Why is it Important to Work with an Experienced Real Estate Agent and Long-Standing Real Estate Company in Costa Rica?
Most buyers and sellers in the coastal regions of Costa Rica are not native to the area. So it seems like common sense that you would seek out advice from a seasoned and professional agent who works in a well-established agency to guide you through the purchase or sale process of a property in a foreign country. I think we would all agree with that statement so far.
Suffice it to say that most real estate agents and real estate companies will claim they are the wisest and most knowledgeable. There are definitely quality individuals and companies operating in the Papagayo area and beyond. During a hot real estate market, the number of agents working increases and the number of inexperienced agents goes up as well. It is not too hard to put together a good website and present yourself in a good light, and sound like you are knowledgeable, to the unknowing client. Especially since the laws and customs for buying and selling real estate in Costa Rica are probably much different from what you are accustomed to, that could cause you not to notice that you are working with an experienced person right away.
There are some basic things that you should require from your realtor in order to feel comfortable with who you are working with. Don’t feel shy to ask the person you are potentially going to trust with one of the most important transactions of your life to provide this information. Your realtor should be at the minimum:
- A legal permanent resident of Costa Rica with full rights to live and work in the country
- A member of either Costa Rica Realtor Boards — CRGAR or CCCBR
We go into great detail about the need to work with a licensed real estate agent in another blog post here.
- Registered with the financial regulatory agency SUGEF
If the answer to any of these questions is no, then you should strongly consider cutting ties with that person and find another agent to help you. You may have been referred to your realtor by a friend or through a local person that you trust, as you might anywhere else. And they probably had a good experience with that agent or they would not have referred them to you.
That does not mean that your transaction is the same. It might be totally different, requiring the keen eye of a true expert to guide you through any potential pitfall. There are certainly well-meaning people trying to make a living as a real estate agent in paradise (who wouldn’t?!), and they might not intend to put you in harm’s way, but their inexperience could cost you time or money, or both. In the end, it is a big investment decision you are making that deserves the advice of an experienced local expert.
Beyond these basic things that your realtor should possess, there are many other factors that you should take into account when choosing who to trust with a complex foreign transaction.
Your agent should have been through at least one full cycle in the local real estate market, or have been a realtor in another area and gone through both a good and bad real estate cycle. Anyone can sell real estate in a hot market, but the best realtors are the ones who flourish in a down market and have been through several of these cycles. They are the realtors who know the value of being a trusted adviser to their clients and creating a mutually beneficial relationship that will last decades and hopefully generations.
A seasoned realtor not only brings to the table the experience of navigating successfully both in good and bad markets, but is also looking toward the future when you will need to sell that beautiful home, condo or lot when the time comes for a change in your life.
Costa Rica is a second-home market and acts very differently than a commodity market of any city in North America. It is essential that you not only purchase something you love but also have your realtor guiding you to purchase a property that will be readily saleable in the future. A good realtor will tell you not to buy something because they know it will be difficult to sell it going forward. This applies to all real estate markets, but much more so in a second-home market like Costa Rica.
As you may have found out, there is no formal MLS in Costa Rica. For both buyers and sellers, it becomes absolutely essential to work with an experienced agent who works at a strong agency. As a buyer, you will save yourself an endless amount of time by searching for a good realtor first, instead of surfing the thousands of websites that have Costa Rica property listings. A good realtor should know everything that has been bought and sold in their local market and will be able to guide you in the right direction based on the criteria you have chosen for your property search.
A seasoned professional will also have an extensive network of contacts with other realtors, property developers and sellers. This is no different from any other real estate market, but it makes a huge difference in a market that has no MLS. You would be surprised to know that a good majority of agents who appear to be solid professionals on paper do not have a good grasp of the inventory in their local market.
A common misconception in Costa Rica is that realtors will only show a buyer their exclusive listings. If you are working with a good realtor, they will show you all the listings that fit your criteria and will be a good fit for you to enjoy, with a good exit strategy to sell when your situation changes. An experienced realtor will have contacts with all the realtors in the area, as well as property developers and individuals who are selling on their own. The most important point here is that a long-standing realtor will have knowledge of and know how to get access to any property for sale in the area so you won’t miss out on anything that might go undiscovered by a less seasoned agent.
They will also be able to steer you away from a property that looks good on the internet but has a hidden issue or future resale problem. Again, this is no different from other markets, but just more important to have a good adviser by your side when there is no MLS.
If you look at a map of Costa Rica, for example, it looks like the distance between Playas del Coco and Tamarindo is minimal. It stands to reason that a realtor could cover both territories. This, unfortunately, is not the case. A good realtor will have well established and long-standing relationships with professional realtors in other key areas of Costa Rica.
Depending on the realtor, they may accompany you to areas outside of their local area of expertise as a buyer’s agent, and rely on their trusted colleagues to assist them in choosing the correct properties for you. It may be tempting to use multiple realtors — one for each area — but in our experience, it is more important that you have only one trusted advisor to help you navigate your experience. When possible, have your trusted realtor come with you. If it is not possible, then your realtor will be able to refer you to a trusted colleague in the area you are interested in.
Not only is it important to have a trusted professional working on your behalf, but it is equally important that the company they work for is well established in the area and has been around a long time. A company should have at least 10 years of being in business, and preferably more. Your agent will be able to draw on the experience of colleagues and use the vast database of knowledge when looking for properties on your behalf. They should be able to navigate a potential issue that might affect the value of the property in question.
The fact that your agent works for a long-standing real estate office in the local area will also assure you that the professionals that you will be working with (attorneys, property managers, etc.) will also be the top professionals in their field.
