Standing out front of a giant 3-story hacienda the owner begins bragging about the how big it is. They tell me that it has 2 Kitchens, 14 Bedrooms, 42 Beds and is 1,000 square meters. I really was not seeing the 11,000 SQFT that was supposed to be there and I tend to get suspicious when owners tell me round numbers like 500, 400, 300, rather than something specific like 427m2. After carefully measuring the house and adding up all the numbers, it turned out to only have 610 square meters! When you do the math the real size turned out to be 39% less than what the owner said. This is the most extreme case that I have personally verified. On average we find most houses to be 20% smaller than the seller claims. Rarely will you run into a realtor down here who verifies property measurements, they are too busy rushing you down to the notary to sign the closing paperwork. The real size might be important to you if you want to be able to sell your property without taking a loss.
Consider this example:
Imagine that you buy a brand new 2,500 square foot house in the city for $137,500 ($55.00 per/SQFT). You figure that at this price you should have no problem getting your money out of it when you sell it. A year later you decide to sell the house. At this time newer houses like yours are selling for about $62.00 a square foot. You put your house on the market for $162,500 ($65.00 per/SQFT). One person who comes by to see the house really likes it and she asks you if you would accept an offer or $160,000. You quickly agree because it means that you would be making a profit over 20 grand after only one year. Later that day the lady comes back with her husband, a retired carpenter, who tells you that there is no way the house could be 2,500 square feet. You watch as he proceeds to measure the length and width of the house. After multiplying the length by the width and then taking that total and doubling it (because it’s a two story house), you discover that you only have 2,000 square feet. Because your realtor did not do their due diligence you ended up with 20% less house than you thought you were buying. The $160,000 sale price that you agreed on would have meant that the couple should be paying $64.00 per square foot. The couple would still like to buy the house but are not willing to pay the $160,000. You only have 2,000 square feet and it would therefore cost them $80 per square foot if the paid the full $160,00 that you had agreed on. They offer to pay your original $65.00 per square foot asking price but are not willing to pay for square footage that does not exist nor pay way above fair market value for the house. Their final offer is $130,000 and you are forced to decide between, losing $7,500 dollars on your house, trying to find a sucker who will pay you more than its worth, or keeping a house that you no longer want.
Keep the following in mind when looking at property in Ecuador
? Don’t let the seller or some realtor dissuade you from measuring the property. If they get nervous when you pull out the measuring wheel then there is probably a good reason for that!
? Square footage for condominiums in Cuenca is usually reported accurately but they almost always include parking spaces and storage rooms.
? Many owners don’t know or don’t remember the size of their house and just give you an estimate. Some error on the low side but most over exaggerate.
? Ecuadorians tend to include carports and covered patios in their area calculations.
? Even if you are buying from the original builder does not mean that he is telling you the truth about the size of the house. Often they will use the word “aproximadamente” to justify giving you inflated numbers.
? Don’t try to assess the value of the property just based on square footage. Market prices for different parts of Cuenca vary dramatically and so do construction quality and the quality of the finishings. Only a realtor who works full time and has his finger on the pulse of the housing market can assess the value of any given property.
Here everything is measured in square meters. There are 10.76 square feet in a square meter but you can use a quick rule of thumb when you are out looking at properties to help you compare with the more familiar square foot measurement. Just take the square meters and multiply by 10 (a 200m2 house is approximately 2,000 SQFT). Just ad a zero to the number of square meters and you get the approximate square footage.
You can also take the known square footages of houses that you have lived in and divide them by 10. For example, if you know that your first house had about 2,800 SQFT, then just remove the last digit and you are left with the approximate size of 280 square meters.
Tags: cuenca real estate scams, exagerrated size, square footage