I hate titling an article with the words "Big Mistake", but I feel it's important to warn potential sellers about an issue that frequently occurs in this country.
Let me start by saying as a professional real estate broker in Costa Rica, I come across some crazy situations. Sometimes sellers are unrealistic. Of course, this happens to brokers worldwide but it seems to be a recurring theme here. Let me give you some background and facts before you start slamming me with your thoughts, as I am sure this article will provoke some from sellers that may read it.
Here in Costa Rica, realtors are not licensed by the government; meaning just about anybody can be a realtor (and believe me many do try). However, there are two government recognized real estate associations, CCCBR “Camara Costarricense de Corredores de Bienes Raices” or in English “Costa Rican Chamber of Real Estate Brokers” and the other is CRGAR “Costa Rica Global Association of Realtors”. I happen to be a member of both and a past board of director member for CRGAR. To be a member you have to go through the associations’ classes and pass tests in order to receive a license from them. By being a member of both associations, I am also a member of NAR, the National Association of Realtors that is based in North America. So I have a really good working knowledge of what's what in Costa Rica real estate as I have been here for almost seven years now do it.
Most people believe that a realtors’ main job is to get the best possible price for the seller, which is true, but it is only part of what we need to do to help the seller. The responsibility of the broker is also to help the seller understand the ramifications of holding onto a property to long. As an example, more taxes, or homeowners’ association fees, maintenance of the property, property manager and the list goes on. The broker is also a sounding board and has a wealth of information to help the seller.
Here in Costa Rica most of the sellers invested between 2000 to 2006 when the market was a new "up and coming" market and screaming hot. Many people purchase property because of all the great things that Costa Rica has to offer. But over 60% of buyers never really planned on living here full time. They purchased either for investment purposes or for a second vacation home. As we all know in life, the best-laid plans can quickly change.
Well, the Costa Rica real estate market has changed over the past 5 years. More and more buyers are actually looking to relocate to Costa Rica full time - for tons of obvious reasons (but that’s a topic for another article) - and many of those selling have changed their plans as well.
So, getting to the point, one of the biggest mistakes a real estate seller makes, but not the biggest, is overpricing their property from the get-go. Even though the brokers may interview and finally decide on telling them otherwise, they just do not listen. I personally have been interviewed by some sellers that when I recommended a selling price they call me every name in the book. I have heard statements such as: "Oh your just trying to get me to a lower the price so you can make a quick buck” or “ are you kidding me? I paid $$$$ for my property and I want to make a profit on it!”…and the list goes on.
In my professional opinion, a big mistake a seller can make is to say “I am insulted by that offer, it is too low and I will not even counter back”. This is just plain lunacy! Real estate is a business. Too many sellers let their personal feelings get in the way of selling a property. Never be the one to walk away from an initial offer, always counter back!! You have nothing to lose and everything to gain - such as selling your piece of real estate!
I am writing this because I am facing a situation like this right now. I presented an offer to a seller. The seller's property is priced according to the market and not overpriced, although it did take two-plus years to get the seller to see the light and finally price it right. So you can’t say I was trying to make a quick buck. So I presented an offer to this seller two days ago, I immediately called them to discuss and emailed then the signed offer to review. We spent almost two hours on the phone discussing it and the seller said they would get back to me. This morning I get an email from the seller basically saying “I do not accept the offer and tell the buyer to jump in a lake”. Here we go, BIGGEST MISTAKE EVER and dumbest mindset ever!!! By not countering back they let a potential sale slip through their hands. The smart thing to do is always counter back. Take the advice of the broker they hired. He or she is the pro (at least if they hired a professional). Yes, the price may not be what they want, but in three years with no offers at least it is a starting point.
So after receiving this email I called then right away and discussed. They hired me to sell the property not fold like a house of cards when the table gets knocked a bit. I spent another two hours on the phone helping them realize based on market comparable properties, the present condition of the market, the condition of their property and a whole lot more, that they should never be the ones to walk away at the first offer. Let the buyers be the ones to walk away from a counter offer.
Just because an offer is low does not mean the buyer may not have more money to spend. Think about it - let's say you want to buy a car - do you offer to pay the sticker price? Or do you try to negotiate the price down? Real estate buyers do exactly the same thing. They are trying to get the best price for a property they like. So, don’t be offended! Be smart and don’t make the mistake this seller just made when you are trying to sell your Costa Rica property.
If you don’t own property in Costa Rica, you should consider it as there are still some really good deals out there.
Thanks for stopping by and send any comments to me. If you have an interest in real estate or just starting to get a feel for the Playa Hermosa area of Costa Rica, click this link to my personal web site for more information. www.costarican-american-connection.com or send me a note and I will help point you in the right direction. “Pura Vida”!