Top 5 Mistakes People Make When Buying Property in Costa Rica

5 Mistakes People Make when Buying Property in Costa Rica header

Look I get it. You are smart, you’ve bought plenty of property in your life, made tons of investments. You know how to research and you can figure things out, so when it comes to buying property in Costa Rica this should be no different. Sure, maybe you’ll have to read up a bit more, be a little more careful but you’ll figure it out. Riiiiiiight, good luck with that.

It has been over 12 years now that I have been living in Costa Rica where I have been helping people with real estate transactions. In that time I have seen countless mistakes that people have made in both their decision and sales process. Unfortunately many inquiries I receive come from people who need help fixing their bad decision. Here are some of the most common mistakes I have seen people make when buying property in Costa Rica, along with some tips on how you can avoid those mistakes.

5 mistakes people make when buying property in costa rica 1

Searching for Property on Your Own

The most important thing to know about Costa Rica real estate is that there is no MLS (multiple listing service). So that means if you are going to try to search sales info, comps, and listings you are going to have to sort through the thousands of listings spread throughout the internet, most of which are dated and/or inaccurate. Again there is no MLS, don’t be mislead with some offices or brokers advertising their sites as an MLS site, there is no such thing and it is just a marketing ploy. Unfortunately many brokers do not update their listings or simply have inaccurate information about the listing. I have had countless clients send me listings they saw online which in some cases were listings that sold 3-4 years ago! Listings with incorrect pricing, incorrect size and sometimes not even the correct photos of the actual property! Searching on your own is going to either drive you mad and leave you with an inaccurate assessment of the market.

Solution

Nothing wrong with searching for properties online, but find someone that you can consult with. A solid real estate broker will be able to guide you with all listings, helping you to confirm accurate information and better educate you along the way. A broker can help you with any listings out there. What I tell my clients to do is just send me any listings they see online and I can confirm if it is still available and/or line it up for them to see, but get the help of a professional and don’t try to do it on your own.

Going to Fast

There are times where a great buying opportunity pops up, but if you haven’t done the homework, put yourself in the right position, evaluated the market, and learned the country more then how do you really know what is a great opportunity let alone prepared for it? Take your time. I have seen people that have rushed their purchase for no reason.

Solution

Come up with a game plan and a time frame to purchase. Spend time in the area you are wishing to buy property. Many properties in Costa Rica are available as a vacation rental, I often encourage clients to stay in a property that is on their wish list so they can get a better feel of that property and area. Don’t be in a rush and take your time in finding the right fit for you.

5 mistakes people make when buying property in costa rica 2

Not Learning the Market

It amazes me how many people purchase property without really understanding the market. This is a big investment and before purchasing you should have a better idea of the real estate market in the area you are purchasing. You should have a better idea of comparable priced listings, sold comps, accurate rental numbers. Many people simply rely on what a sales agent might be telling them versus getting the information they need to understand the market for themselves.

Solution

I always tell my clients that my first job is to educate them on the market. To give them the info so they can better understand options and values. At the end of the day I want them to understand where value is not because I’m telling them, but because they understand and realize where those values are. Take the time to learn the market for yourself so you can make a smart decision.

Ignoring the Follow Up

Have you ever owned a second home or vacation property? If it is your first then you definitely need to understand that you do need to put in a little effort in on your part. While you might elect to have a property manager assist you, there are items that you do need to make sure you are following up on. Property taxes, corporate taxes, HOA meetings, yes you can have someone help you with all of that, but it is important you confirm and ask for receipts if so. If you are part of a homeowners association, be involved so you know about any changes that effect your property.

Solution

Stay on top of things. Reach out to your property manager, attorney, broker whoever you need to so that you are ensure bills are being paid. Dont assume everything is being done, no need to micro-manage either but quaterly or bi-annual checkup should suffice.

Choosing the Wrong Real Estate Agent or Using Multiple Agents

Oh boy, sadly this is the culprit of many bad decisions. It is important to understand that Costa Rica has no regulations or licensing when it comes to real estate agents, which basically means anyone with a pulse can sell you property here. Unfortunately many purchasers don’t properly vet the person they decide to have represent them, which you can imagine can be a pivotal mistake. And don’t be mislead thinking that just because you chose an office with a brand name that it will be any better. Just because an office might have a big franchise name it doesn mean they have any additional requirements that help to protect you. Some of the big name offices have some of the most inexperienced and unethical agents I have ever dealt with, so don’t let your guard down. It is also important you choose one person to work with. A broker will be able to collaborate with other brokers so you only need to choose one person that is working for you. By having multiple agents involved you just end up encouraging a feeding frenzy where brokers then instead on focus on selling their property to you vs working for and representing you.

Solution

This is really a paramount decision and it shouldn’t be taken lightly. Don’t be afraid to ask tough questions and find the person you feel comfortable and confident to represent you with your search and sale. Go ahead and talk to a few different people, BUT once you make up your mind choose ONE PERSON to work with. Ask to talk to some of their past clients, make sure they are a legal Costa Rica resident, talk to them over the phone, get to know them, the right person can be instrumental and making sure you have a great experience.

About the Author – David Karr

Costa Rica is a beautiful country, but when it comes to making the move and researching Costa Rica further, most people become confused and frustrated. Finding someone you can trust and depend on is the most important step. Originally from Washington State, I’ve been living in Costa Rica since 2005, where I reside with my wife full time in Jaco Beach, since then I’ve been consulting and guiding people with real estate and living in Costa Rica. I work with the top attorneys to ensure your transaction is safe and secure, while providing clients with in depth market analysis and inside information so they can make the best decisions possible.

Costa Rica is a beautiful country, but when it comes to making the move and researching Costa Rica further, most people become confused and frustrated. Finding someone you can trust and depend on is the most important step. Originally from Washington State, I've been living in Costa Rica since 2005, where I reside with my wife full time in Jaco Beach, since then I've been consulting and guiding people with real estate and living in Costa Rica. I work with the top attorneys to ensure your transaction is safe and secure, while providing clients with in depth market analysis and inside information so they can make the best decisions possible. My expertise is in the Central Pacific and Jaco region, but can assist with all parts of Costa Rica.