Real Estate 101: Start With a Pro
Buying a home in Costa Rica can be a daunting task. The complexity of this task is multiplied exponentially when the buyer is new to the country, does not speak Spanish and is not familiar with the idiosyncrasies of the country’s property laws. Real estate agents specialized in helping North Americans and Europeans buy homes in Costa Rica stress the importance of prior research and seeking the advice of professionals with a proven track record of helping people successfully relocate to the country.
Learn What You Want
Real estate agents interviewed by The Tico Times recommended that, before seriously considering purchasing a home or property, potential buyers take the time to conduct research on Costa Rica and, if possible, travel around to see the different parts of the country and what they offer in terms of geography, climate and amenities.
“The first thing I would recommend is to have an idea of what you’re looking for,” said Brad Dukes, an agent with ERA Costa Rica (2666-5103, www.costaricaera.com) specializing in the northwestern part of the country, including the Guanacaste province.
“Have an idea before you come to the country about the different areas and the price range you are looking at. There are so many aspects and possibilities that it’s good to have some sort of idea before you get here.”
Linda Gray of Coldwell Banker Beach Properties of Costa Rica (2670-0807, www.coldwellbankerbeachproperties.com), who also specializes in Guanacaste, agrees. “First, feel comfortable with the location,” she said. “Plan a trip and travel around the country. Do research in terms of rain and weather to find the right place.”
Despite its small size, Costa Rica offers diverse options in terms of places to live.
There is a great deal of variation in climate, geography and social environments even within the three main types of locations – mountain, beach or urban. Buyers should also evaluate their needs and gauge just how far away they are willing to be from urban amenities such as supermarkets and vital services such as schools and hospitals.
Sean McGraw, owner-broker of Coldwell Banker Vesta Group Dominical (2787-0223, www.cb-dominical.com), which specializes in the central and southern Pacific coast, stressed the need for buyers to develop a clear idea of what they are in the market for.
“Define what your needs are,” McGraw said. “It is important to have clear what you need in terms of schools, infrastructure, access and social services.”
Distances can be deceiving in Costa Rica, and the farther one goes from the major population centers, the more complicated life can become.
“The biggest problem for retirees or people moving to the country is that what looks close on a map may not be very close,” said Brad Butler, owner of Emerald Forest Properties (2267-6360, www.emeraldforest properties.com). “People here may not realize just how long it takes to get from one place to another.”
Karen Ebank of Karen Real Estate (2282- 4191, www.karenrealestate.com) recommends that people rent in their chosen area before buying to make sure it’s truly the right fit.
Russ Martin, marketing manager for American-European Real Estate Group Costa Rica (2229-7228, www.american-european.net) stressed the importance of the potential buyer getting to know the local expatriate community in the places being considered to make sure he or she fits in.
Butler also stressed the social component of finding a place to move to.
“It’s always good to establish connection with a group of people who are living here already,” he said. “To move here and isolate here you really create a rough life.”
Ebank also recommends taking at least some basic Spanish lessons.
“It’s not (necessary), but it helps you get by on a day-to-day basis,” she said.
Play It Safe; Get a Pro
Once potential buyers have narrowed down the options and know where to look, it’s time to hire an experienced, competent professional to help find the right home, negotiate the right price and seal the deal.
Experienced real estate agents consulted by The Tico Times stressed the need for buyers to be aware of the key differences between the real estate industries in Costa Rica and other countries. For starters, the Costa Rican real estate industry is not regulated by any national or regional oversight body as is the case in the United States.
Anyone in the country can legally serve as a real estate agent without having to meet any basic proficiency standards or take any classes.
“There are 4 million people in Costa Rica and 4 million of them think they can be real estate agents,” said Manuel Pinto, a broker with American-European specializing in the southern Caribbean region (2759-9138).
