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Wednesday, July 18, 2012

Real Estate

July 19, 2012. 

That didn't take long.  Within hours of publishing the following article, my 'nemisis', who's posted several comments in the past, sent me a message accusing me of doing what he/she has complained about before...that I am writing as if things in the USA are superior than here in EC.  I also got the following comment from someone..."Ugly American"....which I deleted as I will not tolerate disrespect in this column.

If you're looking for a bit of entertainment, check out the comments that follow at the bottom of this post.

PS...thank you to many of you who've sent me positive comments, noting you appreciate my reality writing style.  Many of you have stated you prefer hearing the good, the bad, and the inbetween so, if you should visit, you will arrive with an eyes-wide-open, informed mindset versus visions of rose-lined streets, rainbows, and busses that spew nothing but lavender-scented butterflies.



July 18, 2012

Well, I have a chicken in the oven with garlic and black pepper and a VOJ (vodka orange juice) at my side.  I'm ready to write about my next subject matter....real estate.  Or, 'real state' as they seem to call it here.

In my last entry where I blurted out a bunch of miscellaneous observations about life here in Cuenca, I focused a bit (a BIT) on real estate listings.   This time, I'm going to FOCUS on the whole matter of buying and selling real estate here in Ecuador...well....at least Cuenca.

As I've mentioned before, there is no such thing as an MLS here.  In the USA, the MLS is a single database where all properties for sale, unless For Sale By Owner (FSBO), are listed.   As a result, people buying or selling have access to everything available on the market.   Not here and, apparently, not in many countries either.

Let's say there are 500 properties for sale in Cuenca.   If a person wants to buy a property, they are faced with:
  • Going from agency to agency, website to website, to piecemeal a very small percentage of properties together to find what they want.
    • Website XYZ who has 11 listings, though it is common the websites are not kept current, therefore some of the listings could have been sold a year ago.
    • Website ABC who has 59 listings.
      • As I mentioned last time, the listings are very often sorely lacking in information, too.
        • WHERE is the house? 
          • I will skp over a listing if it doesn't tell me where it is.  I'm not going to waste my time calling an agent just to find out the house is in Timbuktu which is nowhere near where I want to be.
        • WHAT does the house look like?
        • How many square feet (square meters)?
        • How many bedrooms/bathrooms?
    • Website LMN who has 37 listings.
  • No sign posts out front of the house with info sheets.  
  • Se Vende (For Sale) signs in the upper windows of a house with a phone number...nothing else.  No price, no square footage...# of bedrooms/baths...forget it.
  • Property descriptions ripe for 'The Tonight Show with Jay Leno' monologue.
    • Walking closets.  Really?   Where do they go?
    • 2 car parking garage.  Reality?  2 spaces in front of the house with one car butted up against the front door.  No garage door.  No roof overhead.
    • Fireplace.   98% of all fireplaces in EC are for cosmetic purposes only.  They are NOT functional...they are dead-ends.
    • Dining rooms.  Really?  That table of four, 3 feet away from the kitchen counter is a dining room?

As a seller, it's whole different ball of wax.   The seller is essentially reliant upon one single source of exposure....his/her agents' website.   It is all too common for agents to post the listing on their website, then sit back and wait for 'the call'.   Granted, the agent is also keeping his/her eyes and ears out for anyone, who might mention the desire for a property closely matching what he/she has in their inventory, while mixing in social circles and the like.   Rarely, does the seller agent pay for advertising in medias such as the newspaper or magazines or expend much energy on promoting the property via other means such as flyers posted at expat hangouts, or even free classifieds.  Holding an open house....huh???   Relying 90% on the traffic, what little there might be, that comes to their website can mean a lonnnnnng wait for the seller to get thier house sold.   It is not uncommon to see properties for sale, listed on websites for a year or more.

Then there's one of my favorites....different prices for the same property.   I went to see an apartment a few days ago.  The owners were there and said the price was $61,200.   The next day, I saw it advertised for $58,000.    An agent friend of mine has a swell hacienda listed for $158K, but on another site it is priced at nearly $40K more!!   Why?  Because there's no centralized source for the data.  So, if a seller changes their price, it isn't changed in ONE place to which all people access...they have to inform each and every agent and expect they update their website accordingly.

Other differences:
  • People who sell real estate here, do not need to be licensed.
  • There is no such thing as Escrow companies.
  • There is no such thing as Title companies.

Commissions.  This subject gets my goat.   Again, no standardization.   I have never believed in percentage-based commissions...here, or anywhere.   I have a lot of real estate agent friends and I'm sure they will get their voodoo doll out and start sticking pins in it after what I have to say.

