Buying a house in Bolivia is more risky than you think, but it also can be very profitable, because houses here most of the time only go up in price. There’re various options to buy a house in Bolivia, e.g. from major Banks, with the help of worldwide known realtors or by yourself. You must take into account the risks involved, because buying a house in this country often requires a lot more care on the legal side than elsewhere.
To buy a house in Bolivia you need to 1) understand the laws that regulate real estate in this country, 2) become at least a temporary resident, 3) sign up the sales contract in a public notary, 4) pay the taxes in the local government and 5) register your ownership in “Derechos Reales” entity.
Here we are going to talk about all the steps and legal procedures that you need to follow in order to buy a house as a foreigner in this country. Also, we will describe in detail all the risks when you buy a house here. Finally we will list the best option, according to safety and price, to buy a house in our country. We are real estate experts from Bolivia.
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Warning: Risk of scams when buying a house here
Our advice is: Be very cautious when you’re buying a house in Bolivia, you really need to know how things work here and which are the threats you will deal with. There are very important risks and troubles you will need to face in order to buy a house here.
This advice would be too much or too extreme for some people, and of course we are talking to you as Bolivians and we are just being honest with you. This is not a country where foreign people have the same legal security and facilities as they could have in developed countries or even in other South American countries.
Of course, people from overseas are treated fine here, but only in tourism. For more serious situations, like real estate, Bolivia just doesn’t offer good support to them. This may be different for multinational companies trying to establish here in Bolivia, but not for a solitary person, who is alone and doesn’t have a business that supports him.
Bolivian laws and public institutions don’t support well overseas people
As we said, this is not because Bolivian people don’t like people from other countries, it’s more a situation of how laws and public institutions work here in Bolivia. It’s also the result of lots of informal (non professional) people working in the real estate field in this country, most of them do a bad job when helping Bolivian clients in the house’s buying process.
And this is not the worst situation, Bolivian people are very afraid of getting scammed by lawyers and informal real estate agents. If this is the situation for the Bolivian people. Imagine now how it could be for overseas people, who even don’t speak Spanish and don’t know how things and laws work here.
This is why we’re recommending you to just be very very cautious when buying a house in Bolivia. You could end up losing a lot of money and time. You could get scammed and lose tens of thousands of dollars and several months, one year or even more of your time in the hassle of trying to fix a badly done house buying process here.
If you are trying to make an investment here in Bolivia, we won’t lie to you, there is a lot of opportunity, but there are also many of them in other countries of the region, which have more clear laws and procedures to deal with overseas people and real estate, Bolivia does not have a good legal system, you need to master the legal side of real estate here first. We’ll talk more about these precautions later in this post.
You can’t buy a house in Bolivia just as tourist
Quote-H: Remember that you can’t buy a house in Bolivia, unless you’re at least a temporary resident in the country, And you have your foreigners’ ID card. This means that just as a tourist, you can’t buy a house in Bolivia.
When you get a temporary or permanent residence in the country, you also get your foreigners’ ID. This document gives you all the rights that Bolivian citizens enjoy in the country, and with it, you let the Bolivian Constitution work for you, because it says: both Bolivian and legal residents from other countries enjoy the same rights. To get this status, you need to be a “legal resident” and have your foreigners’ ID.
But the difficult situation is here, as a tourist you can’t just get this temporary residence, instead, you need a reason to be a temporary resident of Bolivia. This reason can be:
- For working purposes.
- For health purposes.
- For studying purposes.
- For being part of a diplomatic or international organization working in Bolivia and you are an employee of it.
- Because either your father or your mother are Bolivians.
- Because you are going to marry a Bolivian person.
- Not for tourism purposes.
This is actually a major issue when trying to buy a house in Bolivia, because before buying it, you need to become at least a temporary resident, and getting this status is difficult for the reasons cited above. You can’t just turn yourself into a temporary resident without any reason, you need first to get this reason.
But after you get your foreigners’ ID, you are almost like any other Bolivian, you acquire the same rights, in everything, including in real estate transactions.
Then, ¿How to safely buy a house in Bolivia?
The only way we recommend for you to buy safely
There’s certainly a possibility for you to buy a house without getting all of the risks that this country has for you, and this way is buying from the major Banks available here. And we recommend that you only do it this way, because we find it very secure and also somewhat cheaper because you in most cases will get a discount of 20% of the appraisal price.
