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Russ

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  1. Very interesting thread ! The person selling land says not to trust ANY realtor .... hmmmm. As a person who has been involved with real estate here for over 11 years, I would like to clear up some of the misinformation in the thread. Realtors vs. real estate agents vs. licensing There are two associations here that foment professionalism in real estate. The CCCBR and the GAR. Both are affiliated with NAR and members of either may use the term Realtor. It is true that there is no formal licensing here. So I tend to prefer the term real estate broker or real estate agent in order to avoid confusion. Now given the mortgage meltdown and the way many agents, mortgage companies and banks operated in the US, I am not convinced that licensing is such an important factor. Licensed means that an individual has gone through all the process, but it doesn't tell you anything about their ethics or interests. In any case a person making a big investment, such as purchasing property, has to make judgements about all of those involved in the sale: the owner of the property, all lawyers involved, and any other parties like mortgage brokers, real estate agents and mortgage insurance companies. If any of the parties are not transparent you will run into trouble. Horror Stories vs. reputable brokers A vast majority of the horror stories I have heard come down to 3 principal factors, and none of these involve people who have held themselves out as established brokers or professional real estate agents. - Buying property sight unseen (like from a telemarketer or on eBay or any other web site) - Buying property direct from the owner or developer and without adequate knowledge of the local procedures. - Buying property inadequate for the intended purpose. Sobreprecios I couldn't quite follow the A vs. D vs. C example, that was a little complex for me. However any reputable broker is earning a specified percentage from the seller. It will run from 5 to 10% of the market value of the property. In general homeowners pay 5 or 6% commission, while farmland pays 10% to the broker, because of the lower value additional efforts required. Professional brokers and agents do not engage in the practice of selling a property that is price over the market value as described in this example. It is not good business. The fact is that the old Tico saying is true: "there is nothing hidden between heaven and earth". There is always a very strong possibility that the owner who buys a property on a "sobreprecio" will find out that they paid too much. It may be as simple as their circumstances changing and they suddenly have to sell the property and they learn what the true market value is when they try to list it. FSBO vs. Brokers If you are ready to invest the time and energy to get the connections you need to learn about the area you want to buy in, then you may consider going through a for sale by owner web site or look at properties from La Nacion or The Tico Times and contacting the owner yourself. After all, you can pocket the money the broker will earn right? Except that the seller is probably trying to pocket that money too! So who will get it? Plus, how did the seller price the property? In our experience, owners tend to have an inflated idea of what their property is worth. After all, if they have owned it for any length of time they have probably made improvements and have fond memories of good experiences they have had there. One of the first jobs of the listing agent is to discuss with the owner the question of setting a realistic price for the property. On the other hand, working with a reputable broker will save you time and money from the beginning. You get instant access to their experience and knowledge, not just of real estate in general but all the ins and outs of relocating to Costa Rica, plus invaluable advice on the area you are moving to. They are listing properties that they know will meet the expectations of an expat buying property. A big problem with classified ads is that you have very little information to go on, and you have to believe what the owner tells you on the phone. You will waste a lot of time seeing properties that don't have enough closet space, bathrooms or bedroom area when you look at classified ads. By comparison a good agent will pre-screen properties and won't list those that don't meet certain standards. Finding a reputable broker There are a lot of questions that you can ask of and about any broker to find out what their experience is and how they run their business. Here are a few to get you started: - How long have they lived in Costa Rica? In the area they specialize in? - How long have they been an agent? Have they owned other businesses in Costa Rica? - Do they own property themselves? - Do they have a web site? An office? A land line? - Can they give you references? - Do they work real estate full time? Also trust your instincts. Does the person have more than one property they can show you? Do they seem more interested in making the sale, or more interested that your needs are met? Do they work with other agents and brokers? In summary, an experienced real estate agent can be an invaluable resource for you when you buy property in Costa Rica. While you cannot trust ALL brokers, it is totally unfair to say you cannot trust ANY agents. Good brokers aren't so hard to find and you will be amazed the resources they can bring to bear to help you make a smooth transition.
