Don't buy Costa Rica Real Estate, it is overpriced

[Music] my name is richard lacey tamarindo rich i've been in costa rica since the 1990s i've bought and sold properties all over the country and i've advised hundreds of buyers and sellers on on the best way forward with their properties if you like today's topic then please subscribe below please click on alert so you get advised the next time a video goes out we try to do one every friday whenever we can [Music] today's topic is don't buy property in costa rica it is overpriced and it's something i've heard many times over the last 10 12 years i have a database of over 20 000 people that get my newsletters every couple of weeks we've shown properties to 15 20 families sometimes a week we're selling multiple properties a week but we get a lot of feedback generally very positive about the market here especially as i become more visible on social media i get trolls coming in saying no this is an overpriced market why would anyone buy here and so i just wanted to address that because it's a very frustrating thing and it's fine if people have analyzed the situation and then made their decision yeah it's fair enough everybody's got their opinion people sort of tend to throw out these comments without really studying the situation it's very frustrating for me you know we're professionals and we're trying to give a good advice so people make the right decision for the next move in their lives and i just wanted to address some of these misconceptions so a popular one is nicaragua is half the price honduras is half price belize is half the price peru ecuador half the price why would anyone buy in costa rica well costa rica is one of the most popular markets the real fundamentals before you even look at your first property is to look at the country and the government and the rule of law one really good thing about costa rica it is a stable democracy they respect the voting process there hasn't been a coup here for in forever there's a robust property registry so if you buy something you really do own it and president's brother isn't going to come along and make a claim to it and take it the police force are present and in general crime is very low and violent crime is almost non-existent very very rarely you hear cases so that's how i address the the argument about other countries being cheaper yes absolutely there are but i can't remember the last time someone was considering costa rica versus nicaragua and choosing to buy in nicaragua because it's just not at that point yet where it's considered a safe investment so i'd say about half my time is spent advising sellers and about half my time is spent advising buyers so really i'm in a very fortunate position in order to see how people arrive at selling prices and then buyers when they're looking what what kind of decisions are they taking as they're going through the buying process the assertion about costa rica real estate being overpriced in a way it's caused by promoters that are over aggressively promoting costa rica they're often blurring the lines between the cost of a property inland or on a beach that's maybe difficult to get to or doesn't have any amenities and then they're describing the lifestyle in one of the popular beach towns that has paved roads good services good police force etc and so sometimes there's a misconception when people start looking between what their expectation is and what the reality here is sometimes they come to the inclusion world it's just overpriced here i would say about 80 percent of our buyers are buying a second home and so they're not planning to live here initially full time they're not selling their first home and moving here they're using as a holiday home for eight weeks a year ten weeks a year and then over time they're spending more more time down here so often the sellers they have a very different thought process to the sellers of a residential market normally they're not under a lot of time pressure to sell costa rica is essentially a cash market so they're not under pressure because they've got interest payments that they need to make each month and the seller is often selecting a price based on what he paid for it plus a percentage or what he needs for the next step in his life so if he's identified another property then he needs to achieve this price in order to buy the property that he wants so they're often making decisions not based on market conditions but really on their on their personal circumstances realtors don't choose a selling price the seller chooses the selling price i know this sounds really obvious but it's a common misconception uh you know if we're going through a listing process we will offer up our opinion on the selling price but at the end of the day the seller makes his decision in our office our policy is that we don't take over price listings so if the seller's expectation is different to what we consider is a fair selling price we won't take the listing now other realtors will because they're keen to get the listing and they will take it and put it up on their website at any price so you will see overpriced listings um on the market here so that there is absolutely no question about that and part of our job when we're representing buyers is to identify which ones are well priced and which ones aren't when deciding on selling price a key factor is the urgency of the sale i often get asked what i think a property is worth and we have a standard analysis that we do but the key factor is the urgency there there's a price to sell within a month there's a price if you want to sell in six months and there's a price if you find selling in two years from now you will see a wide variety of prices out there that are based on the seller's personal circumstances so then the fundamental question is how do you spot an overpriced property and that's not as easy in a second home market like costa rica as it is in a residential market firstly because architectural styles and build quality vary dramatically in a very small neighborhood whereas on a street or in a neighborhood in a first home market it tends to be the architectural styles are very similar build quality is very similar so traditional ways to evaluate it such as price per square foot is much much more difficult and the other factor that skews that equation of price per square foot is the concept of indoor outdoor