The steps to buy a house safely in Bolivia from major banks are:
- Search for a house that is actually in an auction process, or for a house that has been acquired by a bank after a foreclosure process.
- To find houses that are in these situations, you can see our dedicated article, where we list all the sources and details.
- Contact the bank who is responsible for the auction, use the contact details that are available on the listing or just call to the main numbers of the bank and they will transfer you to the appropriate employer.
- You will need to come to Bolivia or have a legal representative to do all the action process and paperwork on your behalf. The same bank of the listing can help you and guide you through this process. We recommend that you just come to Bolivia and go through this auction buying process by yourself.
- You’ll need to fully pay the house, once you get the house in the auction process and gain the bidding, you will need to pay all the house’s auction price without any credit. Remember that you can get houses with a discount of 20% in Bolivian house auctions; this is the max discount allowed by law.
- You will get the property of the house with the help of legal Bolivian assistants and the warranty of the bank, this last advantage is key to avoid possible scams and associated risks in the buying process.
The key of this procedure is that you will buy the house in an auction from a foreclosure process, then you will have the help and guarantee of major Banks in Bolivia, and also a 20% discount.
These institutions will review the house’s papers, the veracity of the actual owner, even, they will do some of the legal paperwork for you and guide you throughout the legal process of buying a house here. Banks in Bolivia are very serious institutions, you can trust them.
There is also a possibility to buy the house with a mortgage from a major bank, but to go this way, you first need to permanently live here and have a stable income, banks will be very cautious when approving loans for foreigners. Also, Bolivian laws don’t forbid banks to bring loans to foreigners.
Precautions you need to take when buying a house in Bolivia
There is nothing similar to Title Insurance to secure real estate transactions in Bolivia, as there is in the United States. So here in Bolivia if you buy a property, you do it at your own risk. Then, you need to be very careful with the risk of fraudulent titles and papers that belong to a property.
The most important precautions that you need to take in order to avoid possible scams and similar risks are:
- Buy a house from Banks through foreclosure processes and auctions. By far the safest and easiest option for people from overseas, also in most cases you will get a discount of 20% over appraisal of price.
- Buy a house with the assistance of the 2 major realtors in Bolivia, ReMax and Century 21. We only recommend these two companies, any other realtor in Bolivia is not as good as them, and in many cases you have the risk of ending up working with a scammy realtor.
- Get the best possible legal assistance in Bolivia, if you want to run the legal buying process by yourself, you are at your own risk, but you can find good references of lawyers in:
- Your own embassy.
- From major banks in Bolivia.
- We don’t recommend you other sources of references. Be really careful with Bolivian lawyers, many of them will try to take advantage of you or even get you in horrible legal troubles.
- Get multiple legal assistants, at least 3 of them (none of them must know the other ones) so they can review the house’s paperwork and the legal buying process on their own side.
- Only real estate sale contracts that are done in a public notary are valid for the Bolivian law system. Never buy a house here with just a private sales contract!
- Register your ownership of the property in “Derechos Reales” Bolivian institution. This is the ultimate entity that registers everything about real estate in Bolivia. You must register your ownership here to finally have the security that the house belongs to you.
- We have a guide in Spanish about the paperwork involved in buying a house in Bolivia. Visit this guide in the following direction (Translated: Link). This guide has been written for Bolivian people, but you can get a lot of knowledge from it.
The above precautions are only the most important ones and not all of them, you should read our Spanish guide to have a better sense of which precautions to take when you buy a house in Bolivia by yourself. Nevertheless, always get the best possible legal advisors and also multiple of them (each good legal professional should cost you between $50 to $100 for all his services, these are the commissions for Bolivian clients).
Remember also that you can’t buy and own an agrarian or rural land (a property that is out of the urban area) in Bolivia, this is something that is forbidden by law. Also remember that you can’t buy any property that is on the 50 km wide edge of this country.
Pre-planning steps to buy a house in Bolivia
So now we are I’m going to show you how to buy a house in Bolivia, but please take into consideration the advice at the beginning of this article, and remember that we are not just people talking about it, we are experts in the field and have a well-known Bolivian Spanish site CasasenBolivia.com that guides Bolivian people though the process to make real estate operations and activities in Bolivia.
That said, let’s continue.
