Note: The Costa Rica Star has published about concerns in the Costa Rica Real Estate market here in the San Jose valley in the past, the interview below confirms our thoughts from an industry veteran who has been developing on the Pacific coast for many years.

Randy Berg, we’ve interviewed you before in The Costa Rica Star and many of us here have seen your casitas and developments.  Is it OK if we ask you a few more questions that we think our readers would like answers to?

Randy: Sure.

Marcel: You have been here almost a decade, you’ve seen the “good, the bad and the ugly”. What upsets you the most?

Randy: Well, a couple of things. Most people know that there are very few rules and regulations when it comes to real estate and construction in Costa Rica. The lack of regulation and lack of good, solid information causes major problems for the real estate buyer.   

Marcel: How so?

Randy: Well, if you study pricing and go to various websites on real estate you will see pricing for construction ranging from $30 to well over $100 per sq. foot. That is a huge range. No one on the outside… and sometimes even here in Costa Rica… knows what reality really is. I have seen websites tout $100 a sq. foot as a “huge bargain” and it isn’t even close. The developer will claim that distance, climate, all sorts of factors influence the price… and they do… but only in reality by a few percentage points.  
 
And because of lack of guidelines buyers do not know if what they are buying is a good, bad, or average deal. It makes me VERY upset when a realtor quotes $100 as a good price on the central pacific for construction when he knows better. People with the biggest websites and with the deepest pockets tend to have the most “perceived” credibility.

There is also a problem with land and property values… because there is no MLS or widespread MLS, (there are smaller versions but no real continuity )… values tend to be “all over the place.”  

Marcel: What can be done? If anything?

Randy: This is really a perfect example of where “doing your homework and due diligence pays off.” I have seen land fluctuate by as much as 500% within a couple kilometers radius. It really does pay to take your time, study the market, but also … to be ready if something exceptional does come along. The markets in Costa Rica are nothing like the States or Canada where they are highly regulated. There is opportunity to make huge money and there is the reverse… to lose your shirt.

Marcel: Is there a reliable source of information?

Randy: That is another part of the problem. Because there are no licensing requirements everyone sees himself or herself as a realtor. And because there are no official guidelines anyone can “markup” a property to any level they choose. There is no law against it. It used to be a lot more common when the markets were redhot but it still happens, especially when the potential buyer has no clue what is a “good buy” or a “bad buy.”

Marcel: What are some of your other pet peeves?

Randy: It bothers me when larger companies, primarily those with huge circulations, recommend specific projects and areas of the country when they really have no idea what is a good buy or not. They don’t live here, don’t know the markets and yet, portray themselves as experts. These are the same people that say that $100 a sq. foot is a great deal… well… it isn’t. More like half of that amount is closer to a great deal.  

Marcel: Anything else?

Randy: Well, quite a bit but I guess one last thing that is head and shoulders above anything else is the simple fact that people really don’t how many so called experts arent really experts. There are people out there with pretty good followings that make recommendations but don’t disclose that they are getting a commission for their recommendations. That is just plain dishonest.    

And if anyone has a doubt or wants to know if that so called expert is getting a commission, just ask. You’ll know by how they answer. This is not just about real estate either, it covers almost everything… from cars, to land, to anything where money changes hands. It is kind of an underground, unofficial marketplace. Most of the time it doesnt change things much but if we are talking a high ticket item like a house, we are talking several thousand dollars… then disclosure should be automatic. But it isn’t.

Marcel: So… how do you prevent being taken advantage of?

Randy: I could be cute and say “deal with someone honest” but everyone says they are. Even when you receive a referral, oftentimes you wonder if there isn’t a commission involved. It is not easy to know. Sometimes it is easier just to accept the fact that it happens … and if a larger amount could be involved… take your time and do your homework. Ask a lot of questions.  
Marcel: Thanks, Randy. That is a lot to think about.

Randy: You’re welcome. 

For more information please watch this video below of Randy Berg speaking about the CasitasForSale.com Real Estate developments. You can also read a Press Release about the Agujas Beach project and download the FREE eBook about Costa Rica courtesy of CasitasForSale.com.

CasitasForSale.com
(506) 2643-2691
877-284-6843
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