Hidden expenses: everything you need to know to avoid problems when buying a house

Without easy access to mortgage credit, raising funds to buy a home is complex and every penny must be well spent when closing the deal. Experts maintain that beyond the registration of the property, the procedure involves several costs which may surprise the buyer. Therefore, they suggest to be warned.

Once the interested party has chosen and visited the property, the first thing to take into account is that at the time of booking, it is necessary to be as precise as possible on the commission costs, the amount of the offer and the deadlines for signing the ticket and then the deed. In addition, also agree on the party that the notary public will appoint – this is usually the buyer – and the place where the notarial deed will be signed.

Once the reservation has been accepted, the notary will take care of requesting all the necessary documentation from the seller. The papers in hand, the “title study” will be carried out then the date and the place will be fixed to sign the sale.

Specialists recommend that it is convenient to draft the deed of sale before drafting it.

mario gomezBlue, says GlobeLiveMedia that “professional practice indicates that one must be careful when writing the note. A preliminary task is the review of title and documentation related to reports issued by the Land Registry (Dominion and Inhibition). It is important that the real estate broker carefully studies each of the clauses that make up the note, so that when signing it, the interested parties are fully convinced that the text is strictly in accordance with the expression of the will of the contracting parties.

Attention should be paid to the following points:

1) Data of sellers and buyers (purchase on commission, representation);

2) Consent of spouse/partner;

3) Property data;

4) Price and method of payment;

5) Securities without mortgage or embargo;

(6) Work and construction plan;

7) If there are several sellers, solidarity clause;

8) Debts for business (debts that exist by reason of or because of the thing);

9) Properties by accession (are those acquired by natural or artificial accession; for example, buildings and plantations when a property is acquired);

10) Charges and taxes;

11) Review of certificates;

12) Lifting of previous measures; And

13) Penalty clause (these are pecuniary sanctions or pre-established fines, provided to ensure what has been agreed in the contract and which must be paid, if necessary, by the offending party).

It is recommended that all charges are clearly detailed in the booking and made known to both buyer and seller. For example: Who will pay the notary public’s fees? Who will pay the stamp duty? How will the fees of the intervening real estate agency be paid?

The reservation or deed of sale must specify how and when the deed will be made. This point is very important, because often when a person buys, for example, in a housing estate, he does not know that the act is not immediate.

In the Ciudad Autónoma de Buenos Aires, unlike the mayor parte del país, el comprador debe abonar 4% de comisión inmobiliaria y el costo de la escritura pública de venta lo pagan ambas partes en 70% el comprador y 30% el vendedor, approximately.

“The main difference lies in the local tax which taxes operations with stamps. There are different rates in each district and the treatment of the non-taxable minimum is different in the case of individual housing in the jurisdiction,” Gómez said.

When signing a sale-purchase transaction, the buyer pays notary fees, real estate fees (4% or 3% of the value set for the property) and half of the stamp duty (unless it is a detached and permanent house and benefits from an exemption). The seller pays some notary fees corresponding to him, the real estate fees (2% or 3%) and the Tax on real estate transfers (ITI) or profits, according to what depends and 50% of the stamp duty.

Mariano Garcia Malbranpresident of the Chamber of Real Estate Services Companies (Camesi), said GlobeLiveMedia that “it is necessary to ensure that the property has updated plans and adapted to the reality of the property, to avoid that there are undeclared reforms which can be a problem for the granting of bank loans, as well as generate costs for its registration before public bodies and the payment of heavy fines and retroactive adjustments.Another point to be clear on is to ensure that the property is indeed unoccupied, attention must be paid to sales in which they state that the tenants will retire when possession is handed over in the deed because often this does not happen in the end and it is a headache”.

Once the buyer has already chosen the accommodation and has reserved it, the ideal is to ask both the real estate agent and the notary involved for a receipt detailing the expenses he will have to meet. “It’s a pro forma of expenses. Because sometimes it happens that you buy the house and they don’t tell you how much you will spend on the notary. Somewhere they tell the buyer that the deed will cost so much money, but when he receives the invoice from the professional, he is surprised because it is a considerable sum. The deed fee is paid by the buyer,” he said. GlobeLiveMedia Sebastian Canteroreference and businessman of the real estate market.

They also advise to take into account that if the real estate agency carrying out the operation is a Responsible Person Registered for VAT, when paying the fees, the rate of 21% will be charged. And if the invoices are agreed in dollars, which is specified on the invoice, at the equivalent exchange rate in pesos.

“When paying VAT, 21% is paid in pesos at the Banco Nación rate, so you have to see that these dollars are paid under this price and not for the parallel, where the sum would be much higher,” Cantero said.

In addition, if you buy an apartment in a building, you must take a good look at how the payment of expenses is made up and if there are legal proceedings in progress.

Oscar Pueblaarchitect and specialized broker, highlighted GlobeLiveMedia that “today there are many people who do not pay their expenses and delinquency is increasing. It is good to observe what are the repairs that are carried out in the building because without realizing it, one ends up buying a problem and it is not how much they pay for the expenses per month, but how they are detailed . That is why it is essential to know whether the consortium is financially sound to avoid a complicated scenario in the future”.

Other expenses that may arise and for this it is essential to read well before signing are that there are outstanding issues such as tax or service debts, unfinished estates, among others. It is essential to know that there are certain documents issued by AFIP that must be presented by the seller, one of them is the Real Estate Transfer Offer Code Certificate (COTI) for sales over 5,000,000 pesos.

“The second certificate in the case where the sale relates to a single building and the seller with the proceeds of the operation acquires another, is the certificate of exemption from ITI payment. These certificates must be requested with the tax key on the AFIP page and are not issued automatically and it is essential that the ITI exemption is presented to the notary at the time of signing the deed, otherwise he must withhold the tax” , advised Mariano García Malbrán.

It is also important to check that the details of the property purchased are correct. A typing error can then be slipped into the deed, which subsequently leads to very costly administrative problems, both in time and money.

In several other cases, the delivery of the property is done simultaneously with the signature, since the act is celebrated with the handing over of possession in the same act.

It may also happen that the delivery of the property is subsequent to the signature of the notarial deed, when the seller or the buyer need additional time to carry out the move, in this case a Loan agreement enough time for the seller to vacate the property.

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