Finding a Broker
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. In general, this commission is paid by the seller of
the property to the realtor.
After you decide where you want to live and what you want to buy, then
select a broker. This can pose a problem because no one needs a license to
sell real real estate in Costa Rica. 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 runarounds. 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 choose the development. Though picking a good one from the
mass of mediocre ones seems like a daunting task, it’s doable.
Since selling real estate is in vogue and there are a lot of gringo opportunists
looking to make a quick buck it may be hard to find an agent who looks out
for your interests more than just making a sale.
On top of that many foreigners who sell property here aren’t even legal
residents of Costa Rica and don’t have permission to work. Would you buy real
estate from a tourist in the U.S. or Canada? Some of these characters just come
down for the high season to sell properties and then disappear into the wood
work. If you need to find them for anything, you can’t. Also many of these people
have never had any experience working in real estate in their home country.
It seems that everyone is selling property in Costa Rica: cab drivers,
waiters in restaurants, your friendly gringo neighbor, hotel employees and a
lot of people without papers as I just mentioned. Even fugitives have gotten
into act. The AM Costa Rica on-line newspaper reported on September
3, 2008 than a U.S. citizen on the lam was arrested while working as real
estate broker in an office on the Pacific Coast. In December 2005 and in
December 2007 two other gringos wanted in the U.S. were arrested here.
Both had been working as real estate salesmen. Many U.S. citizens are hired
illegally in the real estate business because of their English-language abilities.
Bad brokers come in three flavors: the incompetent, the dishonest, and,
most commonly, those who are both incompetent and dishonest. To make
matters worse, some brokers are working here illegally, either because they
haven’t established legal residency and therefore aren’t allowed to work or
because their company has not been legally incorporated. Incompetent,
dishonest realtors are all attracted by the lure of making a quick buck. And,
if they are here illegally and have no investment in the country or family ties
here, then there is nothing to prevent them from skipping town after having
committed a malfeasance.
The most common trick of the trade—unethical but not illegal—is
to sell property at a higher price than the asking price and to pocket the
difference. Another common misdeed is to claim something about the
property that isn’t true (e.g., that it has access to water) or to conceal some
problem with the property (e.g., problems with title). Perhaps the most
common fraud is committed when someone poses as a property owner
(or as an agent of the owner) and sells land that doesn’t belong to the
putative “owner.” Again, you can avoid all these problems by relying on
common sense, acting prudently, and relying on the services of a lawyer
who specializes in property law.
Since the real estate industry is virtually unregulated—business and contract
laws do apply to real estate deals as well—you might find that realtors
are especially zealous and wary when it comes to ensuring that they receive
their commissions. After all, if the seller refuses to pay the commission, the
broker doesn’t have a regulatory body to back him up and his only recourse
would be to file a lawsuit. So, you’ll need to understand the broker’s position,
and work with all parties involved to allay any concerns the broker might
have about not getting paid.
A good broker, indeed any professional salesperson, must have good
listening skills. If you meet with a broker and describe exactly what kind of
property you are looking for, then find that the broker proceeds to show you
five properties that don’t match your description at all, it’s time to move on.
This is why it is important to work with a good broker:
1. A good broker can help you find a fairly-priced property.
2. Only a small percentage of properties for sale are advertised 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 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.
In order to find a competent, honest broker, it is wise to talk to other
expatriates or contact the local Chamber of Real Estate Brokers or Cámara
Costarricense de Bienes Raíces.
Here are more tips on finding a good 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, through recommendations and in the resource section
of this book. 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.
(4) 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.
(5) Go bicultural: Most 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
(6) 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.
(7) 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.
(8) 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.
Do an Internet search on the agent’s name and see what comes up.
(9) Brand isn’t everything: All the big U.S. real estate brands are in Costa Rica:
Century 21, RE/MAX, ERA, Coldwell Banker. Remember, though, 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 may be newbies in the country
who simply bought a franchise. Some branded brokers are good and some
are bad, just like everyone else in the industry. Experience in the market
and good referrals should be more important to you than brand.
(10) Ask how long the agent has lived in Costa Rica (5-7 years minimum)
(11) Ask for a few happy customers to contact.
(12) 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.
(13) Let’s face it, 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.
(14) Real estate agents who insist on clients’ using a particular lender or affiliated
company for the transaction may trigger alarm bells. That’s a huge
red flag because odds are they are probably getting a cut on a referral fee.
(15) 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
(16) A real estate agent who shows buyers only properties that are listed
with his or her brokerage could be subordinating the client’s best interests.
Since selling agents earn a separate commission off a real estate
transaction, agents who make listings available just from their company
may be trying to steer that commission to the brokerage as well.
As I mention repeatedly above, the real estate industry is not regulated
here as it is in the United States. So, it is sometimes hard to find a good
broker in Costa Rica. Fortunately, one of the companies I recommend
contacting is Costa Rica Retirement Vacation Property. They have more
than 35 years of combined experience in the real estate market and have
helped thousands of people make safe and profitable investments and find
success here. Costa Rica Retirement Vacation Properties toll-free 1-888-
581-1786, E-mail: email@example.com.
Cayman Real Estate & Vacation Rental Properties