Info for buyers and sellers
We hear this question all of the time. If you have been in Nicaragua any length of time, you know that many people will try to sell you property, even the owners of the property. Why would you buy property from a licensed realtor in North America or Europe?
You buy from a licensed Realtor because they are trained specialists in the processes of real estate. They must pass examinations and are held to regulations to protect the buyer and the seller. There are no licensed realtors in Nicaragua, so you must be extra careful. Legal contracts are written in Spanish, the rules are different and there are people here trying to take advantage of the inexperienced and the unwary.
As specialists in Nicaragua and the purchasing process, we will ensure you purchase your property in a safe and secure manner at the best possible price. You will have many questions on how to purchase property in a foreign country and we will be with you every step of the way. We know Nicaragua – the good stuff, what to avoid and those unusual things that may confuse you. No money changes hands until we ensure the title is clean.
- We help you find the right property for the right price at the right location.We will discuss your needs and arrange to show you properties that fit your criteria. We will advise you of any factors that may affect your choice of property.
- Select your desired property. We will assist you in making an offer on your chosen property including sales terms. Seller will accept, decline or counter-offer. During this time, a cursory investigation of title is performed.
- Once offer is accepted by seller we will ask for a 10% deposit which is kept until the closing, it does not go to the seller. The sales contract is written then signed by seller and buyerIncludes terms, sales price, estimated closing costs and identification of power of attorney. Contract also explains that your deposit will be returned if any irregularities are found. We will need a copy of your first two pages of your passport.
- Document procurement. All documents should identify the property by its legal description including the Finca, Tomo, Folio and Asiento identification numbers.From the seller we need:Copy of the deed (escritura)Site plan (plano) if seller does not have, we will have a surveyor create or provide itLetter of no objection (LNO) if near lake, ocean, river or result of agrarian reform title. The LNO usually is completed after the closing since it may take months to complete.
- Document processing with the assistance of a lawyer.You can provide the lawyer or we can suggest a lawyer but you have your choice.At this point a detailed title search is being performed, usually at least 30 years back.The property is investigated to ensure the taxes and other obligations to government are paid and up to date i.e. garbage pickup fees, cemetery fees (this research is called the solvencia).Ensure no liens, ownership issues nor encumbrances against the property (libertad de gravamen).All utilities are paid up to date by the seller, surprisingly the utility companies will expect the new owner to pay and does not pursue the seller.If there is a cuidador (caretaker) or other on-site employees, we will ensure all obligations to these employees are resolved by the seller i.e. contracts may be renegotiated.
We will work to resolve all issues and ensure seller completes their obligations.
Power of Attorney
If you plan to be out of the country at time of closing, you can execute a power of attorney (POA).
The cost of this is around $30 and allows us or your chosen representative to perform the closing procedures for you.
The POA is limited to buying this property.
These procedures usually take 2-4 weeks depending on difficulty on obtaining documents, issues uncovered, lawyer availability, etc.
Closing costs including sales commission are normally paid by the buyer. You will be provided a detailed list of closing costs to the best of our knowledge. Some of the fees are based not on the sales price but on a symbolic or catastral value which may be determined after the closing during the registration process. Catastral value is normally much lower than the sales price. Also, the magnitude of the sales price may change the percentages. For the lawyer, it is almost the same amount of work for a small sale as a large sale.
Commission costs are normally 6% of the sales price and 10% if the sales price is under $40,000.
Normally closing costs are around 3 to 3.5% of the sale price
1% to the lawyer, Managua lawyers charge sometimes 1 ½%
The lawyer’s fee includes all document processing and creation
Registration fees are usually around 1% of the catastral value to a max of C$30,000.
The property gains tax (DGI or la renta) which is 1% up to $50K, 2% 50K to 100K and 3% over 100k of the catastral value. This is usually paid by the seller since it is an income tax.
You will transfer the remaining purchase funds to us just prior to the closing date.
At the Closing
At the closing will be the seller, buyer’s attorney and buyer (seller and/or buyer may be represented by whomever holds the power of attorney)
You will sign the new deed (escritura) and provide the remaining purchase funds.
You are now the owner of the property and in full possession.
Ensure you have a copy of the unregistered deed (testimonio)) and the plot (plano).
Post Closing Processing
The attorney proceeds with the registration process i.e. new deed (escritura) is registered.
Fees are paid and the property is usually registered within 1 to 6 months.
