We’ve had a week full of working with buyer-type clients, but they definitely fit into what the “Man Says There’s No Market here” article says below. I’ll call them the Schmuggerdoos. They are intent on buying some land, they came here to buy land, they found land that will suit their needs and budget, but that extra spark of “I think I’ll buy this property now” is lacking. They are going back home so that they can return in a few months, maybe, and buy something then. It’s been a great week though. Rod & I enjoyed getting to know the Schmuggerdoos quite a bit and hope they realize their dream of moving to Costa Rica. We also are enjoying the ever expanding cooperation between the real estate agencies here. It is proving to be a real value-add for both buyers & sellers, and it’s improving the quality of life among us real estate professionals. Prior to the Schmuggerdoo’s arrival I had sent their criteria to the other agencies in the area, who responded by sending links to listings on their websites that fit the criteria. Here is their criteria:
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.
In 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.
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…
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.
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:
Imagine this: you are interested in buying a piece of property in Costa Rica’s southern zone, so you walk in to one of the real estate offices in say – Uvita. You consult for awhile with an agent there. (For the sake of this article, lets call him “Ben” :o) and off you go looking at properties that fit your interest. After looking at all that Ben has to show you, nothing strikes you as the right piece (hard to imagine, but it has happened a time or two).
So far not a lot of imagination has been required. Here’s where it gets a little more difficult.
Ben says: “how ‘bout we pop on down to this other agency, some competitors of mine down by Ojochal, and see what they’ve got” or “Let’s go on up to an office of my peers in Dominical that’s been around for years. They’ve probably got a few listings that I don’t that may be a perfect fit”.
I know – hard to imagine, but stay with me here.
Last Saturday marked the 2nd meeting of… well frankly I’m not sure what. I’m not being evasive – we actually don’t know what to call it: Costa Ballena Realty Board? Association of Real Estate Professionals? There were a few other names tossed about: Think Tank, Master Mind Group, Coffee Talk… whatever it ends up being, it holds the key to making the real estate buying and selling experience in our zone 10 times better than what it currently is. (I like “Unified Realty Professionals”. This could have the distinguished acronym URP which would be said something like – well, like ‘urp’ which would bring to mind the satisfied feeling one has having just enjoyed a good meal.)
Ojochal, Uvita, Dominical, Hatillo Platanillo and San Isidro are the towns that make up “The Zone”. There are numerous real estate agencies in these towns. Some with recognizable names from other parts of the globe such as Coldwell Banker, Century 21 etc… Then there are the “no namers” such as yours truly with Dominical Dot Biz Select Properties, and there are many such private label real estate companies.
The objective of the meeting was to improve our ability, as a unified and cooperative group, to serve people who want to either buy, or to sell property in our zone. This is a beautiful, and much needed thing.
The meeting was attended by the owners of Osa Tropical Estates (Ojochal), two of the Coldwell Banker partners in the Dominical office, The Land Company (Dominical) principal and myself (Uvita). We all have knowledge of all areas of The Zone, but have greater expertise in some areas over others.
It was agreed that the non-MLS (Multiple Listing Service) business model in Costa Rica makes it difficult for sellers and buyers. The core problem is the lack of REPRESENTATION available to our buyers and sellers.
When a buyer spends a day or two with a single realtor looking at property, they are only seeing what that particular real estate agency has for listings. To really know that they have seen everything, a buyer would have to
The absence of an MLS or Multiple Listing Service causes an interesting challenge for those that would like to sell a property in Costa Rica (I wonder how many articles I have started with those words). In the U.S. you simply list your property with your favorite real estate agency and voila! Your property is … Read more
Is there a Multiple Listing Service in Costa Rica? As a person browsing the internet looking for Costa Rica real estate, one will have seen the terms “MLS” and “Multiple Listing Service” numerous times. What this term means when seen on a Costa Rica real estate site varies greatly from what it means on real … Read more