VII. When You Find a Parcel that Interests You

A. Initiate preliminary discussions.

After you visit a property that interests you, the initial discussions are a time to learn as much as possible about the land. Hopefully, you will get to know the owner, and learn about the people who are involved in the land sale. If you are not meeting with the owner, why not? Does one person seem to dominate the conversation - giving you quick, overly simplistic answers?

Everyone will be sizing you up as well. Lombok culture functions on a loose cast system. Even names carry titles that indicate who comes from a respected family and who has the name of a commoner. You are a stranger and will be judged on your composure and body language. Make sure you shake everybody's hand. Being able to speak a few words of greeting in Bahasa Indonesia leaves a good impression, as does wearing respectable clothing.

This is a time for getting to know the owner of the land, and get acclimated to the family and village surrounding you. What is his motivation for selling? If he needs money, how much? All of this information is important when you get to the negotiation stage. If the owner needs half the selling price of the land quickly, then you may wish to pay him the amount he needs quickly, and make a second payment in a year. All of this is important for the negotiation process which will happen later. Your partner should be with you. A good translator is of vital importance. You will be hearing many people talking in languages that you do not understand. This can be as meaningless as idle chit-chat or something important, such as someone telling the owner to raise the price of land because you are a rich person. You need someone on your side and you need to talk to this person privately at times. So do not be afraid to simply stop the conversation and speak with your translator/ partner privately - asking their honest opinion.

B. Find out about the history of the land.

The one issue that should always be at the forefront of your thinking is the issue of clear ownership. The important thing for you to realize at this point is that a parcel of land can never become the property of your partner until a Land Certificate is issued from the Government Land Office (BPN). You will have a period of time later in the process to research of the property's history of ownership. This is a complex issue, discussed in a separate Section entitled, "Due Diligence and Full Research". However, from the very beginning you must maintain a healthy skepticism that this could possibly be a scam.

Does the land have a certificate now? Are there other people on the certificate besides the one owner? Does the owner have any other family member that is laying claim to the land? Are there any issues he wants to talk about now that will be discovered later? Have him show you the corners of the land. Try to appear both interested but concerned in the land. You never want to give the early impression that you really have a strong desire to buy the land. You still have many steps to take and you want to be able to walk away without anyone feeling guilty or disappointed.

C. Get to know all the Players.

The sales person (agent) showed you the land will be in attendance. But who are the other people in the room? Anybody who has a vested interest in the property (such as middlemen) will also be in attendance. Don't let them hide in a corner. Write down names and exactly how they are involved in the process.

Be careful who you listen to for advice. Almost everyone at the table will make money if you buy the land. They all have a natural bias to make everything seem wonderful.

Listen for quips like, "we have another family who wants to buy this land right now". This is a high-pressure sales technique and should cause a warning light should go off in your head. Your response should be, "I am not interested in talking about buying land that already has a buyer." Use these opportunities to make it clear that you are in charge and will not work with anyone who uses these subtle pressure techniques. If it starts now, left unchecked it will only get worse later.

D. Tread Lightly on Setting a Price and Making a Commitment

During these first meetings, everyone will undoubtedly want to discuss the price of the land. Everyone at the meeting will want to settle the price and 'close the deal'. I have included a separate section entitled, "Negotiate the price of the land". I have suggested several strategies based on the premise that patience can pay dividends when seeking a lower price. Depending upon your situation, the landowner’s situation and input from your partner, you should start thinking about a strategy for negotiations.

I have been in situations where a fast negotiation is necessary because the owner needs the money quickly. I also have been in situations where a long, delayed negotiation is necessary. On both occasions the result was final sales price was substantially lower than market value. It is up to you to read the tea leaves in your particular situation.

Regardless of the circumstance, never agree to settle the negotiations until the due diligence process has been completed. Research may uncover a huge problem, such as the need to pay a neighbor big money for access rights across his property. What you thought was a bargain price may turn into a disaster.

The Perfect Parcel

I.Important Facts to Consider

A.Is ownership risky?

B.Lombok: A Different Culture

C.Living on Lombok

II.Summary Steps to Buying Land

A. Get familiar with Lombok

B. Choosing a Partner("Nominee")

C. Find a parcel of Land

D. When You Find a Parcel

E. Negotiate the Price

F. Comprehensive Due Diligence.

G. Initiate Title Transfer.

H. Issuance Land Certificate

III. Visit All Lombok First

A. From Tourist to Resident

B. Explore the Hidden Lombok

C. Starting a Checklist

IV. Legal Issues

A. The Issue of Ownership

B. Foreigners Solve the Problem

C. The Nominee Method

D. Foreign Direct Investment(PMA)

E. One Final Option

V. Choose Partner and Team

A. Start Looking Early

B. Wide Variety of Skills

C. Other Trustworthy People

D. Check if Trustworthy

VI. Places that Sell Land

A. General Warnings

B. Real Estate Companies and Websites

C. The Local Tour Guide

E. The Local Gossip Mill

F. Miscellaneous Sources

VII. When You Find a a Parcel

A. Initiate Early Discussions

B. The history of the land

C. Get to know the Players

D. Slowly Get to the Price

VIII. Through an Engineer's Eyes

A. Clear access

B. Public facilities

C. Everything Belongs to you?

D. Check the Drainage

E. Check the Stability

F. Double Check Everything

IX. Settle Price and Terms

A. Necessary Preparations

B. Establish Proper Atmosphere

C. Conduct the Negotiations

D. The Issue of Parcel Size

E. Money is Not the Only Issue

F. Giving a Deposit?

X. The Written Agreement

A. How do I Pay Money?

XI. Due Diligence and Research

A. Risk versus Benefit

B. Due Diligence

C. Checking Public Records

D. Digging for the Unwritten Truth

XII.The Notaris Office

A. Settling the Final Terms

B. Notaris - Initiate Title Transfer

C. Sign the Nominee Agreement

XIII. Finally a Certificate