If a letter of no objection is required, this may take 6 to 8 months.
When documents are completed, they will be given to the buyer.
Since the catastral value of your property is unknown until the registration after the closing, the exact amount of your fees is unknown. A settling then occurs and we rebate any overpayment on the registration fees or charge you for the underpayment. Similarly for the seller, we determine the exact amount for the property transfer tax and settle the difference.
As any property owner, you have rights and obligations. Remember that you are responsible for paying taxes, paying utilities, paying for employees and providing security for your property. You also have a responsibility to maintain your property in consideration of your neighbors. This is especially important to remember if you do not plan to live full-time in Nicaragua.
Casa Granada Properties assumes no responsibility for your property after the closing.
We can assist with providing names of contractors, architects, etc.
You are purchasing from Casa Granada Properties because you understand the value of purchasing from an established realtor familiar with the unique laws and procedures for buying property in Nicaragua. We will work with you through every step and ensure you have a clean title to your dream property.
Rightfully so, people are concerned they have a clean title to their property. In any case, there may be title issues that come up during the search through the history of the property ownership. We may find there are some legal procedures that may have to be completed before the title can be conveyed to you. For example, the owner of the property may have passed away requiring a death certificate to be created and the title lawfully conveyed to the rightful heir. This will delay the closing but does not mean there are unusual title issues. This is what lawyers do.
Of a more serious nature is the discovery that there are title issues such as confusion on the identity of the true owners, property ownership by a large group of people, property lines not being clear and other issues that may not be easily or ever resolved. In these cases, we will inform you, advise against buying the property and return your deposit.
Good question and many people have different opinions on the exact definition. First a little history since “colonial” refers to the years when Nicaragua was a colony of Spain along with most of Central America and South America. Nicaragua was historically the sister capital in Central America to Antigua, Guatemala. During the colonial period, Granada maintained a flourishing level of commerce with ports on the Atlantic Ocean, through Lake Nicaragua (a.k.a. Cocibolca) and the San Juan River. Granada and Leon are the two colonial cities of Nicaragua though you can find some colonial homes almost anywhere in Nicaragua.
A colonial home usually has a large enclosed room in the front called a sala. Passing through the sala you come to the living area which is outside but under a roof. The kitchen may be here or in the very back of the property. During colonial times maids and cooks prepared the meals so there was no reason to place the kitchen where the woman of the house had easy access. Plus it kept the smoke at the rear of the home. The living area would wrap around a large patio with columns supporting the roof and a full true colonial wrapped around the four sides or corridors. Another patio would be further back.
Restored colonial homes usually have a fountain in the front patio and a pool in the rear patio. In fact, in the historical section of Granada, the front patio must be natural and the pool in the rear. In this manner, pedestrians could look through the grand doors and see the trees and plants of the front patio. The doors of colonials are usually tall, massive and a double door. Having more doors adds prestige to a colonial and being on a corner also increases the value.
During colonial times, there were no vehicles so garages are a recent development but frequently there would be a zaguan where the servants would enter along with the vendors of fruits, vegetables and other sundries.
OK, there are three options in having your new home in Nicaragua.
1. Buy an existing home
Buying an existing home is convenient, fast and you know what you are getting. You can move in immediately with fewer headaches and quite often the home comes furnished. Don’t forget the hammock, it is not a home without a hammock down here. There will be a few surprises depending on the age of the house and who built it or restored it. Remember, there are fewer building codes here so don’t be surprised to find there is only one electrical outlet in a room and other oddities. You can still change the appearance of the house by painting rooms a different color or even making major renovations.
2. Buy a lot and build a home
Building a home in Nicaragua is not for the faint of heart. Most if not all of the construction companies state they build to North American standards but there are fewer rules here. Homes are much simpler here since they normally do not have A/C or heating ducts and vented roofs are virtually unheard of. Air flow is the most important consideration in the design. Houses can be 10 degrees cooler with just the right design.
The major reason for this option is you can design and build exactly what you want. Unless you live here while it is being built you will need to hire a good architect and a good building contractor you can trust in your absence. We can help you with finding these people. Labor is cheap but cheap labor needs much more supervision. There are no trade unions here and most workers need a job so will say they are skilled in whatever you need done.