Before buying a house in Bolivia you need to make some preparation steps to have everything ready in order to run the buying process in the country. Most of the steps you need to go through will be the same as for Bolivian citizens, but some of them will be a little bit different:
- Knowing the laws and norms that regulate real estate in Bolivia.
- Knowing the socioeconomic situation in Bolivia.
- Requesting a trip to Bolivia to do it personally.
- Let someone else in Bolivia run the buying process.
a) Knowing the laws and norms that regulate real estate in Bolivia
There are different laws and norms that regulate real estate for foreng people here in Bolivia, we will tell you here about the most important ones. So here is the list of the most important laws that you need to take into account when you are planning to do real estate business in Bolivia.
- Constitution of the plurinational state of Bolivia (Translated: Link).
- The immigration law of Bolivia (Law No. 370. Translated: Link).
- The Agrarian Reform Law (Translated: Link).
Constitution of the plurinational state of Bolivia
The most important law of Bolivia, the State Constitution, indicates that overseas people have the same rights as native people, but there are some restrictions that you need to know, which involve real estate.
The most important regulations real estate in Bolivia’s State Constitution are:
- The article No. 262 states that no foreign person can be the owner of any kind of property in the Bolivian border line with a width of 50 km (near 31 miles)
- The article No. 357 states that no foreign person can own or register under his name any kind of Bolivian natural resource, it refers for example to metal mines, oil or gas wells, stone quarries and similar resources.
- The article No. 396 states that no foreign person can get or buy any kind of rural property or agrarian property from the government in the country.
The first article is very antique and might derive from the concerns about the country and it’s sovereignty.
Beyond these 3 general regulations, which we have shown you just before, people from other countries have the same rights as Bolivian native people in relation to almost all real estate aspects.
The immigration law of bolivia (Law No. 370)
The immigration law of Bolivia is very important if you are going to make real estate deals by yourself in this country, also you need to have a closer look at it if you are going to live here in Bolivia.
For example, there are three ways to stay here in Bolivia, each one with its unique aspects:
- Transitory permanence. Remember that if you don’t have at least a temporary residence in Bolivia you can’t buy a house in the country. To buy a house in Bolivia, you need you foreigners’ ID card (mandatory), which allows you to enjoy all the rights that Bolivians have in the country, but is document can only be obtained if you are at least a temporary resident.
- Temporary permanence. By this way you will have the authorization to stay here up to 3 years, but also you will have some prohibitions, for example, you won’t be able to leave the country for too much time (e.g. leaving Bolivia for months), if you want to do it, you will need a permission. Maybe you’re planning to stay for a long time here in Bolivia, but without becoming a Bolivian, so this could be a good option for you.
- Definitive stay. This is the naturalization way, you will need to become a Bolivian citizen. Of course that there is a possibility to stay for a longer time than 3 years without becoming a Bolivian citizen. But having this citizenship is the better way to avoid a lot of paperwork for different services and Bolivian benefits. So if you are planning to become a Bolivian and you need to buy a home or some real estate to stay for a long period of time, this could be your best choice.
We have an in deep guide about how immigration laws work in Bolivia, how overseas people can enter, stay, live and leave Bolivia following these norms, also with all the details about this topic, you can visit this guide in the next link: link
The Agrarian Reform Law
This law regulates a lot of things on how agrarian or rural land and agrarian activities are conducted in Bolivia, it also has important norms that affect natural and legal people from overseas. The most important one is that Bolivian owners of rural land are not allowed to buy or rent their rural properties to natural or legal persons from overseas.
All the regulations in the Agrarian Reform Law that impact foreigners and their real estate rights are inside the Art. 46:
- The article No. 46 (I) states that no foreign government or entity or corporation that depends on it is allowed to own any kind of rural property in Bolivia.
- The article No. 46 (II) states that foreign natural and legal persons are not allowed to be owners of any kind of property in the Bolivian border line with a width of 50 km (near 31 miles). The Article also states that it is forbidden for Bolivians to sell or rent rural land to any natural or legal foreigner. But this subsection allows Bolivian owners to make shared risk contracts with individuals from overseas to produce in rural lands.
- The article No. 46 (III) states that foreigners can get by acquisition or by sale any sort of rural property from the government in the country.
