COMPARABLE MARKET ANALYSIS OF MILLION DOLLAR HOMES IN COSTA RICA
SELLING OF MILLION DOLLAR HOMES IN COSTA RICA AND THE ISSUE OF THE COMPARABLE MARKET ANALYSIS
By Yalile Alpizar, President - Costa Rica Luxury Estates
I wanted to share with you some input about what it is to purchase a luxury home in Costa Rica. Many of you have asked about the data bases of comparable market analysis for properties sold in Costa Rica over the last two years. I am very sorry to tell you that there is no such thing as a data base of comparable market analysis of properties in Costa Rica! Properties that are listed for sale, presently pending of sale and properties that have sold with/in the last year are only a part of each real estate office’s private data base. Costa Rica does not have an organized real estate system that would allow for realtors to update this type of information in order to make it available to buyers and sellers. Finding out comparables can result in a titanic task to any realtor or buyer who wants to have a better definition of what is in the market within the price ranges of a specific property search.
In Costa Rica, pricing a property for a correct market value, or making an offer based on a comparable market analysis is only possible if you count on the services of a very experienced and reliable professional or firm with expertise in the area of interest and wide knowledge of the market in question. Coming from a different country with no knowledge of the local market conditions can turn the acquisition of a property in a challenge if you are not in the hands of reliable professionals with expertise in the local market.
In most countries, a comparative market analysis and an appraisal are the standard methods for determining a home's value. In Costa Rica, for a real estate agent to provide a comparative market analysis or an informal estimate of value based on comparable sales in the neighborhood of your interest, he would have to go door by door searching for the information, or call office by office to get information form the different real estate companies about their sales results. The bad news in Costa Rica are that neighbors would normally not be willing to provide that kind of information since it is considered private and most agents will not give you reliable information based in the fact that the more information you share the more chances you have of loosing prospect clients.
In sum, Costa Rica does not have public records of sales and the task of searching for properties that are similar to the one of a buyer’s interest in size, construction and location is tremendously laborious and would have to be done on a one to one basis.
Not too long ago, selling a million dollar home was a challenge in Costa Rica… most realtors used to call million dollar home the “white elephants” because they knew it would take many years before a buyer would purchase such property. Things have changed for the local upper tier market! The fact now is that we receive inquiries for information about million dollars homes on a daily basis!! And they get sold! Listings in the areas of Papagayo, the Central Pacific Coast, Escazu and Santa Ana, have to be updated more frequently with property owners due to the fact that they are changing hands more rapidly than before. A listing of a million dollar home usually takes over three years to sell, but it takes from six months to one year to get it sold if price and location are right. Some other properties would take longer due mainly due to location in remote areas of the country or because of overprizing conditions. Demand for luxury homes and million dollar homes has increased dramatically over the last year and it is forecasted that it will increase year after year due to the interest for second home ownership by high end buyers, especially from the United States, Canada and Europe.
Marketing of million dollar homes in Costa Rica has become attractive to real estate companies who receive multiple inquiries for information about that kind of properties as the luxury home market is booming. High-end homes generally require more time and marketing efforts to attract the right buyer, especially when you have to first sell the country and then sell the property! But high end buyers searching for luxury homes in Costa Rica are paying the price of owning property here because they know they are investing in an emerging market with all the conditions to turn into a second Hawaii destination. Costa Rica is right now the number one destination for adventure tourism and has become the favorite new destination for second home ownership. Interesting enough, most homes sold to foreigners are sold to people who first came to Costa Rica as a tourist!
By Yalile Alpizar, President - Costa Rica Luxury Estates
I wanted to share with you some input about what it is to purchase a luxury home in Costa Rica. Many of you have asked about the data bases of comparable market analysis for properties sold in Costa Rica over the last two years. I am very sorry to tell you that there is no such thing as a data base of comparable market analysis of properties in Costa Rica! Properties that are listed for sale, presently pending of sale and properties that have sold with/in the last year are only a part of each real estate office’s private data base. Costa Rica does not have an organized real estate system that would allow for realtors to update this type of information in order to make it available to buyers and sellers. Finding out comparables can result in a titanic task to any realtor or buyer who wants to have a better definition of what is in the market within the price ranges of a specific property search.
In Costa Rica, pricing a property for a correct market value, or making an offer based on a comparable market analysis is only possible if you count on the services of a very experienced and reliable professional or firm with expertise in the area of interest and wide knowledge of the market in question. Coming from a different country with no knowledge of the local market conditions can turn the acquisition of a property in a challenge if you are not in the hands of reliable professionals with expertise in the local market.
In most countries, a comparative market analysis and an appraisal are the standard methods for determining a home's value. In Costa Rica, for a real estate agent to provide a comparative market analysis or an informal estimate of value based on comparable sales in the neighborhood of your interest, he would have to go door by door searching for the information, or call office by office to get information form the different real estate companies about their sales results. The bad news in Costa Rica are that neighbors would normally not be willing to provide that kind of information since it is considered private and most agents will not give you reliable information based in the fact that the more information you share the more chances you have of loosing prospect clients.
In sum, Costa Rica does not have public records of sales and the task of searching for properties that are similar to the one of a buyer’s interest in size, construction and location is tremendously laborious and would have to be done on a one to one basis.
Not too long ago, selling a million dollar home was a challenge in Costa Rica… most realtors used to call million dollar home the “white elephants” because they knew it would take many years before a buyer would purchase such property. Things have changed for the local upper tier market! The fact now is that we receive inquiries for information about million dollars homes on a daily basis!! And they get sold! Listings in the areas of Papagayo, the Central Pacific Coast, Escazu and Santa Ana, have to be updated more frequently with property owners due to the fact that they are changing hands more rapidly than before. A listing of a million dollar home usually takes over three years to sell, but it takes from six months to one year to get it sold if price and location are right. Some other properties would take longer due mainly due to location in remote areas of the country or because of overprizing conditions. Demand for luxury homes and million dollar homes has increased dramatically over the last year and it is forecasted that it will increase year after year due to the interest for second home ownership by high end buyers, especially from the United States, Canada and Europe.
Marketing of million dollar homes in Costa Rica has become attractive to real estate companies who receive multiple inquiries for information about that kind of properties as the luxury home market is booming. High-end homes generally require more time and marketing efforts to attract the right buyer, especially when you have to first sell the country and then sell the property! But high end buyers searching for luxury homes in Costa Rica are paying the price of owning property here because they know they are investing in an emerging market with all the conditions to turn into a second Hawaii destination. Costa Rica is right now the number one destination for adventure tourism and has become the favorite new destination for second home ownership. Interesting enough, most homes sold to foreigners are sold to people who first came to Costa Rica as a tourist!
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