Costa Rica Real Estate – Overpricing.

I have been following the Discussion Forum thread about overpricing and could not resist putting in my 2 cents for what it is worth. Most of what has been said here is true, in fact, this is just the tip of the iceberg.

The problem is actually a cultural one that is now being exploited by “real estate agents”, both Gringos, Ticos, Germans and Canadians, etc. Selling land in Costa Rica has always been mostly by word of mouth to relatives, friends and neighbors.

It is very common for a seller to tell me (or usually my Tico partner) “This is what I want to have in my pocket when the deal is done… Anything you can get over that price you can keep.” The seller is usually actually in agreement in the mark up of his property! We have to explain that we don’t work that way and here is why:

There Are Three Main Problems In Doing Business This Way:

1. The seller may tell 20 people this same thing, they tell their friends (each with their own mark up in place of course) and by the time you see the property with his uncle or a friend of his neighbor or even your agent, the price has risen (sometimes by 50% to 100%)
2. Foreigners see this as an opportunity to make a quick buck and if they are lacking in scruples there are all kinds of opportunities for taking advantage of this situation, especially with clients who are used to the high prices they see in some parts of the USA and Europe right now.
3. The poor guy who needed to sell for whatever reason is now stuck waiting for someone to pay the exorbitant prices that are now being asked.

It is a lose, lose situation for both buyer and seller, the only one who “wins” is the agent! … But even he loses because he makes 2 enemies with each sale, eventually word gets out and hopefully his business wont last long! It is a small country, but unfortunately as one broker told me; “There are several new plane loads of suckers (I mean clients) landing every day in Costa Rica!”

How Can You Protect Yourself?

1. Choose your agent by word of mouth references, not just advertisements on the internet or websites. Once you find a well recommended professional that you trust, tell them what you want and let them handle the details. (This is true of just about anything you do here in Costa Rica by the way.) Your agent will know other trustworthy professionals to get the deal completed.
[custom_script adID=151]
2. Be aware! Ticos are very friendly by nature and it is very hard to tell which ones are befriending you so they can take advantage of you in some way from the ones who would truly be your friend with nothing else expected. For that reason, it is always best to keep friendships and business separate… Use a professional! You would not try to buy property with the restaurant’s waiter as your agent in the US, why would you think that is appropriate here?
3. Ask your agent who is paying the commission and how much.. It is a fair question because in the end no matter what his answer may be, you are paying the commission!! The ‘Board of Real Estate Brokers’ which is the only government recognized association here in Costa Rica prohibits the practice of “sobre precio” or “Over Pricing” which is adding an amount over the asking price.
4. Ask to meet the seller if you are very interested in a property. Ask your agent if he thinks it would be appropriate to discuss price directly with the seller. There are a couple reasons this may not be appropriate or a good idea in every case, but you should be able to make your own judgment from his reaction. Though we are buyers agents and work a bit differently, we always try to get the buyer and seller together to negotiate price as well as who will pay what percentage of our commission and closing costs. This is just good business and most sellers are anxious to show off their properties as well as introduce you to neighbors and community features.
5. Don’t go around your agent, that isn’t fair either, he may have a lot of time and money invested in a listing and if someone else sells it he gets nothing. Plus you are setting yourself up to be ripped off.
6. If you do decide to look at a property that some friend of a friend has to offer, take your agent with you! You will have to pay his commission, but he will probably save you way more than that in money and heart aches in the end.

Use your head not your heart when viewing properties. Don’t fall in love with any property until it belongs to you. If things don’t seem quite right don’t be afraid to walk away, there are many more properties out there!

[custom_script adID=97]

Considering The Atenas Area For Your New Home In Costa Rica?

The AARP (American Association of Retired Persons) ranks Atenas as one of “The Best Places to Retire Abroad.” For more information about homes and land for sale in the area please contact our Recommended Realtors in Atenas by using the simple form below:

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.