Although the real estate industry of Costa Rica is not regulated at the government level in terms of licensing, the substantial number of home buyers and homeowners from the United States and Canada has resulted in an adoption of some of the North American customs and procedures in terms of buying and selling properties. The mortgage lending and closing processes may be different, but the property listing, marketing, advisory, and negotiating processes in Costa Rica are handled in a manner that is very similar to North America; to this effect, you can find both buyer’s and listing agents who can handle your real estate needs.
Many of the procedures established by the U.S. National Association of Realtors are practiced in the real estate market of Costa Rica, and these include the selection of professionals to carry out property acquisition and sales.
Here are the duties of a buyer’s agent .
* Finding suitable properties.
* Negotiating real estate offers.
* Recommending other professionals to move the transaction towards the closing table.
* Provide advice to home buyers as to how the transaction should be handled and to help overcome setbacks.
The NAR defines the duties of listing agents as:
* Maintain a fiduciary duty to property sellers.
* Represent the interests of homeowners.
* Handle the listing, marketing and staging of properties.
* Negotiate with buyer’s agents to obtain the best terms for the sellers.
It is not a good idea for buyers in Costa Rica to rely on the services of listing agents who are representing sellers. Real estate representation in Costa Rica can be formalized by means of a signed contract. Unless a buyer has a contract with an agent agreeing to represent his or her interests, the buyer should assume the listing agent represents the seller’s interests and not the buyer’s interests.
In an active, organized and regulated real estate market such as in the United States, property owners sometimes try their luck by listing their homes on a “For Sale by Owner” basis, thereby bypassing listing agents. This is often done for the purpose of avoiding the payment of listing fees and real estate commissions; however, market research studies show that the average FSBO transaction closes at a value that is 13 percent lower when compared to transactions handled by listing agents.
In unregulated and developing real estate markets such as in Costa Rica, there is a greater need for property sellers and foreign buyers to have professional representation; for this reason, foreign homeowners and buyers should make it a point to retain real estate agents. If you have previously gone through a closing in North America, you will likely feel overwhelmed in Costa Rica unless you have an agent working with you; a single mistake in the process could not only derail the transaction but could also result in a lengthy and expensive legal dispute.