- The article No. 46 (IV) states that to sign up shared risk contracts, foreign natural persons need to have at least permanent residence in Bolivia, and foreign legal persons need to have a permission to run agricultural activities in Bolivia (but how to get the permission is not detailed!).
b) Knowing the socioeconomic situation in Bolivia
Bolivia in general has a historically good record for real estate. Most of the properties and houses in the cities have only become more and more valuable throughout the time, so the equity on them has just grown.
This situation has 3 main causes:
- A lot of people that used to live in rural areas are continuously moving to the cities, so the major cities are growing and growing and the properties inside them are becoming more and more valuable.
- Another reason is that Bolivia has a high birth rate, and we don’t expect that this will change soon, so more people need a home as time goes by.
- The third reason is that Bolivia has a consistently high GDP growth rate, so more and more people can get their own home.
In Bolivia it’s a general rule that, as time passes, properties get more and more equity and they end up having prices 2x or 3x times more than the initial price after 10 or 15 years (an average of 1.5 times of gain in equity in 5 years). Of course that, in order to make this happen, you need to understand on a deep level the Bolivian real estate market.
To get this amount of equity you need to know where to buy because if, for example, you buy in the center of a major city like Santa Cruz this gain in equity is not likely to be happen, but if you, for example, buy near the borders of urban areas of major cities, the properties there will generally become more and more valuable in a few years. Be sure that you know what you are doing.
The political situation in Bolivia
A few months ago we just had presidential elections (October 18, 2020), many people are speculating about this, and in which way the new government will affect the socio-economic structure of Bolivia. In Bolivia there is a general feeling that we will be just fine, but a minor part of the population is fearing that we could face some financial and economical instabilities in the medium term.
As you may know, in the real estate area, properties in Venezuela have just become very very cheap, at this time they cost between 10% or 20% of what they used to cost just a decade ago. So, we don’t want to alarm you, it’s unlikely that this situation will happen in Bolivia, but you really need to keep an eye on this, because later on you can lose a lot of money owning your property in this country if we end up turning into a country similar to Venezuela.
If you are going to buy a property here in Bolivia you need to carefully look out the socio-economic and political situation of the country. Then eventually, if you start detecting signs that something is going bad, you can act rapidly, and sell or transfer your properties according to the situation.
Once you have understood the socio-economic and political situation of this country, the Bolivian real estate market and also the laws that regulate real estate properties here, you can choose between two options:
- The first one is tripping to Bolivia to buy the property by yourself.
- The second one is requesting someone to represent you in Bolivia in the real estate buying operation.
We’re going to tell you about these two options in the next sections.
c) Requesting a trip to Bolivia to do it personally
The only option we think is right for you is to come to Bolivia and make it happen here, of course, with the assessment of commercial, real estate and legal professionals. Of course it’s not necessary for your presence all the time here but it will be critical in certain stages of the buying process.
It’s very likely that you’ll end up buying a house as a resident here in Bolivia, so you will need to get one of the legal ways of residence that are available in this country, legal ways we have described in the above section.
¿Is it possible to let someone else in Bolivia run the buying process?
By no means, you never but never should leave someone else to do it for you in Bolivia, this is because of two main reasons:
- There isn’t any legal framework to support foreign people delegating house’s paperwork in Bolivia. You can’t give a power attorney to a Bolivian representant, there isn’t any law in Bolivia about this. The only way you could do this is if you were a company, and to go by this way, you will need to establish a legal business here in Bolivia, but as a natural person, you won’t have any support from the laws in this country when giving a power attorney or something similar. It’s true that the laws of this country apply the same for Bolivian and for overseas people, but of course, this is not true in real life here. A lot of times, overseas people don’t get the same treatment as Bolivian citizens.
- You will be at a high risk of getting scammed. Many people here think that, as you are an overseas person who doesn’t know anything about this country, they can take advantage of you, and most of them will if they can. So it’s just a matter of luck if you find a bad professional to do bad things against you, even more if you delegate this process informally. And if something goes bad here, in many cases, no public institution or law will be enforced properly to protect you, and you will face even worse nightmares that Bolivian people normally have with the legal system in this country, with lawsuits which can last for years, corruption, bureaucracy and similar things. This is not a statement, it’s just what we see everyday here in Bolivia, public institutions and the government will even do worse in their functions with people from other countries in these situations. So if you’ll lose money here, it’s highly possible that you won’t recover it. Also there is nothing similar to “Title Insurance” in this country.