Why should an agent make $6,000 on a $100,000 sale and make $18,000 on a $300,000 sale when they have to (pretty much) do the exact same thing for both sales?  It's like my beef about property taxes....why should I pay $5,000 a year, being a single person, for a house which happens to be more valuable than the exact same house located in a cheaper neighborhood that houses a family of 5 (3 kids in school) that only pays $3,000  a year but uses MORE of the city services (ie; schools, police, streets, lighting) than I do as ONE person?

ARRRRGGGHHHH!!!!

Here, commissions are very confusing and not at ALL standardized.   At one agency, the seller may be charged 3% commision and the buyer 3%.  At another, the seller may be charged 6% commision (standard in the USA) but, secretly, the buyers agent also charges their client 3%.  In my oh-so-humble opinion, each party should pay their respective representative a fee for the services they provide.  Why should the seller get stuck with the whole thing?  Obviously, the commission 'structure' (word used lightly) is fashioned after the USA, but that's all there is in common.  The agents may make the same amount of commission percentage as an agent in the USA, but what they do for what they get is entirely different.   Here, they don't hold open houses, nor do they invest in advertising, install signposts and keep flyers stocked, oversee inspections, follow through on contingencies, create documentation (ie; purchase/sale agreement), coordinate closings, or even (in some cases) conduct negotiations (ie; offers/counteroffers).

Note:  There is very little in the way of consumer-protection laws in EC.  In this example, there are NO disclosure requirements to inform the consumer of who is getting paid what, and by whom.

Then there's TERRITORY.   I'm not talking about the land itself, I'm talking about 'agent territory'.  I did a little test once (I was bored).   I asked 3 different agents to show me properties available in Cuenca with XYZ criteria.   In all 3 cases, the agents showed me ONLY their listings...as if there were no other properties in Cuenca meeting the criteria I specified.   Typically, agents will only show their inventory even though, clearly, there are other properties matching their customers' criteria but because they are with other agencies, they will not show them.    Even though they still stand to make a commission!!!!  To me, this is a terrible dis-service to the customer.

Then, there's ACCESS.   There is no such thing as lockboxes here.   If an agent wants to show a property to a client, they must contact the owner (or other agent representing them) and arrange a time they can mutually meet at the property.   This can be a nightmare to arrange...when the buyers agent, the buyer, and the seller can all be available at the SAME time to access the property.  What a waste of time for the seller side to have someone show up and the buyer spend 5 minutes at the property and say 'Nope, not what I'm looking for'.

Then, there's the SERVICES the 'agents' provide.  This is extremely frustrating.   It's like there's a laundry lists of tasks that need to be done relating to a sale of a property.   One agent might perform items 1, 3, 12, 19, and 27.  Another agent might perform 1, 2, 3, 5, 9, 13, and 17.   Again, no standardization.  That old routine of 'who's on first', 'what's on second', and 'I dunno who's on third' becomes all too familar.

Because there's no escrow or title company services here, one generally has to employ the services of an attorney (MY favorite!!!).   They will check public records to ensure there are no outstanding liens.  They will draw up the papers that say something about promising to buy.   Everyone signs, then off to the Notary to get everything rubber-stamped and pay fees.   Money is transfered either by check, or by stacks of cash, or by electronic transfer bank account to bank account.   Papers are filed with an agency who transfers the ownership.   You're done.   No appraisal conducted, no pest inspection, no title policy....nada.

Oh, by the way...I sold my house!!!  Now, don't go freaking out on me (Mom)!!!!   heh heh heh...this is a test to see whether my Mom really reads my blogs!!!   Yes, I sold my house to a lovely couple from NY state.   I needed a new project to keep myself busy since I was done with my remodel and left with little to do....to the house, anyway.    Now, I plan to become a renter and, NO, I'm not leaving CUE or EC.   My plans are to do a little investing and maybe buy a small apartment to rent out to you folks who may travel to Cuenca someday and/or explore the possibility of relocating here and need a short-term rental while here but with more of a 'homey' feel than just a bed in a hotel.

YEA.....oven timer just went off!!!  Garlic chicken...here I come!

Dano

25 comments:

  1. It totally amazes me how the folks in South America were busy building cathedrals, while North Americans were still living in mud huts. Granted; real estate transactions are handled differently here than in your previous home town - but so what? That is the way things are done here and it has worked out well for the locals for a long time. As someone (wish I had thought of it) mentioned in an earlier post - you might be happier living somewhere else!

