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COMMON DEFINITIONS AND MEASUREMENTS
STEPS IN THE PURCHASE PROCESS
MONEY TRANSFER OPTIONS: U.S.

COMMON DEFINITIONS AND MEASUREMENTS

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The images above show relative size (how each measure compares to the other), not actual size.

1 manzana = 10,000 square varas = 1.73 acres = 0.7 hectares = 7005 square meters
1 square vara = 0.7 square meters = 7.56 square feet
1 vara = 0.84 meter = 2.75 feet

1 acre = 0.56 manzanas = 5,800 square varas = 0.4 hectares = 4003 square meters
1 square foot = 0.13 square vara = 0.09 square meter

1 acre = 43,560 square feet
1 meter = 3.28 square feet

$1 per square vara = $0.13 per square foot = 0.92 euros per square meter
$1 per square foot = 6.97 euros per square meter (as of March 2008)
$10,000 per manazana = $0.13 per square foot = 0.92 euro per square meter (as of mid 2008)

STEPS IN PURCHASE PROCESS

1. Buyer or Buyer's Representative finds desired property and decides to buy the property and sets his or her terms and conditions for buying the property. These terms typically include: 1) property has a clean chain of title going back to 1980; 2) property is free of liens, unpaid taxes and other obligations; 3) the buyer will provide a 5% (refundable or nonrefundable) deposit at a time and under terms he or she specifies; 5) 1% transfer tax will be paid by seller; 6) all conditions must be met and transaction must close within 60 days or the contract expires, 7) buyer takes immediate possession of land after the closing.

2. Serenity on the buyer's behalf gets the seller's terms and reviews the buyer's terms with seller. Serenity works to get mutual agreement between the buyer and seller on all terms. When such an agreement has been reached, Serenity prepares a Promesa de Venta (purchase agreement) from the Seller that includes all conditions or terms mutually agreed by the buyer and seller. This agreement, signed by both buyer and seller, secures the Buyer's claim to the property and a fixed price and establishes conditions and a fixed amount of time for both sides to meet all conditions before the property is transferred.

3. Serenity handles all fund transfers to seller or Seller's Representative. This is to ensure the integrity of the transaction and to ensure seller meets all obligations, including cancelation of all debts on property required to make it free of liens, before the seller receives his or her funds. The buyer can choose to initially leave the deposit, the after-deposit balance or funds for the total purchase of the property with Serenity, which maintains a Bank of America escrow account in the USA for this purpose, or to your selected lawyer or First American Title escrow account. But any subsequent transfer to the seller occurs through Serenity's Bank of America account at or before the closing to ensure the seller's obligations are met before he or she receives payment. Serenity then transfers funds to the seller only after express written authorization from the buyer and the buyer's lawyers and after all promesa de venta conditions are met to the satisfaction of the buyer and seller and their attorneys. Serenity charges no fee for its escrow service and does not transfer funds to the seller until given express written permission by the buyer and the buyer's lawyer, with such a form. This is a real-life example. Permission forms sent from outside the country must be written in the buyer's native language, signed by a locally recognized notary and e-mailed to permission@serenity21.com . The original completed permission document is sent by DHL or FedEx immediately thereafter to our company address, with the FedEx/ DHL tracking number also e-mailed the same day to permission@serenity21.com. Payment for legal expenses is arranged directly between you and whichever lawyer you choose.

4 . Buyer picks a good lawyer with strong referrals (someone with an excellent "word-of-mouth" reputation). We can direct you to top lawyers. Because the quality of legal work in Nicaragua varies considerably, Serenity asks that any lawyer you pick has good references and sign an agreement respecting Serenity's code of conduct.

5. Optional: Most Nicaraguan property is purchased in dollars. If you'll need to convert a non-U.S. currency to U.S. dollars, we recommend the foreign exchange and fund transfer services of HIFX. They can convert your foreign exchange at a favorable rate into the US dollars required for the purchase of most property in Nicaragua and transfer your funds without bank fees.

