Sales Process Overview Part I

Down and Dirty:

• Pick your real estate agency


• Pick and Consult with your agent


• View properties


• Make an offer either in writing or verbally through your agent to the seller


• Negotiate the price and terms


• Get signed Offer To Purchase document to lawyer that outlines the details of the deal so that he/she can draft the Purchase and Sale agreement


• Deposit 10% with the accepted offer. The deposit is “non-refundable” with the exceptions of the contingencies mentioned in the offer. The deposit is held in escrow until closing.


• Due Diligence period


• Close

If you want to know specifically about any of the above details without reading through this entire 3 part article, please click on the bulleted point above to go directly to that information.

Pick your real estate agency

I’m not really sure how this happens. Some may pick an agency that they are familiar with already. This may be a large known name brand real estate agency such as ReMax, or Century 21 or some such thing. I benefit from having this blog and receive a good number of clients to my non-brand name agency by those that have read information here. Sometimes it’s a matter of walking by and spontaneously stopping in.

The usual guidelines apply in Costa Rica that apply anywhere as regards “good business”. You want an agency that has a good reputation, has been around for awhile, and that you feel treats you right. Going with a known brand-name is no different in Costa Rica than going with any other agency. There is no licensing of real estate agents in Costa Rica, and all agencies should be concerned about their reputation. Getting a referral from someone that has had a good experience in real estate here would be a help.

Pick your agent

Within the agency that you choose there will likely be several agents. It’s a little tough at this point to have had a discussion with one agent, realize that there is no chemistry, and ask to talk to another one, but I don’t think that it is prudent to proceed with an individual that you don’t feel comfortable with, or that you feel doesn’t have your best interest at heart. Some simply decide to move on to the next agency and try there.

Consult

When you have your agent, there needs to be some talk talk. He/she will need to understand the purpose for the purchase and your budget.

Generally, we will start with a consultation that involves sitting in our office in Uvita, but it can be over a cup of coffee in a soda, and discussing the objective of the client. Why are they here in Costa Rica looking to buy a property? Most investors in Costa Rica real estate fall into one of about 4 different categories:

1. Re-locators


2. Land-bank investors


3. Income generating investors


4. Migrators


5. End of the world escapists (Ok, so there’s 5)

Relocators:

These are those who are looking to live in Costa Rica. It may be immediate, or at some point in the future. Most of my relocation clients are looking to move down in the future. They may be about to retire in a few years and want to secure their property now, while prices are still affordable. Or they may be a couple that simply want the Costa Rican lifestyle and perhaps are financially independent, or are able to work on the Internet, or tele-commute in some fashion. This may or may not involve children. Relocators may be part of a larger group of friends and/or family that want to put together a compound and live a simpler life. Then there are the escapists that are looking to secure a remote part of Planet Earth for what they feel is the coming fall of society.

Migrators:

These are the retired and/or independently wealthy, or the tele-commuters that will spend their homeland winter months here in Costa Rica, and the other 6 months back in their homeland. (I know that the term “homeland” has taken on a negative connotation in recent years in the States, but for the purpose of this document it is used to identify the client’s land of origin.) The migrators may or may not want to rent out their property while they are not in Costa Rica.

Land Bank Investors:

“To purchase land for the express and sole purpose of storing money until such time as it may be sold for a decent rate of appreciation.”

The above definition, as eloquent and literally astute as it sounds, is not copied from some academic reference. I made it up. This is the easiest way to be involved in Costa Rica real estate. All it involves is making an informed decision, buying the property, and waiting. This has made up a large part of our business in the southern zone of Costa Rica. It is now starting to change more with the number of migratory types and re-locators coming in which is resulting in a huge wave of construction.

Income Generating Investors:

Purchase a piece of land that will generate income on a regular basis. Purchasing an ocean view lot and building a nice home on it of, say, 2,400 square feet, and furnishing it nicely, can generate some pretty decent vacation rental income. In the Dominical, Uvita and Ojochal area, the vacation rental prices range from $1,200 - $7,000 a week. I’d say that $2,500 per week is common. You can see what these look like by visiting the Dominical.biz Vacation Rental page. This is a popular purchase purpose since the investment can return a cash on cash of 8 – 12% while the asset appreciation is running somewhere around 20% annually, AND that’s not all. Here is the Ginsu knives add-on that can come with an income generating real estate investment in Costa Rica: you own a beautiful vacation spot for yourself, friends and family.

