Jan 062013
 

It is common to think that you know all about how to sell because of your experience in real estate in another land. In Costa Rica real estate, this type of thinking can be a real hindrance.[/caption]

We have posted quite a bit on this blog about seller’s options in Costa Rica and in particular, The Zone. In this article I will list the pros and cons of the various Seller’s Options and hopefully help to unravel some of the perplexing issues presented by the lack of representation for the seller.

How to sell real estate in Costa Rica

Options:

  1. Open listing
  2. Exclusive listing

How to do an effective Open Listing:

For a raw land listing, here is a list of what you’ll need:

  1. The survey (plano) of the property.
  2. Information on the various fees associated with the property, ie. taxes, road dues, water, monthly maintenance.
  3. Current photos of the property and its view.
  4. Creative write-up

For a house listing you’ll also need, in addition to the above:

  1. A description of the house – number of bedrooms, baths, square footage, if there is a pool, garage etc…
  2. Who built it and when.
  3. Disclose any details about the house that the buyer has the right to know.

What you do with all this: Continue reading »

Feb 192012
 

Ben Vaughn, co-owner of Guys In The Zone Real Estate, explains the three listing options available to Costa Rican property owners. There is no Multiple Listing Service in the southern Pacific zone of Costa Rica, which expands the listing possibilities– the Open Listing, the Exclusive Listing, and the (new) Modified Exclusive Listing. Please visit Ben and Rod at www.guysinthezone.com and explore our current properties listings, our Talk Show, and general information about the greater Dominical area. Thanks for watching!

Jul 142011
 

“Innovation distinguishes between a leader and a follower.”  – Steve Jobs

I bet your wondering how that idea relates to real estate in Costa Rica?  Well, simply put… if there was ever a time for property owners and real estate agents in this marketplace to be “innovative,” it’s now.

LISTING IS ONLY THE FIRST STEP

Here’s how listing a property usually unfolds in The Zone—

  • Step One: Call up The Guys and set up an appointment to preview the property.
  • Step Two: Determine if an Open Listing or a Modified Exclusive Listing is appropriate for you.
  • Step Three: Wait for The Guys to bring you a buyer.

We all need to think outside the box...

The problem is that Step Three is taking much longer than most Sellers anticipated.

LOOKING BEYOND PRICE

We all know reducing the list price is the easiest way to increase property showings, offers, and sales.  However, if your property is in the ballpark of current market value and it is being shown but not selling, there could be other reasons limiting the sale.

Here at the Guys office, we continue to ask ourselves what can we do to speed up the sales process?  At the risk of sounding trite, one answer is: “think outside the box.”  Here’s an example of how The Guys have applied this idea.

Ben started his Costa Rica blog in 2003 (before many of us knew what a blog was) Continue reading »

May 142011
 
Negotiate a fee for a marketing service.

Disclaimer: This program is no longer offered by Guys In The Zone Real Estate. We have closed our doors and are working in tandem now with another company that does not recognize this method of listing properties.

This series of articles is all about options for selling a property in Costa Rica.

Negotiate a fee for a marketing service.

Decide what the marketing fee will be.

Now here, in Part 3, we are going to discuss an un-orthodox approach to selling a property in Costa Rica’s non-MLS marketplace. The incentive for doing this is the weaknesses, or flaws that were reviewed in Part 2 of our attempts to imitate the MLS of other countries.
I have been working in real estate here in Costa Rica’s southern pacific zone for years, and have always felt that the exclusive listing was a nearly sacred thing. It puts a tremendous responsibility on the agency that has the exclusive, but is also demanding on all of the agencies in that they must ignore the fact that the commission on this property is shared, when the majority of properties in their inventory are not.

I have been scratching and thinking about this topic and here is what I’ve come up with.

The Real Estate Agency’s Objective:
What we want to do is offer to sellers a better service, and in the process improve the professionalism of our industry. This is particularly appropriate when Continue reading »

Apr 052011
 

If you haven’t read Part 1 of this topic yet, you might want to. You can do so by clicking here.  You don’t have to if you don’t want to.  This article stands up fine all by itself.  However, to get a good understanding of the open listing, which is the most common type of listing here in Costa Rica, you’ll probably want to.  All right?