Before even starting to think about buying a house in Bolivia, you need to finish this stage and get all the documents that a foreign person needs to have. For example, you will need to get your immigration card (carnet de extrangeria), your visa for foreign immigrants (visa para migrante extranjero, there are different types) etc.
If you want to know how to make all the legal paperwork in order visit or migrate to Bolivia, either as a tourist or as a resident, I know all the details, visit our complete guide about this: link
The 5 legal steps to buy a house in Bolivia
Once you are here in Bolivia, you will need to closely follow and monitor the legal steps of buying the house, even if you are following the process that we explain at the beginning of this article.
We don’t recommend you to run these steps by yourself, unless you really know what you’re doing. It’s a difficult and risky process (because many people get scammed on this stage) that will take you between 2 and 6 months to finish.
Is way better for you to just get professional assistance from different professionals like a real estate company, a lawyer, a construction company (to do the appraisal), a bank (for finance and legal assessment), etc.
But of course, you need to know what the realtor and the real estate agent will do in order to bring you a property under your name. So next, we present to you the steps that normally a person that lives here in Bolivia takes in order to legally get a home here.
So the steps are:
- Make a contract
- Elevate it to a public contract
- Do the paperwork in the city’s government
- Register the property in “Derechos Reales” under your legal name
- Letting someone else take care of your house
1) Make a contract
You will need to make an agreement to a purchase contract in order to legally buy the house, this contract needs to be done by a specialized lawyer in real estate. In Bolivia as we have been saying, there is a very high risk of being scammed by some professional people in this field if you are a person from another country.
So, we only recommend you take recommendations to contact professional lawyers in this area by asking the major Banks of Bolivia. These institutions work with truly ethical and great professionals in the legal field, because they need to approve a lot of loans and mortgages for their clients.
So, you just need to ask these banks, maybe with the help of translation services from another person, if they can give references to you about very good and professional lawyers in Bolivia, with whom they normally work.
Maybe you can get more references from decent professional lawyers in the two major real estate companies present in Bolivia, Remax and Century 21, but they won’t give you references as guaranteed as the ones that you can get from major Banks of Bolivia.
So, in summary, ask for great lawyers in the major Banks of Bolivia, if they can give you references about the ones that they normally hire, so you can work with these lawyers also.
Additionally, it’s not a bad idea to hire more than one lawyer (3 different ones is a good number) and let them review the contract that you are going to sign, to find if there is some strange issue happening in this document. Also if these 3 different lawyers can assist you simultaneously throughout the entire sales process, it would be even much better.
2) Notarize the purchase contract
You will need to bring this purchase contract to a Bolivian notary signing agent, this professional will sign the contract in order to make it publicly available and to turn this contract legally valid.
The notary signing agent will review all the documents and the contract before signing it. This professional may find legal troubles or extrange issues happening in the contract or in the documents, that’s why you also need to find a very good notary signing agent, so he or she can properly review all the documents of the house.
3) Do the paperwork in the city’s government
After signing the contract and notarizing it, you will need to make some paperwork in the local government of the city in which you are buying the house. You will need to get different kind of documents and pay taxes in this public institution, for example:
- The cadastral certificate.
- The land use plan.
- Pay municipal taxes.
4) Register the property in “Derechos Reales” under your name
Derechos Reales is the government institution where all Bolivian real estate properties are recorded, in order to really legally be the owner of a house in Bolivia, you need to register your property under your name in this institution.
If you fail in your attempt to register your home in this institution, the house won’t be legally yours, and in the eyes of the government the house wont belong to you, so any “clever” person may take it. If you don’t do the right paperwork in this stage, fixing it will be a nightmare, we can assure you that it will be.
Maybe you won’t even be able to fix troubles in the paperwork, and you will need to just leave it as it is. That’s why, to arrive at this the final stage of buying a house in Bolivia, you really must have done things right in the previous stages, so you won’t have many troubles when registering your house in Derechos Reales.
5) Letting someone else take care of your house
After you successfully bought the property, maybe you are going to go back to your country, or travel between the two countries permanently, so you will need to let someone else take care of your house.
How to do this?
