Costa Rica Real Estate – ‘Value’ & ‘Price’ Are Not the Same.

It’s no secret that the market, supply and demand, affects property sales and purchase. People’s wants and needs come together to produce a price that should satisfy all interested parties.

For Jose Luis Barzuna, president of the AISA Architects and Engineers Association, value represents what the building cost. However, the price is what one is willing to pay for that building. “A house may have high-quality finishing details that raise its value, but maybe as a buyer, I am not willing to pay for them, so I offer a price that does not cover those details,” explains Barzuna.

Similarly, an old house with a lower market value, can go for a lot more if it has a recognised historical value. “However, one has to be very clear that Costa Rica is a market dominated by price, and not by quality,” continues Barzuna. Therefore, at some stage you face the challenge of how to build the best possible house for the least money.

There are standardized budget tables indicating costs of materials in plan specifications and engineers calculate their budget based on average working output of the labourers. These tables help the professionals calculate the value that a specific building will have.

However, the price for which you will sell that building won’t necessarily be the same since much depends on the supply and demand in the area where the building is located.

Professionals in the real estate industry try to determine price with greater precision. Without experience, however, it is common for the buyer to have doubts about what a fair price is, and the seller gets nervous about whether the agreed value is sufficient.

For this reason, a building’s valuation is vital to estimate its value within the market, be that a new or old house or a plot of land.

This valuation is also useful when dividing up inherited estates, preparing mortgages, rental contracts and for valuing shares. The best advice is that before selling or buying, you are guided by an qualified consultant or an experienced real estate agent.

Key Points:

1. To determine the value of a property, follow certain steps but always be advised by a professional.

2. Have a detailed description of the materials used.

3. Work out the value of labor according to average performance.

4. Assess location of the plot and access to public services.

Our thanks to Pablo Fonseca and our friends at La Nacion – Costa Rica’s largest Spanish circulation newspaper for their permission to use this article.

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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.