Apr 062015
 
Non-MLS versus MLS in Costa Rica Real Estate

Question: Do you have MLS there so that you can search all available properties or are you limited to your listings?

In other words, can you as a prospective buyer of real estate in Costa Rica work with just one real estate agent, or do you need to scour the various websites looking for the various properties that fit your criteria and then inquire of those agencies individually?

Short Answer: Click here

Non-MLS versus MLS in Costa Rica Real Estate

The differences between MLS and Non-MLS in real estate are numerous

Long Answer: My Costa Rica Real Estate blog (this one) speaks at length about the Costa Rica real estate market and how things work here and specifically, here in the southern Pacific zone. One of the greatest differences between the real estate market in Costa Rica and that of other countries, is the lack of an MLS (Multiple Listing Service). This “lack” has repercussions that should be understood to anyone interested in buying, or selling, a property in Costa Rica.

Over the years (I’ve been in real estate here since 2004) I’ve seen lot’s of efforts to both implement an MLS (with no success) and to imitate an MLS (with some success). The current status is that we are imitating an MLS well, and as an industry, we are growing up.

At our core, us real estate agents here in Costa Rica, are salesman/women (people? Trying to be PC here). We are paid when someone buys something. For my first years in the business, nearly all of my sales were full commission, generally 8%, with me representing both sides of the deal. There was some collaboration between agencies at that time, but not much.

However, at that time, I hardly thought in terms of “sides” of the deal. I was the guy in the middle making it happen. Also, there were rarely two attorneys.

There were some drawbacks to this system and it really required that the real estate agent be “full disclosure” to both buyer and seller. So the success of the deal depended largely on “integrity”. This quality, unfortunately, can be a rare commodity amongst us humans. So there were some (but not many) negative experiences.

One of the negatives was that sellers didn’t get the representation (read: care) that they needed. The salesman might be prone to focusing on what the buyer needed to get to “yes”.

For buyers, the challenge was in seeing all the available properties that were appropriate for their criteria. Due to the limited collaboration (at that time) between agencies, buyers would oftentimes see only what the agent knew of, and that agent may not have felt open to reaching out to his competitors for their listings since it would result in a shared commission.

Now things have changed. We still have no MLS, but the majority of sales that occur here now are shared. We have acclimated to this now and so most deals have a buy side, and a sell side, just like in the MLS. My inbox is full of inquiries from other agents asking for what I’ve got that satisfies a particular client’s needs.   You tell me (or some other salesman, er… real estate agent) what you’re looking for, and he/she will go through his/her listings first, and then reach out to the other agencies to make sure that the client’s criteria is satisfied, and that they are informed of all available options. I can report that I have observed a preference shift on the part of most of the real estate agents here in the zone (myself included) for sharing the commission and that both sides have representation. It is simply a superior business model.

So, after all that, the quick answer is yes, you can work with one agent and see all the appropriate properties available on the market at a given time.

To avoid a lengthy list of possibilities, the agent should be skillful in determining the fine grain of the buyer’s criteria, and the buyer should be forthcoming with what they are looking for. It is understood that things tend to change when one puts “feet in the ground” here and goes out looking at property, but this is typical and we agents are accustomed to this.

It is for this reason that I regularly ask the following questions of nearly every inquiry I get:

  • Are you familiar with the southern pacific zone? With Costa Rica?
  • Are you looking for raw land, or an existing house?
  • Are you looking to build a single family home with guest house? Income generating property?
  • Are you familiar with costs to build here?
  • Are you planning a visit here any time soon?
  • Will you be working with just one agent, or will you be contacting various agencies?
  • And the mac-daddy of all: what is your “purpose” in acquiring a property here in Costa Rica?

So, if you are interested in working with me in your property search, we can skip a step if you include this information in your initial inquiry.

Thanks Dan for the great question!

Sep 222013
 
Costa Rica Real Estate 101 Book

Back in 2004 I found myself running a small real estate company in Dominical called Horizon Properties. At that time, the concept of a property listing having a value within the agency, and amongst the various agencies, was non-existent.

As the chief cook and bottle washer of the company, I pretty much expected to procure the listings. I would oversee the posting of the listing to the website, and then would hope that the agents that worked there with me would sell them. I was paid a percentage of all that the office did as well as a normal commission on any sales that I did, so there was compensation for my listing work.

