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I love this website and have read it for years because nearly all the articles are done by real folks living in Costa Rica. On the other side of the coin I normally get 2 email newsletters per DAY from International Living about the secrets (not much of a secret if they are telling hundreds of thousands of people) to living in one of 2-3 dozens countries that they are supposed to be experts in but wanted to just tell you guys something which I heard privately from one of the seminar speakers and it is not something that International Living readers know. Did you know that they are paid 10% commission on the sales of property that they push in their newsletters? TEN PERCENT? Did you know that?
That does sound outrageously high but I have heard of other real estate marketing organizations that charge that amount ….
I don’t suppose it’s possible for you to tell us who told you that?
Scott Oliver – Founder
WeLoveCostaRica.comdixon
10% seems high.. but maybe they deserve it. i think here its 3 to 5% depending.. lets ask admin.. how much comission he gets for recommending properties here on his website.
Im sure it will fall under the norm.. 3% to 5%.. NOT 10%
Folks, I think you’re comparing mangoes and papayas. While conventional real estate commisstions may hover in the 3 – 7% range, commissions paid to salespersons in non-traditional markets are typically much higher. I know that’s true for timeshare sellers, for instance and I’m pretty sure it’s true for sellers of mobile homes.
I have also heard that International Living does make 10% on property that it sells.
If you ever really look into what they sell, it is usually far away from the locals.
Sometimes in very remote areas. Of course I can’t substantiate this but a gentleman I sat next to on a plane, told me he was an investor and had purchased property in Nicaragua. He told me that IL did make 10% on all sales, that is why they market so heavily in so many areas of the world.Celeste
5% seems to be the norm in CR for whoever brings the sale to the owner. Even if it is two people they split it. Some of the realtors charge 6%, which is customary in the US (6% on 1st $100,000 and 3% on the balance is standard).
Sales commissions in the more remote areas of Costa Rica do go as high as 10% but at least they are making the sale.
I’m guessing here but if IL charges a 10% commission simply for making the referral and a salesperson then has to make the sale and also earn a commission, one has to wonder what ‘deal’ the buyer ends up getting…
Scott Oliver – Founder
WeLoveCostaRica.comI guess a 10% commission isn’t all that unreasonable when the underlying property is grossly overpriced. And I’m sure in the good old days there was no problem finding lots of buyers as Barnum put it! I also get their mailings… all the “secrets”… only to find they’re all available for free on sites like this!
I know that at least one company charges 10% to promote property out of the Central Vally, and then they give directions and pocket the commission!
I guess this article in the 13th March 2011 issue of Smart Money magazine would confirm that….
“For years, developers and brokers say, International Living made a commission on sales it promoted through its publications, website or conferences. Developer Sam Taliaferro, who built Valle Escondido, Panama’s first gated community (home values: $250,000 to $5 million), says that for a 10 percent cut of sales, International Living brought couples to the secluded mountain site. Dan Prescher, special projects editor for International Living, says the publication received a percentage of sales from developers like Taliaferro in the past. He says that in a move to give the magazine more editorial independence, starting in 2007 those deals were sent to a newly created company, Pathfinder International. But the companies still do business with each other: Pathfinder says it vets developers who advertise in International Living and speak at its conferences—and that it pays promotional fees to International Living.”
If I could have earned 10% – although I couldn’t sleep at night if I did – on all the real estate sales I’ve been a part of over the last seven years it would be a REALLY big number…
Scott
scott
i am always amazed at your skewed viewpoint although i find it amusing at times. but you make a statement below would not be able to sleep at night if you made 10%
what % is deemed ok and who defines that?? i mean if you touted a legit fund and it made 20% would you then not take it because 20% was too much for you.. so if it was 10% you would sleep good
how silly does that sound
If I could have earned 10% – although I couldn’t sleep at night if I did – on all the real estate sales I’ve been a part of over the last seven years it would be a REALLY big number…
Scott[/quote]
Clearly I am amazed at your “skewed viewpoint” as you are at mine ‘smekuly’…
What is “deemed OK” in real estate sales is normally defined by organizations like the National Association of Realtors and other real estate organizations.
Your analogy with investment funds is simply not valid… We’re not comparing performance of a fund or the appreciation of your real estate, we’re comparing the cost to enter a market so why not compare the commission paid to enter an investment fund by two investors?
When the norm for a performance based hedge fund might be a 2% annual fee plus a 20% performance fee, you would be happy paying double that amount?
Getting back to real estate, most real estate buyers I know would feel totally ripped off if they were paying 10% which is double the industry average in sales commission when they bought a property.
I’m delighted – but certainly find it incredibly “silly” – that you are happy to pay double what most people are willing to pay.
Anybody else in the forum willing to pay a 10% sales commission when you a buy a home when it’s rare to pay more than 5%?
And tell me, had you just bought a home for $250K, how well would you sleep at night knowing you paid US$12,500 more than one of your neighbours who had a similar home but didn’t buy it through the same source?
Scott Oliver
scott
thank you for your reply. your bring up some good points but superficially. why?
because you also have to factor in liquidity and what market you are talking about.
for example and I am just making this up as I go.
you seem to be attempting to sell your mountain house and I do NOT know if its sold yet or not but if it sat on the market for a long time and I came to you and said scott I can sell your house tomorrow with a cash offer to my inhouse list because I have a website that specializes in exactly the niche type of mountain house. but unfortunetly my commission will be 10%.
now you at this point depending on your market situation will make a decision either yes.. or no.
if you say yes and take the deal and pay me more commission then i provided you a service and I would have no problem sleeping at night.
because i did all the work to build my website and specialized list. the credibility to my list.
just like you do with this site.
am I just crazy..
again some people may willingly pay the extra 5% to move the house in an otherwise NON liquid market.. while others who are in better shape financially may just say no to the deal and will just sit on it.
I certainly appreciate that under special circumstances a real estate seller is free to negotiate an exceptional agreement with a marketing firm to sell their product, but this was the standard operating procedure and not special circumstances or a case of poor liquidity.
Scott
PS. Everything I own is for sale, it just depends on the price…
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