Sell a property in Costa Rica

The quandary of how to best sell a property in Costa Rica

When we last visited, we were left with the cliff hanger – “what is a seller to do if they don’t live in Costa Rica?”  The absentee owners don’t have time to go to each real estate agency and distribute photos, write-up, survey and contract with every real estate agency.  This could really mess up a family vacation.  Not to mention the follow-up-regular-visits to see how it’s going with showings of the listing.

Before going into that and satisfying the “edge of your seat” drama that I have created here with this compelling topic, I’d like to give you a glimpse inside the mind of this Costa Rica real estate agent and share with you an alternate option to what has been the standard practice in Costa Rica for the exclusive listing of a property.

We have always known that the MLS (Multiple Listing Service) market place of the US is superior to the Costa Rica open listing model.  In our (Zone real estate agencies) efforts to improve our market, and to offer a better service to both buyer and seller, we have defaulted to imitating the MLS market place, without having an actual MLS.  The reasoning is simple: the MLS is a superior model that has evolved over time in response to gazillions of problems and concerns and has resulted in what we see there now: a mature business model that offers representation to both buyer and seller of a given piece of property.  So, we try and come as close to working like and MLS without having the actual infrastructure of an MLS.

For various reasons, I’m starting to think that this premise might be flawed.  AND it may be that, if we think outside of this box we’re in here, we might even come up with a solution that rivals, or perhaps (could it be?!?) even exceeds the MLS model of other countries.  Bear with me here.

How Costa Rica imitates the MLS model… Continue reading »

Feb 192011
 

This is the first of a 3 part series on how to sell a property in Costa Rica.

  1. Part 1 is this one and it deals with the most common type of listing that sellers use in Costa Rica: The Open Listing.
  2. Part 2 discusses how agencies here in The Zone imitate the MLS (Multiple Listing Service) of the U. S. and other countries by offering Exclusive listings.
  3. Part 3 – A new thought on how to get representation and motivating all real estate agencies to promote the sale of your property.

This question just in:

Should a seller give an open listing, or an exclusive listing? What is the difference?

To give an exclusive listing, or an open listing? That is the question. In Costa Rica's non-MLS marketplace, the rules are all different.

What is your advice regarding putting it out there with everybody vs. exclusive.  Several people know it’s for sale, including Guy X, Guy Y and Gal Z who do sell properties ‘on the side” Is there no exclusive at all down there?

Before going into these questions, I’d like to mention that these questions are common.  It is difficult to understand how Costa Rica real estate works when all one has ever known is the ubiquitous Multiple Listing Service (MLS) model of the US and other developed nations (with the exception of UK and the state of Mississippi).

Open Listings:

To understand exclusive listings, we need to understand open listings first. Open listings are the norm, if there is any such thing in Costa Rica real estate.  When you list a property with an agency in Costa Rica, that is as far as it goes. That office has your listing, and that is it.  If you want another agency to have the listing, you dear seller, have to visit the next agency and do your presentation all over again. Repeat these steps until all of the agencies that you want to list your property have your property.

Bear with me here now.  I’ve been down this road before. You think you’ve got it, right?  Well, oddly enough, it is very likely that you don’t.

In your country, it is most likely the case that you list your property with one agency and they are then entrusted with the task of announcing the listing to all the other agencies.  You get representation in the deal and all of the agencies that subscribe to your MLS now have your listing and they can bring the buyer to your property.  They are represented by whoever the agent is that shows them the property. You, the seller, are represented by the agency that you listed your property with.  The commission is split 50/50 between the listing and selling agencies.

In Costa Rica, when you list with an agency, you are simply enhancing the inventory of that one agency.  AND, you are not getting any sort of representation in the deal.  The agency will likely put you on their website, and they may even print out a flier for the wall or marquis outside of their office. If they sell it, they will get the full commission.

You go out and give your listing to as many agencies as you can and each one of them hopes that they are the one to sell your property and get the whole commission.

Later on, if you want to know what the reaction is to your listing among the prospective buyers who have viewed it, you will need to call or e-mail each of the agencies and ask how it is going.  This is recommended anyway since regular communication helps the agencies to keep your listing in mind.

It should be mentioned at this point that here in Costa Rica, most of our sellers don’t live in the country.  They live somewhere else.

Which segways us nicely into the…

Stay tuned to the next installment of the topic “Exclusive Listings Revisited”, where we will consider the pros and cons, and consider best practices of doing an exclusive listing.

Click here to be notified via e-mail when new articles are posted.

Click here for Part 2 of How To Sell a Property in Costa Rica.

