Making the closing is the proverbial 'signing on the dotted line.' Prepare to pay for closing costs….

Closing procedures will vary according to Buyer and Seller and/or their attorney's wishes. In some cases, the Buyers and Sellers (as well as their Real Estate Agents) will all attend the closing. In other cases, each one presents separately. The closing will take place at a Notary's office. In general, though, the closing will be attended by all of the Buyer's involved, or their POA / representative and their Real Estate Agent, who has reviewed all of the components of the sale contract.

To get everything ready before attending the closing, the following documentation has to be delivered at the Notary's office to elaborate the final deed:

1. Photocopy of the Buyer's and Seller's ID.
2. Power of attorney issued by the Buyer, if applicable.
3. Copy of the Purchase Agreement or sales contract (Promesa)
4. Tax free property certificate (Paz y Salvo Predial) which indicates that all municipal taxes on the property have been paid.
5. Tax free value gain property certificate (Paz y Salvo de Valorizacion) which indicates that all taxes related to the increases in value of the property due to improvements at the local area have been paid; generally levied by all municipalities.
6. Copy of original deed / escritura

Notary offices take 1 or 2 business days preparing the deed/escritura. After this time, the document is ready to be signed and you had the time for collecting closing costs.

The notary's office gives both parties about 8 to 10 business days to sign it. Be sure that your name and I.D. is written correctly before you sign. Any mistake in the deed will require a correction and the need to come back to the Notary office and sign again.

At the Notary's Office:

1. Both Seller and Buyer (or their POA / representative) sign and finger print
2. The Buyer must be ready to pay Seller the balance of the sales price. Normally buyer has already paid to the Seller before meeting at the Notary's office the total amount, via a transfer of funds into an account of Seller's direction, or Cashiers Check drawn on a Colombian bank, or a certified cashiers or bank check.
3. Seller pays for, and presents to the Notary, the proper amount of Sales Tax.
4. Buyer pays the Notary's fees agreed in the purchase agreement

Within about 48 hours the Notary's office usually sends off three (3) copies of the deed/escritura. One is for the legal registration at the Government's Registry Office.

Closing Costs and Related Fees:

You should be prepared for closing costs and related fees: They are about 2% to 2.5% of the agreed upon Sales Price.

Closing Costs Includes:

1. Notary expenses -- They are 0.5% upon the deal value (It includes notary's fees, authenticated copies, IVA sales tax, etc.)
2. Register fees (0.5%)
3. Local Taxes and other charges (1%). This includes municipality taxes (Boleta Fiscal).
4. Income Tax (Only for the Seller…. 1%)

The following are the costs that normally each party has to assume:

To the Buyer……..

1. Title search by Buyer's attorney
2. Appraisal if needed or desired
3. Notary's office fees as agreed
4. Registration fees as agreed
5. Recording of the Title (after the closing)**

** When you get the deed from the Notary's office, you should record it at the local government's records, office showing that Title has been legally transferred to the Buyer. This could take about a week or five business days. Remember: Once issued the deed, you have two months to manage your legal validity before the Registry office of Public Instruments. At that time you may be required to pay city and state taxes (Boleta fiscal). After the deed is released by the Registry office, it is recommended to ask for another title certificate updated (costs about U$4.) to confirm that the process was made properly and the property is finally registered in your name. (your realtor and/or attorney should be assisting you with all of this….).

To the Seller……

1. Tax free property certificate (Paz y Salvo Predial) which indicates that all municipal taxes on the property have been paid.
2. Tax free value property certificate (Pas y Salvo de Valorizacion) which indicates that all taxes related to the increases in the value of the property due to improvements to the property or area has been paid… if applicable?)
3. Notary's office fees as agreed
4. If the Seller is an individual, then 1% of the sales price is deducted as withholding tax (Retencion en la Fuente).