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 not adjust the actual property owners’ business, leaving you, the buyer, at a huge drawback. All real property owners marketers in Costa Rica are in a commercial enterprise for the simplest cause – to make cash. They simplest make money when they sell assets. All the agent needs are your money. The expression “shark” is becoming synonymous with “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 not trust them now because of the final authority and investment cash. They no longer have your exceptional hobby at heart.

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

1. All Ticos (Costa Ricans) 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 cautious of Gringos trying to sell me something that the Ticos. I recognize what Tico wants but do not realize the Gringo’s real schedule. Anyone using such generalizations should be included in the group 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 assist you or your attorney immediately communicates to the seller to affirm the asking price. One widely recognized agent within the northern principal valley has previously brazenly advertised that he doesn’t mark up residences; 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 are unregulated, so we will do anything we need.

Three. We fee a commission to the consumer because Costa Ricans do not pay a fee. What a line if I ever heard one! Costa Ricans aren’t dumb; they recognize that to sell their 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 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. I suppose the agent is marking the assets up and charging the shoppers a fee while the seller likewise pays a fee.

Five. “We have already performed all of the due diligence for you.” When trouble arises with the water or strength or the associates, your agent will not pay to repair it. Alternatively, he will say something like, “Gee, I’m sorry, I failed to recognize approximately that.” One agent is advertising that they have finished ALL the due diligence on their houses before they list them. If that is the case, I am surprised that the belongings I purchased from that agent don’t have any water available, while he told me that it had water on the assets.

6. Your agent states he’s making a complete and straightforward disclosure. California has one of the toughest disclosure legal guidelines within the real estate industry, while Costa Rica has none. One organization in the northern relevant valley sells 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 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, ” saying that deposits are nonrefundable and that the vendor receives the deposit immediately! 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 assuming a lengthy and hard deal if the agent says you must make a nonrefundable deposit.

Eight. The seller can alternate his mind whenever he wants and refuse to sell. Again, a few agents do not realize how to or 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 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 leading prices equally among the vendor and the buyer. Of course, you and the seller can agree on other terms but don’t start by 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 aircraft, you will not recognize that what you’re looking at is truly what you are shopping for. It is true that some fences are occasionally 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 must be about $2,500, and the water is 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 runoff, and human waste. Even the huge “municipalities” have problems with human waste and fuel moving into their wells. If you do not know where the water comes from, get it tested.

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

15. No, the lot isn’t too steep… If the assets are vertical, you have two alternatives: Build on more highly-priced piers or Cut out a constructing pad. Either manner makes certain you permit for ok drainage. I 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 get an engineer’s opinion. My uneducated opinion is that a preserving wall delays the inevitable when unsure, ask an engineer, no longer your agent.