Trusting Your Money to Strangers | Pathfinder International

Saturday, November 21, 2009

Dear Reader,

In the past weeks in her "Twelve Things you Need to Know to Do…and Then Do" series, Margaret strongly recommended that you:

1. Engage your own independent legal advice,
2. Buy the right title insurance,
3. Scrutinize your sale contract,
4. Investigate your title deed carefully,
5. Check permits and approvals,
6. Make sure you have access,
7. Get a handle on the infrastructure essentials,
8. Dig deep into your developer’s background,
9. Analyze those CCRs and HOAs.

This week, we look at the final stages of the buying process, when you should start thinking about tax issues, setting up the ownership of your property—and, of course, paying for the property.

You wouldn’t hand over a large wad of cash to a complete stranger under normal circumstances, but that’s exactly what you’re about to do. You need to ensure that you get what you paid for in return. Over to Margaret…

Tip #11: Investigate Tax issues and wills Discuss with your attorney the best way to hold your property overseas. Whether you hold the property in the name of an individual or a corporation, for example, is dictated by your personal circumstances and what your plans are for the property…do you want to hold it long-term, sell it before completion, or use it for rental income?

Ask what happens if you die (not a pleasant subject, I know, but you should ask). You may need to have two wills, one in the country you are buying in, and one back home. If you are a couple, how would the death of one partner affect the property ownership? Also ask what potential tax liabilities you would face in that situation.

Tip #12: Use Approved Escrow Services You are at the end of our checklist, and ready to start making payments to the seller. We advise that you use escrow services at this stage, and we mean approved escrow services, such as those offered by First American Title Insurance.

Developers and attorneys will have escrow accounts, but they are often no more than a separate bank account in the developer’s or attorney’s name (and sometimes they’re not even separate). An escrow account has terms and conditions, for both parties. It reduces the risk that you’ll pay but not get title to the property in return.

Remember, buying a property overseas is exciting, and potentially one of the most profitable investments you can make. You just need to do your homework, and make sure it’s the best possible deal for you."

Now that you’re through the necessary but tedious part of your due diligence, the next stage is visiting the property—which we always recommend you do, before you buy. This is a crucial part of your due diligence, but it’s also fun. And it’s where Pathfinder Chill Weekends come in.

A Chill Weekend is nothing more than an opportunity to enjoy a short vacation in exchange for allowing a developer the opportunity to showcase a property or development he is promoting. No strings, no high-pressure sales tactics, no hard sell, just a chance to investigate some real estate opportunities…and have a mini-vacation.

Best of all: the developers pick up some of the tab.

This December, our friends in Nicaragua will host a Chill Weekend.

Sunset at Rancho Santana

December 2nd-5th, 2009: If you’ve ever fantasized about living in a tropical paradise, then why not make plans to join us on December 2nd to 5th for a chill weekend at Rancho Santana. All you have to do is show up at Managua airport—and the Rancho Santana team will take care of the rest.

You’ll get a taste of colonial Granada, and the chance to explore Rancho Santana…relaxing on one of the five sandy beaches…snorkeling, surfing, horseback riding…or simply swinging in a hammock rocked by cool Pacific breezes.

Better yet, you’ll discover how you can cash in on an amazing undervalued Pacific Coast real estate opportunity, with discounts and financing on luxury condos until January 15th. The trip costs $299 per person, and covers your accommodation, airport transfers, and meals. Book your Weekend in Paradise here.

Ronan McMahon