3. Restore a colonial home
Everyone has considered this option that has visited Granada and there are all levels of restoration. You might be buying four crumbling perimeter walls or a home that is in fairly good shape that just needs modernization. So, you may have a small project or a major project. Another consideration is that if the home is in the historical district of Granada there will be additional regulations especially concerning the exterior of the home. Again you will need a good architect and a good building contractor.
Which option for me?
It is your decision but unless you are fluent in Spanish and have excellent building skills and experience, you should probably depend heavily on local people. Check with other expats on the background of those you hire. We will help you every step of the way.
It means that most properties can be purchased from anyone. Just because the property has a sign on it from one real estate company does not mean you can not purchase it from another realtor. You should be dealing with a realtor for the value of dealing with that real estate office. Unless the property is an exclusive listing which is not the norm.
A famous bank robber was once asked why he robbed banks and he stated “That’s where the money is.” Expats tend to move to where there are other expats. Nicaragua has colonial cities, ocean front, mountains, islands, farms, valleys and small, tucked away towns. Deciding where to live is a tough decision that will depend more on your sense of adventure and what you are looking for out of life. For expatriates, the two hot spots are the Pacific Coast and Granada. There are actually many expats living in the capital of Managua but these tend to be those that have businesses in Nicaragua, work with the embassies or other international concerns.
Granada is the colonial city of Nicaragua with many restaurants and activities to enjoy. It is 45 minutes from Managua where are located the international airport and the best medical facilities of the country not to mention modern malls and stores. Granada has what many retirees look for in a retirement destination and enough expats to allow community groups from book clubs to volunteer organizations. Yet it retains the small town feel where you can easily open a bed and breakfast or just relax.
On the Pacific Coast San Juan del Sur is a small fishing village that is popular with the expats , tourists and Nicas. There are many developments that are clustered North and South of San Juan del Sur. The views are stunning there and many people want to live near the ocean. Further North on the Pacific Coast there are other developments to check out and some have enough homes now to have a community. Notable development names include Montecristo, Gran Pacifica, Rancho Santana, Iguana and El Encanto with Iguana and Gran Pacifica already having 9-hole golf courses.
We can’t tell you where to live but most expats choose Granada or the Pacific Coast. Another reason is that the lawyers here are the most familiar with those two areas for doing the required title searches.
Casa Granada Properties specializes in Granada, the surrounding areas and the Pacific Coast but we can assist you with property anywhere in Nicaragua.
This is normally true. Sellers of properties will usually “list” their properties with any and all real estate offices that the seller believes can sell their property. Often, exclusive properties are simply owned by the real estate firm so they are selling their own properties. Nothing wrong with that but that is often why the property is exclusive. There are a few exclusive listings but it is unusual.
You do not have to be a resident of Nicaragua to purchase property or to operate a business. Many of the expats living in Nicaragua have chosen not to become residents. They simply must renew their visa every 90 days by leaving the country for three days or getting a three month extension. Becoming a resident does not affect your nationality i.e. you still retain your passport and the rights of your country of origin.
Having said that, there are advantages to becoming a resident of Nicaragua. Most Nica banks require you to become a resident to open an account and you may have difficulty without it to buy a phone and set up the payment account.
Of course. If you plan on looking at properties with us during your stay in Granada, we can help make your stay more enjoyable. We can arrange to pick you up at the airport, offer substantial discounts to stay at Hotel Casa San Francisco then assist you in seeing the local sites and activities.
The high season is December 5th through March 15th. We offer our clients 10% off during the high season and 20% off the rest of the year and you always receive a 5% discount for paying with cash.
Just contact us a few weeks before your arrival and we will assist in every possible way. This assumes room availability at the hotel.
We believe we are a reliable group of people you will want to do business with but we do have some particular strengths. Due to the global economic woes, Nicaragua sales were also affected though less so since we are a cash society unlike the credit economies in the states or Europe. Even so, only two major real estate offices remain in Granada and only the strong survive.
Our particular strengths are knowledge of real estate in Granada and the surrounding areas such as Laguna de Apoyo, Lake Nicaragua, Mombacho, Catarina and other areas within 20 miles of Granada. We also have considerable knowledge of the Pacific Coast areas of La Boquita and Huehuete which we believe are undervalued and overlooked.
We will help you purchase or sell property in any area of Nicaragua since our support network is quite large and extensive. But… we understand our limitations and if we feel another office or realtor has greater knowledge or can take better care of you in a particular area we will introduce to them. Only by providing what you need will you come to us on your next sale or purchase.