You are advised to use the services of a real estate broker to buy or sell property in Costa Rica. Real estate agents normally collect a five or six percent commission on the sale of a home and up to 10 percent commission on the sale of raw land. This won’t be much of your concern, since broker fees are usually paid by the seller. Occasionally, however, a broker will try to charge you a per diem.
Up-front fees can be merited in some exceptional situations, depending on the work you want the broker to do. Driving customers out to remote fincas on windy dirt roads every week for several months, for example, is tough work. On the other hand, the vast majority of brokers do no such thing (lots of them will ask you to do the driving), and brokers who ask for up-front fees should be avoided.
Your Costa Rica real estate broker
Your broker plays generally the same role as a broker in any other country. That is, he or she will help you with the process of checking market values and finding a property that fits your specifications. Once you find the property and meet the owner, the broker will assist in the negotiations.
Remember that though the broker earns a percent commission on the property you buy, the broker is supposed to be working for you. A broker with a history in the country and a good reputation will, in theory, have an interest in getting you the best price and maintaining that reputation.
That said, there is certainly an incentive for the broker to try to nudge the price up, since the commission is a percentage of the sale price. It’s not at all uncommon for brokers to persist in showing you properties that push the upper limits of your price range. Therefore, don’t be afraid to push for good service. A good broker with good references and a good reputation to uphold will be able to give it to you readily.
There can be some overlap between the tasks of your broker and your lawyer. Negotiations and the drafting of the sales agreement, for example, are things that can be done by a broker, but are often done by the lawyer. While that means you’re paying for it when your lawyer does these tasks, sometimes that’s exactly the point: There are fewer ambiguities about where your lawyer’s loyalty lies.
8 reasons to work with a good Real Estate broker in Costa Rica
1. A good broker can help you find a fair-priced property.
2 Only a small percentage of properties for sale are in the newspaper. A lot of brokers have their own listings, which they don’t share with other brokers.
3.A broker can save you time and aggravation by showing you just what you want. He will do this by pre-qualifying you.
4. Good brokers have excellent contacts and will help you with every step of the process.
5. A good broker will know all of the good areas and will not waste your time showing you undesirable neighborhoods. A broker who knows you are working faithfully with him will go all out to help you find what you want. Be sure and to tell your broker from the beginning if you are working with other agents.
6. A good broker can form a relationship with you and truly understand your specific needs.
7. Working with a broker in Costa Rica is similar to working with a broker back home. If you are patient, loyal and have confidence in your broker, you will find what you want.
8. Brokers offer a wide range of properties. They sell a little bit of everything: houses, lots, commercial property, condos, and even fincas (farms). Therefore, it is best to find a broker who specializes in exactly what you are looking for. A person who sells at the beach cannot possibly be an expert in properties in the Central Valley.
One of the most infamous and inconvenient characteristics of the Costa Rican real estate market is that the law does not regulate real estate brokers. Anyone can sell you a property, and everyone will probably try to. Deals have been found through taxi drivers, but so have scams and endless run-arounds.
Even if you’re looking to purchase something from a development with its own sales office, it’s a good idea to ask a broker to help you decide which development. Though picking a good one from the mass of mediocre ones seems like a daunting task, it’s doable.
Six top tips on finding a good real estate broker
1. Shop around
You wouldn’t buy the first car you test drive, and you shouldn’t go with the first broker you lay eyes on. Talk to at least two or three. They can be found on the Internet, in local offices, in real estate guides, and through recommendations. Personality is very important, and if you don’t get along with your broker, the buying experience will be a miserable one.
2. Communication
Just as in a marriage, communication is a key component of the relationship between a homeowner and an agent. If the communication isn’t there, the relationship won’t work. So if your agent doesn’t return your phone calls in a timely fashion or disappears without warning for weeks at a time, you should probably find someone else.
3. Stay local
Pick a broker who specializes in the area where you want to buy. Since there is no MLS in Costa Rica, local connections are very important, especially if you’re looking for raw land.
Even homeowners who have been through several real estate transactions can benefit from a little advice from their agent. But if an agent doesn’t offer any advice, it could be an indication that he or she is not fully engaged in the process.
4. Go bicultural
Most non-Costa Rican brokers can spit out a few words of Spanish, and some speak fairly well. The ideal broker, however, understands both the language and the culture, or has teamed up with another broker who does.
5. Demand residency
Ask that agent to show you their Costa Rican cédula (ID) or work permit. Ask how long the agent has lived in Costa Rica (5-7 years minimum). Costa Rica has a history of so-called “tail-gate realtors,” or foreigners that parachute in, sell a few properties while here on a tourist visa, and leave whenever they want.
6. Be careful
Most younger U.S. Americans who sell real estate do not have a pension or other sources of income, so they depend on commissions to make a living. Therefore, many are overly zealous and may try to pressure you into buying something.
Selling real estate in Costa Rica
It seems that everyone is selling property in Costa Rica: cab drivers, waiters in restaurants, your friendly gringo neighbor, hotel employees and others. Even fugitives have gotten into act. One online newspaper, reported on that a U.S. citizen on the lam was arrested while working as real estate broker in an office on the Pacific Coast. Many U.S. citizens are work illegally in the real estate business just because of their English-language abilities. Avoid them.
Today, the market is mature enough that most regions have at least one broker who’s been here for years and has Costa Rican residency. This is a sign of commitment to reputation and to the country, and it should figure importantly in your final decision. If your real estate agent is actually a waiter, waitress, or another profession, then you are probably not going to be happy with where their priorities are.
Two final points to remember
1. Ask for references
Satisfied customers are a good sign that a broker is doing his or her job. Request contacts for a few and ring them up. Be sure to ask what the customer didn’t like about the broker as well. Google the agent’s name and see what comes up.
2. Brand isn’t everything
All the big U.S. real estate brands are in Costa Rica: Century 21, ReMAX, ERA, Coldwell Banker. Remember, though, that just because brokers have offices with fancy signs doesn’t mean they know what they’re doing. On the upside, branded brokerages often communicate with their other franchises in the country and offer you a bigger pool of product.
On the downside, many of them are newbies in the country who simply bought a franchise. Some branded brokers are good and some are bad, just like everyone else in the country. Experience in the market and good referrals should be more important to you than brand.
About the Author
Christopher Howard has been conducting monthly relocation/retirement tours and writing retirement guidebooks for more than 30 years.For tour information see: www.liveincostarica.com.
He has a #1 relocation/retirement blog at: http://www.liveincostarica.com/blog, is also the author of the forthcoming 18th edition of “New Golden Door to Retirement and Living in Costa Rica — the official guide to relocation” and the one-of-a-kind bestselling e-book, “Guide to Costa Rican Spanish,” that can be purchased through Amazon.
Christopher’s most recent publication is –“The Costa Rica Chronicles from 1980 on: the good, bad and ugly people and places”— available through www.costaricabooks.com and soon from amazon.com.