    ReplyDelete
    Replies
    1. Thanks for the invitation to leave, but I'm very content living here. ;=) As I've mentioned many, many times before, these are simply my OBSERVATIONS. As with any town, any culture, any country, any planet, anywhere...there are always opportunities to modify the way things are done.

      We (and by that, I mean humans no matter what their gender, race, culture, or native status) change all the time. If we didn't, real estate wouldn't be sold here utilizing the internet...they'd still be using word of mouth.

      Delete
    2. I didn't ask you to leave - read my words again - I just commented that maybe you aren't so happy with our system here and that you may be happier somewhere else. You continue to use the "OBSERVATIONS" excuse, but in reality you are actually saying that your "old" system is superior to ours. In future posts, please drop the "my old system is better than this one" and maybe I'll get off your case!

      Delete
    3. Oi Vey. I don't know why I bother to respond to some of these comments. You are making presumptions and reading into my words what YOU think is behind my writings. I am writing about differences between what I've experienced in other places and the place I am now. Many of them are good things...but I don't seem to get any credit for that. No matter where a person is FROM or where a person happens to be at this moment, it is human nature to notice the differences. That is all I am writing about...the differences. Some people will think they are better here, some will think they are better there...wherever 'there' happens to be. It may not even be where they're from. They could be from Australia, but lived awhile in England, but now live in Peru...but think some particular aspect of life in England seem to function better overall than the counterpart in Australia or Peru.

      The point is, who gives a rip WHERE you are from, WHAT your nationality is, or where you LIVE NOW. An idea is an idea...either it has merit or it doesn't.

      If a scientist from the tiny country of East Schmaglina lands on the shores of Krakoliptia and says 'hey, I have a great idea for growing crops in dust'...should the people of Krakoliptia tell the person to 'eff off....you're not from here...you're not allowed to convey ideas unless you're FROM here'. 'Take your superior attitude and go back where you came from'.

      If a person was born and raised in one country, but spent the last 10 years living in another country, then comes 'home' to his/her original country and writes about their experiences and observations of how the two countries differ in certain areas...is it okay because he/she is from this country, but not okay if they write the same thing while in their 'host' country? That's sheer stupidity.

      I did not say EC SHOULD have title companies. I did not say EC SHOULD have escrow services. I did not say EC SHOULD have an MLS. I did not say EC SHOULD post signposts with flyers out front of the property. I did not say EC SHOULD redefine what a garage means. I did not say EC SHOULD build fireplaces that actually work.

      Could things be done better in certain aspects? Certainly!! But, in no way am I saying (or said) they should be done the USA way. After all, I (and a lot of others) LEFT THE USA because of lot of the stupid-ass ways things are done there!!!

      And while I'm at it, get off my case about being a 'guest' in my 'host' country!! I didn't barge in here and start telling everyone how to do things. I totally respect this country, the people, and the way many things are done here. No place is perfect and no place is immune to fresh ideas. The notion that only the natives are allowed to have ideas and implement changes is absurd. If that were the qualification for the right to convey ideas, then only the native North American Indians would have any right to express anything about the USA...the rest of us would have to keep our traps shut. After all, we're 'guests' in the USA and the Native Americans are our 'hosts'.

      Delete
  2. This comment has been removed by a blog administrator.

    ReplyDelete
  3. I, for one apprciate a realistic view of what to expect if you're planning to move or even visit. Knowing it ahead of time can adjust expectations and prevent someone from becoming that ugly american when things don't go like they are use to. I enjoy your blog Dan and if I do get the opportunity to retire to Ecuador I'll know some of the things to expect.

    Thanks,
    Laurie/Minnesota

    ReplyDelete
  4. Kenny and GloriaJuly 20, 2012 at 8:16 AM

    We've always appreciated your views and your writing style. Keep it up. By the way, congrats on selling your house - we're happy for you!

    ReplyDelete
  5. This comment has been removed by a blog administrator.

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  6. Have you sold your house in Bremerton?

