” sign the documents, to push the transaction through. “Let him deal with it later.” My attorney courteously told him to go “fuck himself.”
Real Estate Agents
Real estate agents can be shady as well. I have found that commission rates can vary drastically. The average commission rate seems to be about 3%-5%. I have dealt with agencies that charge as much as 11%. These fees are the sellers problem, not the buyers. So why should I care?
I have found that the properties that they show are more expensive to account for the higher fees. The sellers are also less likely to negotiate. Having said that, a couple of the advantages that these companies offer are native English speakers, lawyers, and title clearance. For example, I spoke with a lady who was selling her house in the neighborhood I was searching in. She has had it on the market for a while and told me the sale price. The next week she signed with a particular agencies. The sales agent showed me the house — it was listed for almost forty-thousand dollars more than the price she quoted me.
Another issue that I faced when dealing with sales agents, is lying about the sales price. On a couple of occasions, I have viewed the same homes with different agents. The agents lied about the sales price to fatten their commissions. Another example of where being a “gringo” can cost you. When negotiating a sales price, I recommend dealing directly with the seller of the property. This will eliminate any inconsistencies.
I advise dealing with an attorney and real estate agency, finding one you can wholly trust, can be a challenge. I don’t recommend contacting the seller directly to purchase, this can lead to a number of problems. I have come across a few houses that were “in litigation” because the paperwork was not in order. Someone bought the house, and now they were probably going to lose it because the deed was not proper. Some homeowners falsify documents to push a sale through. CAVEAT EMPTOR!
Have you had similar issues? Let me know in the comments.