Take into account that in Bolivia there are laws that enable people who is taking care of a home turn into the owner of this house if certain conditions are meted, for example:
- The No. 247 Bolivian Law. If the housekeeper doesn’t have signed a legal home takecare contract, after he is living only 5 years in the house, he can turn himself into the owner of it.
- The usucapion Bolivian law. This law enables a person that is taking care of a house to just get it after 10 years of living in it, if there is not a legal contract that supports his permanency and if the legal owner doesn’t show up before and claim his rights.
That’s why you must sign a Bolivian legal home rental contract turned into a public deed, so the person that is going to take care of your house will legally live inside it, by this way you’ll have a lot less risk of losing your house in the future.
If you want to see all the details, we have a complete guide about how to rent a house in Bolivia, including how to make a legal home rental contract.
The fraud rate in Bolivia is very high
In Bolivia only 5% of realtors, real estate companies and agents are professional, the other 95% are, in the best case, amateur people, and in the worst case, scammers. We have seen this all the time in Bolivia, people who seem to know everything about real estate, who have experience in this type of transactions, get scammed. Even native people, who have been born and have lived all their life here, take very seriously the possibility of being scammed, because this is a real fact.
For forange people it’s worse, they are more likely to be scammed. So, we advise you that, no matter what you are going to do here in Bolivia, don’t hire questionable or unknown realtors and/or real estate agents.
Remax and Century 21, the only 2 realtors that could do a decent job
In Bolivia, two major and global real estate companies are present (Remax and century 21), and that are making a lot of deals. For example, Remax in this country is making an average of 2,000 real estate transactions every single year. Century 21 is smaller, making an average of 500 real estate transactions per year.
But, as you may know, these two companies are very known and professional, they are also present and working worldwide. So don’t hesitate to hire one of them. The only trouble you will find is that most of the people who work on these companies here won’t be able to communicate with you, because the majority of them don’t know how to speak in English. So you will have a hard time finding some Remax and Century 21 real agents that can communicate with you in a proper way, but after that, you will be just fine.
We can’t recommend you to hire any other companies, many of them are just small companies that work in one major city of Bolivia. For example, one company working in La Paz Bolivia and another in Santa Cruz Bolivia. They are not countrywide companies and only regional ones. Also there is another issue, almost no one that works in these regional companies knows English. So it will be very difficult for you to communicate with them, despite the fact that they are not as professional as Remax and Century 21.
If you find trouble trying to contact people that can speak with you in English, we recommend you to just call the owners of the franchises of these two companies, so they can send you to the right real estate agent.
¿How to find a good Re/Max or Century 21 real estate agent in Bolivia?
The good news is that both companies work in a network and have communications between countries. So the best thing that you can do is to:
- Communicate with Remax or Century 21 in your country, and let them find a good agent for you here in Bolivia.
Any other advice may be less efficient and effective for you. Maybe you just can call the owners of the franchises of these two companies here in Bolivia, but you don’t know which person you are contacting, and also you will have a hard time finding someone that knows English in a proper way, and be able to communicate with you.
So the best advice that we can bring to you is just make contact with Century 21 or Remax in your country, use them as a bridge, and let them find the best agents and agencies for you here in Bolivia.
¿What are the costs of buying a house in Bolivia?
When buying a house in Bolivia you will face two different kind of costs:
- The price of the house itself
- The transactional costs of the real estate operation
1) The price of the house itself
House’s pricing averages $150,000 in Bolivia. You can find some very modest houses at just $50,000 or even $30,000, at a rate of $100-$150 per square meter ($9,29-$13,94 per square foot), but they will be on the edge of the cities, and believe us, living in those edges will turn you out of even access to house’s basic services, like light or potable water.
You also can buy very pricey houses in the center of major cities, on the best zones, at $300,000 or even $500,000, at a rate of $1,000-$1,500 per square meter ($92,90-$139.35 per square foot).
This sweet spot for investing is located in the average zones and neighborhoods of the major cities of Bolivia. In this common zones where most of the Bolivian people normally live, and almost no foreigners, properties normally have a price around $150,000.
But if you want to live here, we really suggest you buy your home in the best zones and neighborhoods of the major cities of this country (where also a lot of expats normally live). In these areas, you will find houses between $200,000 and $500,000.
