Real Estate Games August 28, 2007
Posted by admin in : Real Estate , add a commentOne of the most common real estate games, played on both Costa Ricans and Americans, could end up costing you four times the amount you should have payed for property. The great thing about this real estate game, besides the incredible profits for the real estate agents and companies, is that it is so easy and you’ll never find out.
It’s just one of many games played on unsuspecting locals and foreigners, and one of the reasons to choose iCare Costa Rica Real Estate, it goes something like this:
You walk into a Costa Rica Real Estate office interested in purchasing property or land. You sit down at the desk, and after you tell the agent about where you are from, and him or her telling you how wonderful Costa Rica is, he’ll ask you, “So, Bob how much are you looking to spend on real estate?” And you say “Well Jim, I’d like to spend something under $200,000, if I can. Do you think that’s doable Bob?”
A hungry real estate agent will always agree, “Most definitely, we have some properties listed at around $200,000, I’d be happy to show them to you, and I can also ask around to see what else is out there.” You take a look at the properties that the agent has, and well, you may be a little disappointed, you were expecting more for your 200k. “Not a problem Bob. Let me ask around for you, enjoy your vacation, we’ll be in touch. Bye the way when do you leave Costa Rica?”
Here’s what happens next. The agent or his Costa Rican partner will either know of, or locate, a Costa Rican who wants to sell their property. The Costa Rican values his property at 50k, the Costa Rican partner approaches the landowner, and asks him how much does he want for his land. The landowner says 100k. The Costa Rican real estate partner knows the true value, and tells the landowner that he has an interested buyer, who is will to purchase the land in cash for 75k. The Costa Rican landowner thinks, “Wow, 25k more than it’s worth, enough to buy a nice car. Si, let’s do it.”
“Hi Bob, it’s Jim, I found a great deal on a piece of land, just what you were looking for, and the owner only wants 200k, right in your budget. Is it nice? Bob, I’ve been in this business for 10 years and I’ve only rarely seen a property like this at this price maybe once, 8 years ago.” Ahem. “It’s got ocean views, right off the main road, a cinch to get water and electric in there, you really should take a look.”
You take a look. And it is beautiful. You can see the ocean, hear the creek nearby, it’s peaceful, it may cost a little more to get water and electric, but the agent knows somebody that can get it done. You dream of spending days on the patio, smelling the fresh air, listening to the monkeys, and watching the sunset over the ocean. How can you say no. This doesn’t exist in the United States, and even if it did, it would cost millions. You buy it.
You have just payed four times as much as you should have for the property. Neither you nor the Costa Rican landowner are aware, because of the lawyer that’s in the middle of the process, that the Real Estate company has robbed you both. Instead of paying the real estate agency $6,000 (8% on 75k), you have just given them $125,000, not a bad commission.
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