In many ways, the system for buying and selling real estate in Costa Rica is similar to that back home in the United States or Canada.
However, there are some vital differences that can determine the success or failure of your real estate experience here in paradise. One of the most commonly asked questions and points of confusion our clients have is whether a seller should sign an exclusive listing agreement when selling their home in Atenas.
An exclusive listing agreement is a contract between the seller of a property and a real estate brokerage or sales professional. This contract gives the brokerage or sales professional the exclusive right to market the seller’s property to the public.
It includes terms and clauses such as the beginning and ending date of the exclusive contract, the listing price, the commission percentage to be paid to the agent(s) by the seller, as well as permission for the agent to work with competing agencies and agents. Furthermore, it allows agents to use marketing tools such as signs, flyers, the Multiple Listings Service (MLS), a lockbox, as well as hosting open houses.
In the United States and Canada, an exclusive listing agreement is the only way to go because that’s the industry standard in those countries. However, in Costa Rica that’s not the case. Below, I’ve outlined five reasons that I feel you should NOT sign an exclusive listing agreement when listing your property for sale in our area of Costa Rica.
No matter what you have heard, read or seen on the internet, the Multiple Listings Service in Costa Rica isn’t like the MLS used in the United States or Canada.
The beauty of the North American Multiple Listings Service is that agents from all over the country have access to your listing. Without a widely used MLS, only a fraction of the available properties are listed on the Costa Rican Multiple Listings Service, limiting the exposure of quality listings for buyers to see.
This may change in the future, but for now, it’s best to maximize your properties exposure with an open listing allowing several agents to represent your property.
When you sign an exclusive listing agreement you are limiting the participation of other agents in your area. Why? It all comes down to money. In the scenario of an exclusive listing agreement, the agents (buyers and sellers agents) will have to split the commission 50/50.
The reality is that 95% of all listings in Costa Rica are considered OPEN LISTINGS, meaning any and all agents have access to market those properties, with the owners’ approval, of course. The agent who sells the property will earn 100% of the commission. If an agent has 10 similar properties that they can offer to a potential client, earning 100% of the commission, why would they show an exclusively listed property by another agent and earn only 50% of the commission?
The caveat to this is that many of the northern and southern Pacific costal areas of Costa Rica have adopted a more North American system where exclusive listings have become commonplace, which makes signing an exclusive agreement acceptable.
The biggest downfall of listing your property exclusively in a system where open listings are commonplace is that you limit the exposure of your property to potential buyers. Listing exposure is vital, especially in Costa Rica where the majority of potential clients are using internet searches to locate their future home before they arrive to the country.
As a seller, you want the maximum amount of exposure possible. We suggest that you interview several agents in your area and list your property with the top three or four agents to maximize your property’s exposure. The goal is to sell your property, fast!
Unfortunately, real estate licensing does not exist in Costa Rica, meaning that anyone can open an office, put out a shingle and be a real estate sales representative. When interviewing a potential agent, here are some key questions to ponder and ask the agent:
1. How many years’ experience do they have selling real estate?
2. How many years do they have selling real estate in Costa Rica?
3. Do they have any kind of sales experience?
4. Do they have a real estate license in any other country?
5. Have they taken a real estate sales or ethics course?
6. Are they familiar with local laws, rules and regulations?
7. Do they speak Spanish, a skill which is imperative when navigating a business in Costa Rica?
Finally, go with your gut feeling about the agent(s) during the interview. A highly driven and motivated individual can make all the difference in a successful sales experience.
Gerardo and I will be the first to point out to any seller why they SHOULD list their property with a real estate sales professional instead of trying to sell it on their own. However, a seller should have the right to try selling their own property.
If you sign an exclusive listing agreement, you cannot sell your house on your own without paying the agent their commission. The beauty of having an open listing is that you can also market your property and avoid paying a commission if you find the buyer yourself.
Armed with a little knowledge and a few tools under your belt, navigating a home sale in Costa Rica should be effortless. Taking the time to do your due diligence up front could save you a lot of time, money, and ultimately a sale at the end of the day.
Since 2007, Gerardo and I have selectively curated only the BEST properties that Atenas has to offer. That’s our job. Your job is to sit back, relax and start living the “pura vida” in Atenas, Costa Rica!
Explore our luxury property listings to find your dream home in the world’s best climate and start living the lifestyle you’ve worked so hard to achieve.
Real Estate Broker
+506-8854-7721
Dennis@pldatenasrealty.com
The leading full-service brokerage specializing in luxury residential real estate in Atenas, Costa Rica.
Our team provides personalized guidance and support through every step of the home buying journey.
