Costa Rica Real estate basics:
Costa Rica has an underdeveloped, unregulated real estate market, sellers and buyers’ decisions are sometimes emotional and influenced by cultural behavior.
Unless you are familiarized with the community where you are buying because you have been living there for some time (leasing) or have inside information, we recommend selling or buying through a broker.
Real estate agents and brokers in Costa Rica often times operate as transactional brokers (single agency) and are not required to disclose their representation so either assume he is representing both parties or ask to make sure you are been properly represented.
Costa Rica is an unregulated market were real estate brokers and agents are not bound to a license requirement (update: brokers are now required to register with SUGEF, the entity that oversee the financial institutions, they only control the origin of funds on the transactions and not operational procedures or ethics in real estate).
The lack of an MLS system generates many challenges, so real estate agents control the information, it makes a difference how long they have been actively selling properties in the area that you are interested.
Timing makes a difference: agents and brokers are in constant communication with sellers and buyers and know how motivated they are, historical data like offers made and rejected (if any) and much more details that would bring both parties closer to a transaction.
We recommend paying good commission to overcome the lack of an MLS system that facilitates seller and buyers’ having direct contact, instead many times they connect through third parties and there might be referrals involved also. Paying a high commission fee the seller makes sure that all the parties involved may get a good share and stay motivated to show your properties (ethics dilemma).
Keep in mind the real estate market in Costa Rica is much slower so closing is usually measured by months on the market instead of days on the market (DOM), if not priced correctly it will be years on the market.
Even when it is highly unusual, signing a buyer’s representation agreement is highly recommended, guaranteeing your broker a specific commission will open the door for properties promoted by developers or owners that don’t work with brokers, sometimes excellent options. You might not even need to pay a commission at the end as it could come from the seller’s side.
Request a full disclosure on the purchase and sales agreement so you are aware of all parties getting a share of the commission and request a formal invoice to all of them (factura electronica)
All information is intended as a general guide only, please verify all information before making decisions. Pictures for illustrative purposes only. If you find inaccuracies on the information please reach out to us and provide supporting information. Copyright © 2020 IMINDS Brokers S.A. All rights reserved.