If you look zones like a Equipetrol in Santa Cruz, Cala Cala in Cochabamba or Calacoto in la Paz (the best zones of these cities), it’s normally to see houses with prices around $400,000, and apartments around $100,000, of course the houses in those zones are very decent and you will feel like if you were in a small town of the US.
The realtor will also get its commission, in Remax or Century 21 real estate agents charge between 3.5% to 4% of the house’s price, but it is included in the transaction. So, if you’re buying a $200,000 house, the commission of the real estate agent is included in the price, and you don’t need to pay more.
2) The transactional costs of the real estate operation
No matter if you are a Bolivian or foreign person, you need to take into account the transactional costs of every buying or selling real estate process in Bolivia. Actually the law of this country doesn’t even distinguish between these two kinds of people, they need to pay the same costs.
The costs you will be facing when buying a house in Bolivia are:
The real estate transactional tax
This tax is exactly 3% of the house’s value (the price of the house with which you bought it). For example, if you are going to buy a property priced at $100,000, you will need to pay a tax of $3,000.
The “Derechos Reales” inscription fee
This institution “Derechos Reales” is a public institution, government dependent, that legally registers every house here in Bolivia. If you have a house under your name in “Derechos Reales”, you can say that the house is legally yours. To make the registration, it will charge you around $6 for every thousand of dollars the house is priced ($6/$1000), if you are going to buy a house of $100,000 you will need to pay a fee of $600.
The appraisal costs
Here in Bolivia appraisals normally cost between 150 and 700 bolivians ($20 – $100). Of course, people here will try to charge you a lot more, because you are from another country, even more if you are from an English first tier country. So be careful with this if somebody charges you more than $250, if this is the situation, that person is trying to take advantage of you. People in this country find it very normal to charge far more to people from first tier countries, it’s just a cultural thing.
Legal assistance costs
A lawyer normally charges between 200 and 500 bolivians ($30 to $70) to do just the assistance services for Bolivian clients, this price does not take into account additional services, like making contracts, evaluating house paperwork, or fixing legal stuff that could appear later in the process. We do not recommend you to hire any lawyer in Bolivia unless you know what you’re doing. The law field has one of the highest fraud rates of all fields in the country. The only places where we could recommend you to find references of good lawyers are 1) the major banks of Bolivia (because they work with high professional lawyers in order to approve house loans for their clients) and 2) your own embassy.
Notary public fees
These fees normally are less than 500 bolivians (less than $70) for Bolivian people. Of course they will charge more to foreign people, but if you are paying more than $200 for the service you are getting screwed.
Home take carer/tenant fees
In order to find a possible tenant for your recently bought house, you can hire Century 21 or Remax again, they will charge you one monthly rental fee, which depending on the house will be around $300.
Also you will need to sign up a rental contract with the tenant, don’t forget to convert it into a public deed. To make this happen, you will need to spend on the lawyer and notary public fees, which will cost you $200 to $500, because remember, they normally charge more to overseas people.
If you don’t speak Spanish you will need to find a translator for you. Translators typically charge between $50 to $150 per day in Bolivia.
At the end of the day, you will be spending around 4% of the house’s value in just transactional costs when buying a house in Bolivia. So, for example, if you are buying a $100,000 house, you would need to have $4,000 more to pay the transactional costs.
In this guy about how to buy a house in Bolivia you have learned that there are a lot of risks involved when you buy a house in this country, because a lot of people will try to take advantage of your situation as a foreigner or even scam you. Also you now know that even Bolivian people is afraid of these risks and they take all the care that it takes to save themselves from possible legal troubles.
Now you also know that there are only two ways to safely buy a house and without overpriced deals. The first way is to buy from major banks of Bolivia in foreclosure sales and house auctions. The second way is to buy a house with the assistance worldwide known Realtors, ReMax and Century 21. There’s a way that is a lot more risky, which is buying the house by yourself with your own legal assistants.
Nevertheless, you also have acknowledged all the detailed steps to buy a house by yourself and with your legal assistants. You should really know the laws that regulate real estate here in Bolivia, then you should come to Bolivia and do all the paperwork with your lawyers. Remember that it’s very difficult to find a good lawyer here, you can get great references from them in your embassy and by asking in major Banks of this country.
We hope this information has helped you, and if you want to know how to find houses for sale in Bolivia visit our dedicated article: How to find houses for sale in Bolivia? All the ways, pros and cons.
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