  2. Many people who are buying property in Costa Rica wonder if they should use a holding company to own the property or keep it in their own name. There are several good reasons to use a Corporation (S.A.) or Limited Company (SRL) to own property. Asset protection – If someone in the US or in Costa Rica would like to sue you, they will have a harder time finding property in a company name, rather than in your name. Simply because they already know who you are, but they would have a hard time guessing what your company might be called. In another instance, if you run into a personal liability situation (like a car accident) the company cannot be held responsible for your liability. That means that your house is protected. Transfer Tax savings - If you are buying or selling a property that is in a company name, you avoid paying the transfer tax in the National Registry, since the name of the property owner will not change, only the shares will be transferred. Estate Planning – With the proper legal advice, a company can assist you in lowering your estate taxes. You want to be careful though about developers who offer you land in a corporation. Holding shares in a company you own that holds land you control is one thing. Holding a share or two in a company that has many share holders and owns land that they all own together is another thing entirely. Some smooth operators have tried to circumvent regulations that developers must follow in order to legally divide a farm into lots through this scheme. The problem is that as a share holder you have no way of proving ownership of the land you built that beautiful mansion on. You are not legally protected as to your ownership, and even the size of your lot or its divisibility could be thrown into question. As to the residency question, in some cases people used S.A. s holding real property to qualify for empresario status, but I believe that is no longer viable. As to safety question, you are perfectly safe holding property either in your name or with a company you own, Foreigners have the same rights as Costa Ricans under the law, which has also been upheld many times by the Constitutional Court.
  3. Check out this article for complete details: Costa Rica Mortgages: Getting a home loan. What financing is available for homes or other property in Costa Rica. How foreigners can qualify for loans and where to get them. You will get better rates from US banks but they won't loan directly on Costa Rican property, it has to be a second mortgage or personal loan.
  4. The price sounds very reasonable, I was just in that area looking at the Iguana Land Company developments and scouting the area as it is going to be home to a new office for our group. Jim and Ben are charging around $10 / m2 for 5000 - 7000 m2 lots. The lots are inside a development and with an ocean view so you can figure that they would be worth more than what you are describing. Which means that it sounds like you are getting a pretty good deal for what you describe. I would suggest visiting the property again on different days of the week and different times of day in order to confirm your first impressions.
  5. I went there, and I agree that it could become a good forum. Thanks for the tip!
  6. Hi Pete, I would say yes and no it is possible. A lot in a gated development could be pre-purchased and increase substantially in value within a reasonable time frame. The market in Tamarindo, Flamingo and Jaco is really crazy right now, so lot prices of $150 per square meter or more are not unheard of within developments. However you have a few red flags to watch out for: - They contacted you, was it by any chance a telemarketer? - Who said it is an unbelievable deal? TicoGrande is right, there are no unbelievable deals - This sounds a lot like a scam that is all over the place now. 1) You have to pay before you can see the property. 2) The lots aren't actually subdivided, you only buy shares in a company that owns the development. 3) There is no infrastructure in place so you can't live there or build yet (no water or power) Anyone who wants to buy real estate here has to take certain precautions: - DON'T SEND MONEY!!!!! Money for real estate transactions is placed in escrow, or you pay when you are actually sitting in the lawyer's office (hopefully your own lawyer) and the seller signs the papers. After all due diligence is completed of course. - Don't buy a property you haven't seen in person. Especially if you have not seen and priced any property in that area or in Costa Rica! - Get references. Before you decide to deal with a realtor or developer, ask them for references from clients, other professionals and business associates. - Watch out for hyperbole. Real estate in Costa Rica (anywhere) is valued according to the location and infrastructure. You can find good deals, but you can't expect to triple your money in one year. - Get informed. A normal developer will post all kinds of information on their web site, including directions to the property. Company information like who the officers or investors are and what kind of experience they have. I am of course biased, but I would tell anyone who is looking for property in Costa Rica to find a reputable realtor and use their experience and knowlegde.
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