living so here in costa rica you have your air conditioned space and then large glass doors that open onto an outdoor area which is as valuable as a living area as the air conditioned space but traditional measures of price per square foot value them differently and you may have a house that has a very large outdoor area which is actually much more comfortable space to be living in but because of you know valuing your air conditioned space at 100 percent and your your non-air conditioning spaces are 50 and it tends to skew the equation so you really need to dig a little bit deeper than just looking at price per square foot days on market is a good indicator to a certain extent in general in a second home market days on market is always longer than in a in a residential market but if you're looking at it should be one of the first questions you're asking how long has it been on the market and if it's been on the market for a short time then then you don't know but certain properties have been on the market two three four years um and that's the first thing you should be looking at and asking and really asking yourself why maybe they've got certain characteristics that are absolutely for you and they're the one but in general if they've been on the market for a long time it's because they're overpriced another factor to bear in mind is if the property has a really unique attribute for example there's a three-bedroom house it's a fairly modest house listed at a high price what it has is a stairway down to a private beach in costa rica there are no private beaches by law any beaches is open to the public but there are certain beaches that just because of the access or the topography means that really it's not a beach that the public goes to and this is one of those secret beaches and this house has a stairway right down and so the price is is significantly higher than a comparable three bed house somewhere else uh but it i in my view it's worth it it's gonna sell eventually because the buyers gonna come along think okay that's exactly what we want so again it's it's a property you might look at initially okay that's overpriced but really there are certain factors in it that that means that you know there is going to be a buyer for that property our buyers here as i mentioned probably 80 percent are second home buyers tends to be a cash market here that's occasionally you find a seller willing to give owner financing so generally buyers here they're financially astute they've got to where they are today because they've made smart financial decisions and they like money and they don't give it away unless it's for a good reason so the people buying costa rica tend to be smart and tend to have done their research take their time and find the right property that said there's a lot of emotion going into the purchase here if you're buying a second home you're buying where you want to be because you want it you're not buying in this neighborhood because it's close to your in-laws or it's close to your work or it's close to the good school you're buying here because you want it and because you like it and it's fulfilling a dream buyers budgets are much more flexible i've had people come to me and they you know they state their budget and we'll find a property for them at that price point often during the showing process when we look into properties and they realize they can't get the lifestyle they want for the price that they've given very often they can move things around sell a few stocks change change around some of their other investments and then suddenly they can double their budget or have you know whatever whatever they were missing in order to get the property that they wanted um in on the beach or in the location that they wanted so coming back to the topic of today's video is is costa rica real estate overpriced i would say it's a market price by definition a property sells when you have a willing buyer and a willing seller and there is good information in the market if you check out our website which is posted below we've got about 2 000 properties right now all over the country people coming in and buying their they're generally studying the market and they're taking their time and they're making good decisions so properties that are selling are at market price by definition and properties that are stuck there for a long time are overpriced so i would say the answer is that there are properties listed that are overpriced unquestionably the market right now i don't see it as being overpriced in the sense that there are still willing buyers coming into the market and in fact we're selling more now than we have done in many many years the final point i want to discuss today is the current market prices where i think the market is today it's unquestionably a seller's market right now our inventory has depleted rapidly over the last few months we've had a lot of sales uh since in the last six months or so we've seen a dramatic increase in the activity in the market here there's less inventory on the market prices are going up steadily i don't think they've they've shot up but but steadily we're seeing price increases more importantly we've seen that sellers are less willing to negotiate on the prices i'd say six months ago you were seeing a lot more price flexibility back and forth between buyer and a seller and then we're seeing today sellers know that if if this buyer doesn't buy then there'll be another one along shortly and that's a fundamental change over the last few months there are still some good deals coming on the market buyers are having to move very quickly and we've seen several cases recently properties are coming on the market and within days they've gone under contract so there are deals available for buyers that are able to move quickly i hope today's video has been useful please take a look below in the in the text there's a link to our website and i've got my email address down there if you have any questions you want to get hold of me yeah please take a look at the other videos in the series objective here is to help you to make a good decision about whether costa rica is right for you and if it is let's find you the right property at the very best price we can thank you [Music] me

Channel: Tamarindo Rich

Views: 26,904

Keywords: 10-19-19

Id: MaWtxlOzPJU

Length: 13min 26sec (806 seconds)

Published: Fri Mar 05 2021