6. Optional: If Buyer plans to be out of the country, we recommend Serenity Real Estate or a resident of Nicaragua you trust be given power of attorney to handle matters on your behalf in your absence. This makes the purchase process faster, smoother and more secure for buyers who live and work outside of Nicaragua.

7. Seller must provide all property documents needed for a legal evaluation of the property and for a secure transfer of the property to the buyer, including an Escritura (Deed), property's Plano (Property Map), Historia Registral (Title History), Solvencia Municipal (confirmation that all property taxes have been paid) and Libertad de Gravamen (certification of whether or not the property is free of liens, and what the amount of those liens are).

8. Optional: Buyer or Buyer's Representative can order a topographical survey of the property's boundaries to confirm its dimensions, shape and location.

9. Buyer settles with his chosen lawyer in advance the total or estimated legal cost of obtaining the property. If you're not happy with your lawyer's estimate of the legal expense, you should talk to other lawyers.

10. Optional: Buyer can apply for Title Insurance (this includes choosing from a list of lawyers accredited by the title insurer to render a Nicaraguan legal opinion, such as those affiliated with First American Title). First American Title insurance can provide additional legal security and peace of mind. However, the extent of that protection can be more limited than many clients realize, and the process of obtaining it can significantly lengthen the time and cost of the purchase process. We strongly recommend contacting FAT for specific details and guidance on what the process entails, the extent of the protection FAT title insurance provides -- what protection its insurance offers, and what it doesn't -- and the cost of acquiring its policy coverage in order to make an informed decision.

11. Optional: For buyers wishing to obtain FAT certification but dealing with a seller unwilling to wait the time that might be needed for FAT certification (which could be up to five weeks or more), a secondary option is to seek the legal opinion from a First American Title affiliated lawyer (usually obtainable within two weeks of the lawyer obtaining all necessary documents needed for a title evaluation) required for First American Title certification, without setting the First American Title certification itself as a condition of the purchase. This can provide added peace of mind, without significantly extending the length of the purchase process and jeopardizing the sale. And First American Title certification can always be obtained after a positive legal opinion after the property is purchased.

12. Buyer or Buyer's Representative and Seller or Seller's Representative sign the Escritura (Deed) in front of the attorney. The attorney drafts a Testimonio (Affidavit) and registers both the Testimonio and Escritura at the local Registry. Typically, the buyer and his lawyer at this point authorize Serenity to release the funds to the seller and to other parties to be paid as specified by the promesa de venta, including payment of the 1% transfer tax to tax authorities. A new Escritura (title deed) in the buyer's name can take at least two months to be issued, at which point the property is officially the Buyer's, but sellers frequently allow buyer's to take immediate and full posession of the land after the closing. These and other terms for the physical transfer of the property can be set in the promesa de venta, during or after the closing.

13. Buyer receives a complimentary Leon or Matagalpa tourist map and an orientation “care package” and Serenity introduces the buyer to Serenity's after-purchase services, including property management (including payment of all monthly or annual electric, telephone, municipal taxes and other bills), architect referral and renovation and construction project monitoring services.

14. Optional: Buyer completes optional customer feedback survey. Serenity appreciates feedback from clients and always strives to do better.

MONEY TRANSFERS: U.S.

Serenity handles all transfers of funds from seller to buyer. Most Nicaraguan sellers prefer cash in hand at closing, but many also have bank accounts into which funds can be transferred. Before funds are transferred to the seller, they are transffered to our account in the U.S. International money transfer fees initiated from the U.S. can vary around $25, but international transfer fees initiated from capable banks here in Nicaragua (namely BanPro) can range up to 2.5% of the total transfer. In all cases, Serenity keeps copies and can e-mail scans of all receipts of money transfers to show documentation of the money transfer fee. PayPal can also be used in some cases, but it charges at least 2.9% for all transactions. For more details, please consult a Serenity representative.