You should work with a real estate company that only sells real estate. You will find that many real estate companies are a one-stop shop for everything — real estate sales, vacation rentals, property management, tours, etc. This may seem like a good synergy, but the opposite is often true. It is hard enough to be good at one thing and serve your clients to the best of your ability. Look for a company that focuses only on sales. You will find these are the companies that are consistently the top producers and have the most satisfied clients.
For a real estate company to have lasted a long time in its market, it has made significant investments in its business infrastructure, with long-time employees who are experienced in the real estate field. The wealth of knowledge that comes from being in the same business for many years with the same employees and long-time agents creates an incredible wealth of knowledge and wisdom in the marketplace that can be leveraged by all the agents that work in the office.
You will also find that a successful agency will have agents who have worked at the same agency for a long time because the broker/owner is constantly investing in the business and its people.
It goes without saying that successful agents and companies will be invested in their community and involved, giving both their time and resources to help out those in need. A mark of a good agent is the one out there doing good in the community without looking for a reward.
In Costa Rica, we always say the easy part is finding you a property you love and getting a fair offer accepted by all parties. When a good realtor becomes invaluable is after the contract is signed. There are a myriad of things that you will need help navigating to get to a successful closing. Your realtor will introduce you to a good attorney, help you set up the escrow account, introduce you to a seasoned home inspector, arrange for a topographical review if needed, and guide you from step A to Z all along the way. This is the most essential time to have an advocate on your side guiding you through all the steps to get your property closed. If something comes up during due diligence, your realtor will be able to explain to you clearly what issues have come up and if they are something to be concerned with or not.
The peace of mind that you receive when working with a professional is priceless and can make a potentially stressful situation go smoothly. That leaves more time for you to think about enjoying your time in your new property!
And don’t forget that your realtor will guide you through how to get a phone line, who to use as an interior decorator, maid, pool service, what is the best internet and where to buy a car — all the little things you take for granted because you know how to do them at home.
And of course, as most often happens, you will gain a good friend in the process. A trusted ally who has gone through everything that you are going through before and can give you advice along the way.
Whether you are selling your property to upsize or downsize, or your time in Costa Rica has come to an end, you will also need the assistance of a quality professional realtor.
For many years in Costa Rica, the custom was “for sale by owner.” This was a hodgepodge method that really began to fail when a serious number of foreigners began to purchase properties in the coastal areas, predominantly along the Pacific coast. With no professional intermediary acting as a seller’s advocate, the system was ripe for problems caused by unsuspecting sellers and buyers.
Depending on the area of the country, the expat realtors — mostly operating along the coastlines — along with the professional Costa Rican realtor — mostly in the Central Valley surrounding San José — began to form professional organizations. In the Papagayo region, after the real estate crisis of 2008-9 there were a handful of realtors who weathered the storm and were still in business. As a group, we began to purposely work together to increase the professionalism of the realtors working in the area.
One of the biggest issues was that not all sellers were interested in signing exclusive listings. We, as a group, got together and decided that we should strongly suggest all sellers to list their property with a local realtor no matter who it was.
Slowly but surely, all sellers began to understand that listing their property with one realtor meant they would get that realtor to do professional marketing of their property, take professional photos and video and market it across multiple websites and other media outlets. There was still print media in those days and the internet was still in its infancy, especially in Costa Rica.
Since Costa Rica does not have an MLS, it is extremely important for sellers to contract a professional realtor who works with a powerful real estate company. That’s because the only way for them to get their property marketed is if one realtor has the incentive to spend marketing dollars to do a professional marketing package and promote it across the internet on multiple websites, social media and the like. Also, since buyers cannot go to one single source for all properties for sale in Costa Rica, they are reliant on their realtor to find them their dream property.
Good professional agents will have an extensive database of all the local realtors so that when they get a new listing, everyone on their database is made aware of that new property immediately. At the same time, when agents have a buyer, they are going to contact their database of realtor colleagues and ask them what properties they have listed. If you, the seller, do not have your property listed with a good realtor, then your chances of selling will be much lower if you have it listed for sale by owner.
If you want to ensure a successful sale of your property, you should work with a realtor who has an extremely strong online presence. They should have their own sophisticated personal website and the agency they work for should have websites that consistently rank at the top in SEO for the area. Your realtor should have a good social media footprint to market your property and have their own YouTube channel, at a minimum, to advertise your property.
Many people think that it is essential to work with an international real estate brand. Back in the old days, before Costa Rica was on the map as a destination to purchase second homes, it was more important to be associated with a well-known international brand. In all honesty, it gave buyers and sellers more comfort to be doing business with a brand they knew from back home. But it produced surprisingly few qualified leads.
Now everyone has Costa Rica on their wish list to buy a second home or condo. The amount of money that has to be paid to the international company’s home office, for use of its brand, far outweighs the small number of clients who come in the door just because of the brand name. In the end, the money that is saved not having to pay to the home office can be much better spent on marketing to attract buyers and sellers, and to give back to the local community.
As in all real estate markets, experienced realtors know the market and will advise you of local market trends. They will help you price your home correctly the first time and give you tips to stage your property for maximum impact. A good realtor should produce for you an outstanding marketing package that will attract buyers. Once you receive an offer, seasoned realtors will be worth their weight in gold when it comes to negotiating the offer to deliver the best price, under the best terms, for you the seller.
It is almost more important to have a good realtor who works at a good, long-standing agency, when it comes to navigating the due diligence process and getting the deal to successfully close. There have been innumerable sales that would not have closed if it were not for the realtor knowing about the sticking points to get the sale done. Because they had the experience and know-how, they were able to steer the sale through to closing.
So please do yourself a favor and do a small amount of due diligence. Find yourself a professional and experienced agent who works for an agency with a long history and good track record. Then you can spend more time enjoying all that Costa Rica has to offer. Pura vida.