Costa Rica – Watch Out for the Real Estate Sharks

Thinking approximately shopping for an actual estate in Costa Rica? It might be a brilliant funding or your largest headache. Read on to learn how to stack the chances on your preference.

Costa Rica does now not adjust the actual property owners business, and this leaves you, the buyer, at a huge drawback. All real property owners marketers in Costa Rica are in a commercial enterprise for the simplest one cause – to make cash. They simplest make money when they sell assets. All the agent needs are your money. The expression “shark” is a very becoming synonymous for “real estate agent.” However, for my part, it is a derogatory comment approximately sharks.

Agents may be exquisite people, first-rate buddies and can even be from your home USA; however, do now not trust them because of the final authority along with your investment cash. They do no longer have your exceptional hobby at heart.

Here is my non-public list of real property owners testimonies (lies?) that I actually have heard from numerous dealers in Costa Rica.

1. All Ticos (Costa Rican’s) are out to screw you! I even have located that some are and others are not out to take benefit of you financially. After residing here for a year, in my opinion, I am extra leery of Gringos trying to sell me something that the Ticos. This is because I recognize what the Tico wants but do now not realize the Gringo’s real schedule. Anyone who uses such generalizations ought to be included within the group that they are criticizing.

2. “We do not mark up belongings like different businesses…” They might not use the same % of markup (known as “Net Listings” which might be unlawful inside the US) however don’t believe them until they will assist you to or your attorney communicates at once to the seller to affirm the asking price. There is one very widely recognized agent within the northern principal valley that has previously brazenly advertised that he doesn’t mark up residences whilst in truth he does mark up belongings on every occasion he thinks he can accomplish that. I forgot the precise words he used. However, the gist turned into: Real property owners in Costa Rica is unregulated so we will do anything we need.

Three. We fee a commission to the consumer due to the fact Costa Rican’s do not pay a fee. What a line if I ever heard one! Costa Ricans aren’t dumb and that they recognize that to sell the belongings, they probably should pay a person to discover a client. Is the agent double-dipping? I don’t know, but I am willing to wager that nine times out of ten the vendor is paying someone to get the property owners offered and the agent is being profitable on both aspects of the transaction.

Four. You or your attorney can not talk directly to the seller. The excuse often given is that they’re afraid your attorney is unscrupulous and can steal the belongings or something like that. I suppose that the agent is both marking the assets up and/or charging the shoppers a fee whilst the seller is likewise paying a fee.

Five. “We have already performed all of the due diligence for you.” When trouble arises the water or strength or the associates, your agent is not going to pay to repair it, as an alternative, he will say something like “Gee I’m awfully sorry, I failed to recognize approximately that.” One agent is advertising that they have got finished ALL of the due diligence on their houses before they list them. If that is the case, I surprise why the belongings I purchased from that agent doesn’t have any water available whilst he stated to me that it had water on the assets.

6. Your agent states that he’s making a complete and straightforward disclosure to you. California has one of the toughest disclosure legal guidelines within the real estate industry at the same time as Costa Rica has none. One organization in the northern relevant valley is currently selling a residence they are constructing on speculation by announcing Vulcan Poas is not risky. In March 2006, Vulcan Poas roared lower back to existence (it’s miles and has been one of the two most lively volcanoes in Costa Rica), and scientists are actually involved due to the fact the water temperature of the lake is a few 30 ranges warmer than normal. Is this a full and accurate disclosure? Not in my opinion.

7. Your earnest money deposit isn’t refundable. Some sellers use contracts or “letters of the cause” that country that deposits are nonrefundable and that the vendor receives the deposit straight away! You can and should write a purchase contract in which your deposit is held in escrow and is refundable if positive conditions aren’t met. I strongly advise which you assume lengthy and hard about a deal if the agent says you need to make a nonrefundable deposit.

Eight. The seller can alternate his mind any time he wants and refuse to sell. Again, a few agents do not realize how to or do no longer need to write a correct agreement. If you have a buy option and have it recorded, it’ll be a lot extra difficult for the vendor to again out.

9. You do not want to use your own lawyer. Just examine our private enjoy with attorneys, and you’ll see why your attorney must represent you and best you.

10. You should pay all of the ultimate expenses. The custom in Costa Rica is to break up the ultimate prices equally among the vendor and the buyer. Of direction, you and the seller can agree on other terms but don’t start through providing to pay for everything – that makes the task easier for the agent.

11. You do not want a brand new plane. Your plan is a legal survey of the assets. Unless you get a brand new plane, you will now not recognize for certain that what you’re looking at is truly what you are shopping for. It is a truth that some fences are from time to time moved using friends, and several older surveys are unsuitable.

12. Don’t worry about utilities… The previously cited agent and his buddies use almost the same story for every lot they show to their customers – “Electricity has to price about $3,000. The street has to be about $2,500, and the water is right over there.” Just make sure you verify everything with the proper authorities and get actual estimates from the people as a way to be doing the paintings. Don’t be amazed if you discover that the real charges for installing utilities are up to ten instances as a whole lot because the agent said.

13. The water is secure to drink. Over ninety% of the surface water in Costa Rica is polluted with greywater runoff, commercial pollution, farm run-off and human waste. Even the huge “municipalities” have problems with human waste and fuel moving into their wells. If you do not know in which the water is coming from getting it tested.

14. Gringos are extra sincere than Ticos. This is a common misconception or misplaced perception on the client’s component that makes the experience more relaxed parting with their money. It is clearly easy to fall into this “comfort trap” and accept as true with that each one Gringos are honest. The simple reality is that its miles easier for a Gringo to sell belongings or an investment to every other Gringo. Think approximately it – Why are all of the international time proportion hotels are staffed with Gringo income people?

15. No, the lot isn’t too steep… If the assets are steep, you’ve got two alternatives: Build on piers that is greater highly-priced or: Cut out a constructing pad. Either manner makes certain you permit for ok drainage. I actually have visible a few masses carved out of a hillside wherein there may be bare earth for 40 to fifty feet nearly immediately up. Landslides are not unusual in Costa Rica, even though it is almost all volcanic soil. Don’t suppose your lot is an exception until you got an engineer’s opinion. My uneducated opinion is that a preserving wall delays the inevitable when unsure ask an engineer, no longer your agent.