When buying land in Colombia, land investors need to protect themselves from scammers. The vast majority of land purchases in Colombia go through without any problems whatsoever. For example, here is a step by step process of how the land purchase process works in Colombia. As you can see it’s not that complex.
However, in all countries around the world there are bad actors lurking in the dark corners looking to take advantage of people who might not know all of the rules of the land purchase process.
Not only do foreign land investors sometimes get taken advantage of by scammers, but sometimes the land investor themselves are the ones who make a mistake which could cause an obstacle during the land purchase process.
Therefore, in this post, we want to take a moment and walk you through some of the most common scams as well as mistakes people make when buying land in Colombia.
Buying land in Colombia
In Colombia, as in all countries, there are reports of real estate fraud reported every year. Essentially, scammers use use a wide techniques to defraud people. Fraud strategies range from basic to very complex. In this post we’ll teach you how to ensure you don’t become a victim to real estate fraud in Colombia.
As mentioned in previous posts over on our land investing blog, when buying any type of property in Colombia, whether it’s a house, apartment or land, you should carefully review the information you have at hand to ensure that everything checks out.
The most common mistakes when buying real estate in Colombia
When searching for land in Colombia you must ensure that it is suitable for your desired work or trade, because in Colombia and according to territorial planning requirements, there may be some restrictions in certain types of spaces.
For example, of this is buying a land in an area where one cannot perform livestock work, and buying it with the intention of performing this type of trade, or buying property to build a twenty floor building, and doing so in an area where one can only build buildings with a height that does not exceed five floors.
That is is why one of the recommendations is to analyze whether the property meets all your requirements before you start the purchase process.
Once these requirements are verified, the next step will be to investigate the price of the property or land. You should do this to make sure you are getting a fair price.
To do this you can use both cadastral and commercial appraisals, or conduct a survey in the area comparing the price of the property you want to buy in relation to other properties in the area that have similar characteristics. This helps stop you from using your emotions when buying land in a foreign country. Buying land overseas is exciting, but you don’t want to make mistakes due to the euphoria of the moment.
We have an entire post which looks at the issue of the average cost of land in Colombia / hectare which should help ground your thinking.
After analyzing all these variables, the next step is to analyze, in detail, the legal side of the transaction. For example, you’ll need to inquire about the property titles and the legal status of the property before starting the purchase. This is one of the most important steps to help you avoid being taken advantage of by scammers. Most of them take advantage of the fact that not all foreigners know how to study, verify and triple check the validity of land titles.
There are times when there will be multiple owners of a piece of land in Colombia. Sometimes own owner will try to sell the land without the consent of the other owner. They will do this by forging the signature of the other owner. Often these properties are owned within a marriage or they are properties which belong to multiple members of a family. When selling a property in Colombia, the seller will need to have authorization from all owners in order to ensure the transaction is valid. This is why it’s important to verify ownership history during your due diligence process. It’s also important to ensure there is no lien certificate against the property. This is why it is important to do a thorough investigation of both the property as well as the owners during the land purchase process.
Impersonation or identity theft
In Colombia, there are also cases where a person might pretend to be the owner of a property in order to sell it. To do this, these scammers use false or altered documents in order to convince their victims. This is one of the most common ways that scammers take advantage of real estate investors in Colombia. That said, it’s also not that difficult to avoid. Working with a team like us at Tycoon.to can help you ensure you don’t become a victim to this type of fraud.
What often happens in these cases is that a scammer will claim to be a partner of the owner of the property. They will often tell their victims that since the owner resides outside the country, they have the authorization to carry out the owner’s real estate transactions. It might seem like an obvious red flag, but not all land investors are suspicious or skeptical by nature and a claim like this might seem valid.
To avoid becoming a victim of such a scam, you can verify the ownership history and no-lien certificate of the owners of the property. In addition to verifying the authenticity of these documents, you can also request that the proxy or business partner in the transaction has power of attorney which you can easily authenticate through a Colombian notary’s office.
Hidden property damages
This is probably less common with land purchase deals, but still worth mentioning nonetheless. Another common type of scam is when the property has damages and the seller does not mention these damages to the buyer.
For example, a property might have mortgages, foreclosure or inheritance processes in play that would prevent a purchase process from being completed.
To avoid this type of situation, an in-depth analysis of the ‘certificate of freedom and tradition‘ should be carried out. You can also ask a specialized agent, either a real estate office or a lawyer, who can conduct a search both in the notary’s office where the property is registered and in the courts to determine that the property is fully sanitized and ready for sale.
Owners residing abroad
There are also cases in which the alleged owner claims to live abroad, and therefore asks that the whole business and sales process be carried out digitally through email and online transactions. In these cases the alleged owner will often try to persuade the buyer to send him or her money in advance, in order to be entitled to use the property while the entire purchase process is completed.
In these cases, the best option is to request that the process is carried out through a real estate office or through a third party that fulfills the functions of a proxy. This will help you ensure that there is documentation that validates that this person is the true owner of the property.
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