This is part 2 of a 4 part series. Click for: Part 1 || Part 3 || Part 4
Once we have identified the purpose that the person(s) have in looking to buy land in Costa Rica, the agent will consider this as he directs them to the available properties that suit their interest.
I have always found it interesting to watch the process of land selection. I think that we all come down to Costa Rica with some preconceived notions of what we want, and for most of us, these change after we’ve stood on a few properties. Our marketplace is, for the most part, coastal mountain terrain. It’s hard to arrive here knowing what these properties are like; they are quite unique, even on a global scale.
Throughout the consultation and property viewing, the buyer is asking questions, getting informed, and making decisions. They are considering the various value-affecting features of the property such as: the view, the access, proximity to neighbors, proximity to the beach, waterfall, how much breeze there is, the jungle, and so on.
Most buyers of property in Costa Rica benefit from an overview orientation of The Zone. I like to acquaint buyers with some of the peculiarities of The Zone and its topography. One point is the difficulty of keeping oneself oriented here. Despite living in Costa Rica’s southern Pacific zone for 2 decades, I still struggle with orientation. I like to place the blame for this on the diagonal layout of the coast.
I grew up in Northern California, where the coast is so very thoughtfully laid out in a north/south configuration. The ocean is west. I credited myself with having a strong sense of direction there. The benefit of this cardinal-points layout even seemed to benefit me in the aspen forests of Colorado where I lived the 20 years prior to moving to Costa Rica. There I would mentally place myself in the kitchen of the home where I grew up, and be looking out the back sliding glass door, and that would be north. My internal compass.
Not so here in Costa Rica. The ocean is to the south/west, sometimes just south. The topography is erratic. Even the geological formation of the country stands in opposition to our desire to have things make sense. The northern part of Costa Rica is where the volcanoes are, and these are largely credited with the formation of that part of the country. The southern regions were formed by tectonic plate activity. The reason? Lord knows.
Costa Rica is, in geo-speak, a relatively young country. The theory has it that it developed, for some reason, as a land bridge between North and South America. How the volcanic and tectonic processes got together to form this bridge is anyone’s guess.
The strangely erratic mountain range systems in and around Dominical, Uvita and Ojochal, result in me carrying a compass while showing properties and referring to it regularly. It also results in the generally unspoken state of the buyers: that of being disoriented.
However, despite being unfamiliar with the odd lay-of-the-land here, most have had experience in land transactions somewhere, and that familiarity of basic good business is helpful. Basic good business practices are the same everywhere. The broker should be an open book with respect to the properties, “full disclosure” being the key words here. You should get the sense that your broker wants you to know everything that he knows about the property, good, bad, and indifferent. If you don’t get that sense from your broker, get rid of him/her and find another one.
When their property is found, it is time to move on to –
Making an offer:
When I recognize the moment that my client has “found” their property, I view it as imperative to get the property off of the market as quickly as possible. There is some cosmic mechanism in place that alerts other prospective buyers about that particular piece once a property buyer decides they want it. It has happened more than once that the day I submit an offer on a piece of land, the seller receives another one within hours. Or an offer comes in just before I can get my client’s offer in. And this can happen on a piece that has been on the market for a long time!
The below paragraph is a relic from the first writing of this article from 2008. Things have changed since then and there is now “representation” of both buyers and sellers. I leave it here for the benefit that understanding some of the backstory of the real estate industry here may have to a prospective buyer.
Costa Rica real estate agents don’t “represent” buyer, nor seller as they do in the States. But as for services rendered, I think that our representation leans more towards the buyer. The seller holds the title to that property and so is pretty safe and doesn’t need as much care as the buyer. The buyer needs good guidance through the process, needs to know what to look for.
Having said that, “the offer” is the point where our representation of the seller kicks in. We can’t ask a seller to take a property off of the market, without it being a PDSD (Pretty Darn Sure Deal). The moment that they take the property off of the market by means of a signed OTP (Offer To Purchase), they will say “no” to any further offers, even if they are higher priced or have more favorable terms for the seller. So the real estate agent needs to make this clear to the buyer.
Price negotiations: all things are negotiable. In the majority of the deals that I have brokered here in Costa Rica, the selling price has been at, or close to, the asking price. There have been some exceptions where the seller is particularly motivated and the buyer comes to understand this by the process of negotiations. When asked if the seller will listen to offers, I generally respond using the line that I learned from my real estate peers in the States: “I’ll present any offer you wish to make”.
There are basically two categories of concerns to a buyer that must be satisfied: subjective, and non-subjective.
- The subjective concerns are: Do I like the property? Is it in my budget? Is it where I want to own property, etc…
- The non-subjective concerns are: Is the land buy-able? Is it free and clear? Does the seller have the right to sell it? Are there any potential pitfalls to the title on this property being transferred to me? Can I build what I want on this property?
When we submit an OTP, all subjective concerns have been addressed. The buyer knows that they want to property and have the necessary funds to buy it. The offer cannot allow for subjective concerns since we are going to legally restrict the seller from being able to accept another offer on the property.
This is part 2 of a 4 part series. Click for: Part 1 || Part 3 ||Part 4