Avoid Real Estate Scams

But please beware, there are con artists out there and they are waiting to find someone who is uneducated about Costa Rica, the laws, and the Real Estate market. These con artists come in all different shapes and sizes they may speak perfect English, they may be very friendly, they may even be from your home country. Ask for references before you commit to working with anyone.

• All Real Estate Agents are not the same. In Costa Rica there is no standard licensure requirements for Real Estate Agents. Anyone can be an agent. A person does not need to have to be educated in Real Estate, take a test, training, or experience to be a Real Estate Agent. This can lead to problems for you if the person is under qualified, giving bad advice, over pricing properties, or selling conflictive property just to make a commission.
• Just because an agent is from your home country does not mean that you can immediately trust them.
• There is no regulation over any Real Estate Agents so if they do something detrimental in your Real Estate Deal there is really no recourse you can take against them.
• When viewing a property even if you love it, try and use your poker face and be as objective as possible.
• You can negotiate on a price if you like, you never know what you can get just for asking.
• You can find the exact same property listed at different prices from different companies depending on their commission structures.
• Sometimes agents in larger deals will attach an overprice that they will split with or without the owners knowledge. This even has happened to a big Hollywood star when he purchased his property in Guanacaste.
• So far there is not a widely used Multiple Listing System (MLS) as there are in North America so there is no way to see all of the properties available at the same price and there is no real way to gauge prices exactly in an area.
• Due to the lack of an MLS you will never get a fair viewing of all available properties that meet your criteria from just one agent.
• All legal documents will be in Spanish. If they are in English, there is also a Spanish version. Double check to make sure they are identical and you know what you are signing.
• Have due diligence preformed on your property before you purchase by a credible lawyer or title company.
• Avoid using the same lawyer as the seller. You need to have someone who is unbaised working for you and you only. Your lawyer needs to examine your property with a microscope to make sure there are no hidden risks.
• Know what you are buying and pay for only the portion of your property that is useful and you can build on. For example, if your property is near a creek or river you cannot build on anything 15 meters from the creek, so why should you have to pay for those 15 meters by however many more?
• Make sure your property has all its documentation in order.
• Especially make sure you minimally have water & electric services, the municipal property taxes are paid. If not you have to pay huge sums of money to fix these types of issues.
• Insist on meeting the owner of the property if you can this will not only help you avoid scams by agents with overprices, or buying a property that is actually not owned by the person you think you are buying from. Owners are extremely helpful at telling you about their home and can also set off red flags for you if there seems to be something off.
• Read contracts carefully, to be sure you are seek out professional legal assistance if you feel it is a significant purchase.
• Never count on anything from a verbal agreement and a handshake, things do not work like that here in Costa Rica, if it is not on paper it never existed.
• You are not guaranteed the property you put money down and until after closing. Up until closing a variety of different scenarios could pan out which causes you to lose the property you want:
1. If the commission was to be split between two agents and one decides to burn the other the deal could fall through.
2. If an owner decides to not honor an agents commission the agent could steer you in another direction.
3. An owner decides that now that they have a buyer they will "invent" a second competing buyer who is offering more.

We have seen a lot in our Real Estate careers here. Of course as agents there have been occasions with other agents or owners who have not respected commissions. Even once a housekeeper tried to steal one of ours clients and show them other properties. Perhaps one of the worst things we have seen are people put offers on properties thinking they can sell them to another foreigner for a higher price. For example, today John Doe puts an option to buy contract with a deposit on a big piece of development property he feels is underpriced. Then in 6 months he has to start making payments or he loses his deposit, so he looks for another buyer of the property that he can sell it for even more to you by putting an overprice on it plus a sales commission.

Please be so kind and share your insights to inform others of potential risks!