End of the World Escapists

These are kinda rare, but they do happen, and they do seem to look towards Costa Rica with regularity. These usually want a large piece of land with water on it. They aren’t that concerned with investment potential.

Buying Land in Costa Rica - The First 2 Steps

It is assumed that by the time you find this info that you have probably searched the internet for "Costa Rica real estate" or "buying land in Costa Rica" or "Dominical real estate" or some facsimile thereof. You have likely perused countless listings and considered the bountiful information on how to visit Costa Rica (airline tickets, car rentals, hotels, etc.) Just getting here, especially if it is for a family, requires some time-consuming planning. I got to thinking... since typical tourism travel to the tropics generally requires the same stuff, you know-- shorts, light fabric shirts, sandals, sunglasses, a hat and some sunscreen, with these things you can pretty much get around the tropics in whatever part of the globe you're going to. But if you are coming down to look at land, well that can be a twist that can leave one sandal-clad in the jungle with a rash up to your knees. So, here is a step by step for those whose next visit to Costa Rica is for the express purpose of shopping for real estate.

1. Make an appointment:

If you are looking for land anywhere south of Quepos (Matapalo, Hatillo, Dominical, Platanillo, Uvita, Ojochal, etc...) you will find when you get here that getting a realtor's attention can be a bit tricky. There is a real estate boom going on, and its not so much that the real estate agents are getting snooty... well maybe it is, but I know that in the case of my office, there have been times when we are hard-pressed to have the office manned, womaned, or peopled. If you make an appointment, you will get put into the calendar and get the undivided attention of myself or one of my associates. (Please click here to go to our contact form. There you can send some of the preliminary information that helps us to help you get your property.)

2. Bring the right stuff:

Footwear is a big concern. A number of folks have come in wearing the Keen brand sandal-shoe hypbrid. These are cool, and everyone goes on about them. I got myself a pair and they are cool insofar as they are different. I get asked about them quite abit, and there seems to be a brother/sister-hood among those that wear them. But for stomping about in the jungle... not so good. Entirely closed in shoes/boots are better.

Bring some hiking boots. I recently discovered that using rather thick hiking socks, made of some kinda synthetic material work great. I was surprised to discover that they were actually cooler than my here-to-for exclusive use of cotton socks. Obviously if you are coming down to view exisiting houses, or say... Canto Del Mar condos, you will be fine in flip flops, which by the way, are my footwear of choice when I am not in the jungle. For rainy season, I always wear rubber boots in the jungle. During dry season hiking boots are fine with sneakers a distant second.

A good hat. Sun is another big consieration here. I like the broad rimmed variety since I get a red neck with a ball cap. There is a lot of sun here, even in the shade. A hat can make or break a day's outing.

Sun screen if you're not a hat wearer... or even if you are.

A wattle 'a botter. A carrying thingy that goes over your shoulder, or around your waist for a liter of water is super-deluxe. At the very least, remember the bottle as we head out, and be sure and remind me to do the same.

Bug repellant. I don't use it myself and I find that I get very few bug bites. But, there does seem to be about a 3 week period when you first get here when your legs are going to get nibbled on up to about the knee. I'm not sure what happens at 3 weeks, either we become distasteful to the little beggars, or they continue to nibble and the body simply quits taking notice. Since the land buying visits don't normally exceed 3 weeks, it is probably a good idea to bring some kind of defense against these guys. For those that are moving down, I have a theory. It seems to me that among my friends here (yes, I do have some friends here :o) that use bug repellant, they seem to continue to be "bugged". Since I was bugged initially, and now am not, I wonder if maybe letting it all run its course isn't the path of profound wisdom. This is a bit of an ongoing debate here among some of my collegues.

Coming next: Strategize!