How to buy property in Colombia, step by step

Buying a home is a big decision and a process with several steps. Knowing them in advance spares you surprises with the money and the paperwork.

1. Set your budget

• Down payment. Banks don't lend 100%. A mortgage typically covers up to 70% of the home's value, and up to 80% for social-interest housing (VIS). You bring the rest.
• Monthly payment. By regulation, the first instalment of a home loan may not exceed 30% of household income.
• Transaction costs. Set aside an extra percentage for the notary, registration and taxes. See Closing costs in Colombia.
• Subsidies. The government and family compensation funds (cajas de compensación) offer subsidies for social-interest housing depending on household income. Conditions change: ask your compensation fund.

2. Get pre-approved for the loan

Before you search, ask one or two banks how much they would lend you. With pre-approval you know your real range and sellers take you more seriously. Compare the rate, the term, the insurance and whether instalments are fixed in pesos or indexed (UVR).

3. Search and visit

Look in two or three areas and compare prices per square metre. At the viewing, check for damp, water pressure, light, noise and the state of the shared areas, and ask what the monthly building fee is. Start with properties for sale or new developments.

4. Do the title check

Before signing or paying anything, ask for the certificate of title (certificado de tradición y libertad, less than 30 days old) and go through it with a lawyer; the bank will do so if there is a loan. Confirm that:

• the seller is the owner named on the certificate;
• there are no liens, lawsuits or restrictions;
• if there is a mortgage, how and when it will be cancelled;
• property tax, betterment levy and building fees are paid up.

5. Sign the promise of sale

This is the contract in which both sides commit to signing the deed. It should state the price, the payment terms, the date and notary for the deed, the handover date and what happens if either side defaults. A deposit (arras) is usually agreed, which the party who backs out forfeits.

6. Deed and registration

1. At the notary you sign the public deed of sale and, if there is a loan, the mortgage.
2. Notary fees, registration tax and registration fees are paid.
3. The deed is recorded at the Registry Office (Oficina de Registro de Instrumentos Públicos). Only then are you the owner.
4. Ask for a new certificate of title and check that you appear as the owner.

7. Take possession

Take the property with a signed record: meter readings, keys, the condition of each room and clearances for utilities and building fees.

Frequently asked questions

New or resale?

A new home is paid in stages while it is built and comes with the builder's warranties, but you wait for delivery. A resale home you see as it is and get soon, but you need the full down payment up front.

Can I buy if I live abroad?

Yes, through an attorney in Colombia. If you are a foreigner, read Buying property in Colombia as a foreigner.

How long does it all take?

With your own funds, a few weeks from the promise of sale to registration. With a mortgage, the bank's review and disbursement usually add one to two months.