Nov 192010
 

In Northern California’s Bay Area, million dollar homes are very common.  They typically combine elements like— a desirable location, a large floorplan, upscale finishes, and/or estate-sized acreage.  My first position in real estate was in a beach area near Santa Cruz, and the power agent I worked for had no less than five million dollar listings when I joined her.  I just checked that broker’s website, and they currently have 307 houses listed between $1 million to $10 million.  Conversely, the Southern Pacific Zone of Costa Rica has a young real estate market and million dollar houses are less common.

Luxury Estate in Escaleras, Costa Rica.

As recent as 2006, this area was considered the new frontier in Costa Rica.  Access was difficult and more exhaustive than it is now.  Developments were few and far between.  Then, the real estate boom hit.  This boom affected all aspects of real estate—raw land, developing, construction, rentals and associated services.  All of the key elements for million dollar homes—desirable location, sweeping ocean views, large building sites, and affordable construction—were easily realized for a relatively affordable price.

Let’s start with the land… Continue reading »

Apr 222009
 

I have been a bit negative about exclusive listings in the past. My attitude towards these is now changing and, if anything, I’d say I’m a bit positive towards them now – with caveats.

The Exclusive Listing is a hybrid business model between the existing Costa Rica non-MLS model, and the Multiple Listing Service model that so many are accustomed to in the U.S., Canada, and elsewhere. I have recently learned that England does not have an MLS and, get this, that Mississippi doesn’t have an MLS. The point about England came from a reliable source. The one about Mississippi was chit-chat. I did a cursory study of the Mississippi matter on the internet and found a little bit of information but it’s still unconfirmed.

confusionexclusive.gifIn my previous article I considered the workings of the standard Costa Rica real estate model – the Open Listing.. If you haven’t read it (and would like to) you can by clicking here.

A Spot of Trivia
Realtors in England are called “Estate Agents” and the term “Real Estate Agent” is looked down upon. The non-MLS model has been used forever in the UK and they are quite settled with it, thank you very much. In a single yard of a house for sale you can see numerous signs to the various agencies that have the property listed. The typical commission paid to an Estate Agent in the UK is 1.5%

The exclusive listing attempts to provide buyer/seller representation in the Costa Rica market place.

The Way it Works
You approach your favorite real estate agent. You give that agent the listing for your property. That agent then takes the full responsibility of marketing your property so that it receives the broadest possible exposure. Sounds good right? Well, it is, but…
Continue reading »

Apr 132009
 

I have written about the nature of our marketplace and the listing options open to sellers. Its not a pretty site in this non-MLS (Multiple Listing Service) marketplace. The seller is confronted by the decision to personally market the property to each of the real estate agencies in the area (Open Listing), entrust one agency to the task (Exclusive Listing), or go it alone with a For Sale By Owner. Here are the pro’s and cons of the options.

confusion.gif

Open Listing: this is the type of listing that is considered the norm here in the non MLS model. The seller walks into my office with a packet of information on their property. I ask a number of clarifying questions: access, water, electric, phone, Internet, view, privacy and of course, price. Provided the answers to these questions indicates that the property is sellable for what the seller has in mind price wise, we set up a time to go and view the property. We visit the property, take photos/videos and then the listing goes onto my website.

This generally pays 8% commission to my agency.

The seller then goes down the road to the next agency and does it again.

Pros of the Open Listing: The agencies are motivated by the full commission. Right now the inventories of the various agencies are ripe with great listings. When a prospective buyer comes into the office, or starts up a dialogue via e-mail about their search for property, the well-intentioned, but commission motivated agent is going to gravitate towards the full commission listings first. This is a weighty point that will not be fully dealt with until we have a fully functioning Multiple Listing Service here in Costa Rica.

If you think it through, the seller has no actual representation in the marketplace. For that matter, neither do the buyers. You’ve got seller, buyer, and a commissioned sales person in the middle trying to make a deal happen so that he/she gets paid. Not the best of business models, but it’s ours and somehow it works.

Cons of the Open Listing: Continue reading »

Interested in Costa Rica real estate as an investment. They primarily live somewhere else, but they own property in Costa Rica for the asset appreciation potential as well as possible rental income. Some just buy and hold (land-bank). For developed properties, the investor has a vacation home to visit as desired.

Migrators spend a regular amount of time in Costa Rica during each year.

Re-locators are those that are looking to move to Costa Rica from wherever they are. They will live full-time in Costa Rica.