    ReplyDelete
  7. Dano, keep up the good work. You're doing many people a real service by telling them the way things are really done in Ecuador. If they don't like it they don't have to come.(Your information saves everyone involved a lot of hassle.)They're barely (not even one generation) removed from being third world. President Corea knows Ecuador must change. Imagine what Ecuador was like when he was growing up. If anyone is about change, it's him. Ask any university student anywhere if they want to keep things the way they are now OR change??? Traditions remain BUT things change, that's life. Wait till the college students' parents (the present day beaucrats who do things the LONG way to protect their jobs) retire and their children take over. Change is coming with the President Correa's blessing. I'm going to stop now because I could write 20+ more paragraphs. Would love to chat more over a couple of cold ones when I get down there. Hopefully our house will sell soon. Steve from South of Zero

    ReplyDelete
  8. Hello Dano in EC, I am Ecuadorian, who lived in U.S. grand part of my life, I went to school etc., I had a boyfriend like You, complain and complain all the time, I loved him dearly but like U nothing make him happy, finally I quit him, try to understand this is not United Stated, the President they have today try super hard and almost imposible to changed his people, but takes alot work and time to do it, and the same time is better the way how it is handle today because we no wanted to be like U.S too expense, and complicated, relax, enjoy, be happy, life is too short and find someone to share you life.

    ReplyDelete
    Replies
    1. Let me make something clear. I am NOT complaining. I am merely pointing out differences between where I live now and where I used to live. I love it here. I am NOT unhappy. I do NOT want EC to be like the United States. I moved FROM the United States because of the many things I dislike there. Why, then, would I want EC to be like the USA? Find someone to share my life....what does that have to do with anything? LOL!!!

      Delete
    2. You sound like a sad lonely man Dan, hopefully you find a mate one day. The fur ball is not going to quite cut it. Sorry no insult intended.

      Delete
  9. Dano,
    I had sent my email to you before having an opportunity to read your comment section from your last observational post.
    I had thought you had found someone to share your life with. ( the fur ball )

    The only question I have.... at the end of the day.... with everyones opinions stated is this:
    How'd the Garlic Chicken turn out ? < BSEG>
    Stay Well,
    Neil from MN.

    ReplyDelete
  10. Hey Dano, I think most people get it. Thanks and keep up the great posts!

    ReplyDelete
  11. Hi Dano,
    Kevin and Renee from North Carolina here--please don't change! We love your sense of humor and
    the way you express your "observations". We appreciate all the information we can get on Ecuador
    and we look forward to meeting you next year (February 2013) when we make our first trip to
    Cuenca. Know of any place we can stay for a two weeks?

    ReplyDelete
  12. Dan, you suck. Kidding. I enjoy your blog too. Mark here :)

    ReplyDelete
  13. You have a witty writing style, and I 'get it.'

    I think you are funny and one day soon hubs and I are relocating to the coast (Bahia). Not to the dry as a bone desert Salinas (LOL), and even though I didn't agree with your observations quite like you about Salinas (I have friends there!), I did laugh my butt off when I read that post. Same with many of your other posts. GREAT reading, brought a smile to my face.

    You keep writing, I'll keep reading, and laughing.
    Tami

    ReplyDelete
  14. Always fun to see how uptight some folks are over simple words Dano. I take the spirit of your blog on face value and don't read any negativity into it. Half the fun of comparing EC to other places is finding humor in it...Don't lose your slant on life; you've got a really entertaining blog and I like it mucho! Bill

    ReplyDelete
  15. Hi Dano,
    Bob and Joy from Louisiana. We enjoy reading your blog. Thanks for providing the "observations." They are helpful to anyone considering a trip to Ecuador. Like Kevin and Renee we are planning a visit to Cuenca in February 2013. It would be great to meet you (and perhaps Kevin and Renee) and to learn more about living in Ecuador. Having someone who knows the area to show US around and to provide advise would be well worth the cost (as long as we don't have to pay an additional $200 for utilities). Take care.

    ReplyDelete
  16. Hi Dano,
    Bob and Joy from Louisiana. We enjoy reading your blog. Thanks for providing the "observations." They are helpful to anyone considering a trip to Ecuador. Like Kevin and Renee we are planning a visit to Cuenca in February 2013. It would be great to meet you (and perhaps Kevin and Renee) and to learn more about living in Ecuador. Having someone who knows the area to show US around and to provide advise would be well worth the cost (as long as we don't have to pay an additional $200 for utilities). Take care.

    ReplyDelete
  17. House sold! New project ahead!
    And a rental for my future use.
    All good!

    ReplyDelete
  18. Hi Dano,
    I read your entire two year long blogs, really enjoyed it and appreciated your work. hope to meet up one day soon
    Suta

    ReplyDelete

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About Me

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Cuenca, Azuay, Ecuador
This is all about my transition from an American lifestyle and culture to my newest adventure, life in Cuenca and greater Ecuador. I'll be recapping some of my day-to-day experiences (and mishaps) to highlight what it's like to live here.

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