Costa Rica Real Estate 101 Book

Back to basics

Prior to starting Horizon Properties I didn’t have any real estate experience.  Oddly, this fact inured to my benefit. My pre-Costa Rica career had been in the managing an art gallery for a number of years. In the art business we never talked about who represents who. I would select an artist to display in the gallery, and the sales team would do their best to sell the works. We knew what the artist wanted for a given piece and we would broker the deal. A sale would happen when both artist and buyer were reasonably comfortable with the negotiated terms.

The non-MLS real estate business in Costa Rica ran/runs essentially the same way. I was well suited to the rough & tumble Costa Rica real estate business and stepped right into it without a hitch. I did however, notice that when I would hire someone who had extensive real estate experience from North America or Europe (or pretty much anywhere else on Planet Earth), there seemed to be a difficult learning curve for them. They were of the “representation” state of mind. “Who’s listing is this?” they would ask. I’d answer “no one’s”. To which they would say: “well then who is going to represent the seller when a prospective buyer wants to make an offer?” to which I would then respond with a puzzled look and say “you will. you represent the seller and the buyer and you will do a good turn for both in your dealings.”

So to understand the real estate business in Costa Rica and the changes that it is going through, we have to understand what it is and what it is not.

NUTSHELL – The Costa Rica Real Estate Business:

Is Not: There is no central database that an agent can access to see what properties are available for a prospective buyer. By extension, there is no representation. (This is changing – read on.)

Is: The real estate business in Costa Rica is OPEN, there is no Multiple Listing Service. Each agency has their own, self-contained database of available properties. This database can usually be viewed online at the agency’s website. This is where the agent will go to look for a listing in the price range and with the features that the prospect is looking for.

Changes: Cooperation between the agencies. The pressure is towards a system more in line with what we see in other countries, more like an MLS. To have a central database of available properties, and to have an agent assigned and responsible for a given property is a superior system to what we use here in Costa Rica. As we grow and change here, we are growing towards an MLS-like system. It has not yet been achieved, but out of necessity, it is mimicking aspects of an MLS as it grows and matures.

It is a common event now to receive an e-mail from an agent in a competing real estate agency describing what a client is looking for, and asking for any listings I may have that satisfy the prospect’s criteria. It is understood that if I provide a listing that another agent’s prospect purchases, that I am inline for one half of the commission. In this construct, there is actually a buy-side and a sell-side, with both sides enjoying that elusive and oh-so-important term: representation. The positive repercussions of this construct are vast and result in a much better chance that full disclosure will result for the buyer, and that the seller’s interests will be protected as well.

You are likely asking: “why not just make an MLS for Costa Rica? The country is not that big. There could a central database of all properties that are available, along with their characteristics. Why not?” Good question. There have been numerous efforts at this. We’ll go more into that in future articles on this topic.

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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!

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.

Apr 212010
 
Training for Costa Rica real estate certification.

The Guys just got themselves certified! Rod & I are now card carrying Costa Rica real estate agents. Imagine that.

I know – you’re saying: “I didn’t know that there was such a thing”. Well, in fact there isn’t, yet, but there is about to be, and so we have joined a number of our peers in anticipating the coming change to the U. S. (and elsewhere) model of licensing for real estate agents.

Training for Costa Rica real estate certification.

Rod being attentive at the Camara de Bienes Raices course in San Jose Costa Rica.

The organization is called CBR or “Camara de Bienes Raices” (Chamber of Real Estate).  Perhaps you’ve seen the CBR logo around on various websites. You’ll be seeing it on ours as well now.  It is a 4 day course of 8 hours a day.  We did it, enjoyed it (for the most part – butts are a little sore.), met & networked with lots of people and now feel just that much more entrenched with our chosen industry in Costa Rica.

CBR has proposed a law that they feel will become adopted this year of required licensing of Costa Rica real estate agents.  Our position is that this will be Continue reading »

Mar 272010
 

Talk Show – Episode 6

Talk Show – Episode 6

Welcome to our full video Talk Show format!  In addition to this new look, we share new information on Costa Rica real estate including, a recap of 2009, recent activity in the southern Pacific zone of Costa Rica, and new issues for buyers and sellers.  This post comes in advance of the new www.GuysInTheZone.com website, where you can find all of the best resources for the area in one place.  The most notable addition to our new site is the forum.  It’s there to give us all a place where we can discuss the various topics that are going on around The Zone.  To all our readers, watchers, and listeners, thank you for your questions and comments, and please feel free to get involved over at our new forum.

Uploaded by GuysInTheZone. – Explore lifestyle, fashion, and DIY videos.

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.