Buying off plan in Colombia: how it works and what to check

Buying off plan means buying a home that doesn't exist yet: you pay in stages while it is built. It lets you put the down payment together over months or years and usually costs less than a finished home, but it calls for a careful look at who and what you are buying from.

The stages of a project

1. Launch and pre-sale. The developer offers the units before building. Buyers' money goes not to the developer but to a trust company (fiduciaria).
2. Break-even point (punto de equilibrio). Once the required share of units is sold and the technical and legal conditions are met, the trust releases the funds and construction starts. If it isn't reached within the agreed period, the money is returned.
3. Construction. You keep paying the down payment in instalments.
4. Deed and handover. You pay the balance, by loan or with your own funds, the deed is signed and you receive the home.

How it is paid

• Reservation (separación): a first payment to hold the unit.
• Down payment (cuota inicial): usually around 30% of the price (less for social-interest housing), spread in monthly instalments during construction.
• Balance: the remaining 70% when the deed is signed, normally with a mortgage or a housing lease. You can add subsidies if you qualify.

Ask whether the price is fixed or adjusted during construction, and how.

What to check before you reserve

• The developer: which projects it has delivered, whether it met its dates and what people living there say.
• The trust company: that it is supervised by the financial regulator (Superintendencia Financiera), and that your payments are made out to the trust, not to the developer or a sales advisor.
• The land: the certificate of title, to see whose name it is in.
• The permits: the building licence and the filing with the municipality that allows homes to be sold.
• The area: the difference between built area and private area, in writing.
• The finishes: exactly what is delivered. The show unit often has upgrades that aren't included.
• The delivery date and what happens if the developer is late.
• What happens if you withdraw: how much is deducted.

Warranties after handover

The developer answers for finishes for one year and for the structural stability of the building for ten. Inspect the home carefully on handover day and put everything you find in writing.

Pros and cons

• For: you pay the down payment gradually, the price usually rises between pre-sale and delivery, and the home is brand new.
• Against: delivery can be delayed, you can't see the result before buying, and you keep paying rent while you wait.

Where to see projects

In New developments each project shows its stage, its unit types with "from" prices, construction progress, the estimated delivery date and the sales office. You can also browse developers.

Frequently asked questions

What costs are there besides the price?

The deed and registration costs at the end. See Closing costs in Colombia.

Can I sell my unit before handover?

Many developers allow the contract to be assigned with their consent, sometimes for a fee. Ask before you sign.

Is it better to buy a resale home?

It depends on whether you have the full down payment and when you need to move. Compare in How to buy property in Colombia.