5 Reasons NOT To Sign An Exclusive Listing Agreement When Selling Your Home In Costa Rica!

In many ways the system for buying and selling real estate in Costa Rica is similar to those in the United States and Canada.

However, there are some vital differences that can determine the success or failure of your real estate experience here in this tropical paradise. One of the most commonly asked questions and points of confusion our clients have is wether or not a seller should sign an exclusive listing agreement when selling their home.

An exclusive listing agreement is a contract between the seller of a property and a real estate sales professional or Realtor. This contract gives the sales professional the exclusive right to market the sellers property. It includes terms such as: beginning and ending date of the contract, listing price, commission percentage to be paid to the agent by the seller and permission for the agent to work with competing agents. It also allows agents to use marketing tools such as signs, flyers, the MLS, a lockbox as well as hosting open houses.

In the United States and Canada, an exclusive listing agreement is the only way to go. Having said that, in Costa Rica there are 5 reasons you should NOT sign an exclusive listing agreement when listing your property for sale.

1. 1. No Multiple Listings System (MLS)- No matter what you have read or found on the internet, Costa Rica does NOT have a MLS like the one used in the United States or Canada.The beauty of the MLS is that agents from all over the country have access to your listing. In a country like Costa Rica, without a functioning MLS, only the agent with the exclusive listing (if you sign one) has access to your valuable asset. In most cases, you virtually tie your own hands and waist precious time in the marketing of your property.

1. 1. Competing agent participation- In Costa Rica, when you sign a exclusive listing agreement, you are limiting participation by other agents in your area. Why? It all comes down to money. In the scenario of an exclusive listing agreement, the agents (buyers and sellers) will have to split the commission, 50/50.The reality is that 95% of all listings in Costa Rica are considered OPEN LISTINGS, meaning any and all agents can market a property (with the owners approval). The agent who sells the property earns 100% of the commission. If an agent has 10 properties that they could show clients and earn 100% of the commission, why would they show an exclusively listed property by another agent and only earn 50% of the commission?

1. 1. Listing exposure- The biggest downfall of listing your property ‘exclusively’ in a system where open listings are the most common form of listing a property is that you limit your exposure to potential buyers. Exposure is vitally important, especially in Costa Rica where the majority of potential clients are using the internet to locate their future home.

      As a seller, you want to gain the widest range of exposure possible. Interview all the agents in your area and list your property with everyone you feel that is qualified in assisting you to get your property sold!

2. Lack of agent experience/ethics- Unfortunately, real estate licensing does not exist in Costa Rica. What does that mean to you as a seller in Costa Rica? It means that anyone can open an office, put out a shingle and be a ‘realtor’. It is very possible that your sales ‘professional’ has never worked in the real estate field. It may also mean that your agent does not have sales experience of any kind, and may not have taken a real estate sales or ethics course.It is also very possible they do not know anything about local laws rules or regulations. Worse yet, they may not even speak the local language, Spanish.

For Sale By Owner (FSBO)- I will be the first person to point out to any seller why they SHOULD list their property with a real estate sales professional instead of trying to sell it on their own. However, a seller should have the right to try selling their own property.

If you sign an exclusive listing agreement, you cannot sell your house on your own without paying the agent their commission. The beauty of having an open listing is that you can also market your own property and avoid paying a commission if you find the buyer by yourself.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.