Given that there is no organization charged with reprimanding and weeding out problematic agents, it is crucial to seek out a broker with strong references and a proven track record. Potential buyers should look for agents who are members of the country’s two voluntary brokers’ associations – the Costa Rican Chamber of Real Estate Agents and the upstart Costa Rica Global Association of Real Estate.
“The person should get advice from a reputable real estate broker,” said Mercedes Castro of First Realty Costa Rica (2220-3100), former president of the chamber. “In Costa Rica, given that there is no legislation, there is a lot of misrepresentation in real estate. A lot of people try to be part-time brokers.”
Ana Luisa Zúñiga of Real Properties (2228-0154), which specializes in the western Central Valley, stressed the importance of hiring an agent with experience in the zone in which you are interested in buying.
“Brokers in Costa Rica are very localized,” she said.
Butler emphasized the human element in choosing a real estate agent.
“Use your gut feeling,” Butler said. “If you connect with an agent, great. If you don’t, find one you can connect with.”
Because Costa Rica does not have official real estate organizations sanctioned by the government, there are no official Multiple Listing Services like those found in the United States. To ensure they have access to the full range of properties in the area they are considering, potential buyers should look for brokers who collaborate with other brokers.
Agents also stressed the need to find an agent willing to introduce the buyer to attorneys, dentists and doctors in the country.
“If an agent is not willing to do that, he’s probably not a good agent,” Butler said.
The Art of the Deal
Brokers interviewed stressed the need for caution when buying a home. Zúñiga recommended that buyers be prepared to bargain.
“The asking price is generally a little higher than the real price,” she said. “It’s good to make a counter offer.”
Given the magnitude of this type of purchase, it is important for buyers to keep a cool head.
“Be cautious – no reason to be quick,” McGraw said. “There are opportunities, but it is necessary to assess the risk.”
Another key difference between Costa Rica and the United States is the importance of the National Registry, where records of property ownership everywhere in the country are centralized. A listing in the registry constitutes the only valid proof of ownership of a property in the country. Before buying, it is necessary to conduct a study in the National Registry to confirm that the person selling the property is its legitimate owner and authorized to sell it.
“The biggest thing with foreigners when they come here is that they don’t do research,” ERA’s Dukes said. “That’s how they get bad deals or end up buying a property that’s not a property.”
It is also crucial to make sure that once a deal is signed, the sale gets registered.
“In the National Registry, it’s first in time and first in right,” Martin of American-European said. “For that reason, it is important to make sure your lawyer will put through the documents immediately.”
Selling a home can be a whole other business, though many of the same tips apply. Potential sellers are advised to do their research, understand the market in which they are selling and seek the advice of qualified experts.
“Educate yourself in the local market,” McGraw said. “Listen to people who know the market and understand what’s going on in other markets, including foreign ones. Don’t rely on a neighbor or a driver.”
Once again, Zúñiga emphasized the need to hire an experienced real estate agent you can trust. She also recommends arming yourself with patience, as it generally takes three to six months for a home to sell.
An honest real estate broker is one who will give you a realistic assessment of your home’s value and how long it will take for it to sell.
“A company should tell the owner not what he wants to hear, but the true value of the property,” said Gray of Coldwell Banker Beach Properties.
Commissions for selling a home are negotiable on an individual basis, but generally average between 4 and 6 percent of the sale value, according to agents consulted (see separate story).
You may be interested
Biden says nearly half of world leaders asking for US vaccine helpAFP - May 11, 2021
President Joe Biden said Tuesday that almost half the world's leaders have contacted him, asking for US help in obtaining…
Costa Rica coronavirus updates for Tuesday, May 11The Tico Times - May 11, 2021
Costa Rica registered 2,555 new cases of Covid-19 on Wednesday May 5; 2,559 on Thursday, May 6; 2,392 on Friday,…
Costa Rica beats the USA, wins third consecutive futsal titleAlejandro Zúñiga - May 11, 2021
The Costa Rica men's futsal team won its third-straight CONCACAF title with a 3-2 victory over the United States on…