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Property owners in Costa Rica are often not realistic about the listing price of their property; so I decided to publish the five most common listing price objections.
Listing a Costa Rican property for sale can be a lot more complicated than you think, no matter if you’re a motivated seller or not.
My article for the Tico Times in November 2015, “8 reasons why your property in Costa Rica has not sold in 7 years,” keeps generating a lot of emails and calls from sellers. They have been trying to sell their property for years and think I have the magic solution.
To be able to come to a realistic listing price for the property, there is a variety of factors to take into account. First, you need all the necessary information on those factors to make an educated decision. Unfortunately, we don’t have CMA’s, because it’s impossible to find out what other properties in the neighborhood have sold for. That doesn’t make it easier either.
Many property sellers think we still live in the 2006 – 2008 real estate boom and expect to receive a much higher price than is realistic. They think their property is worth a lot of money. And therefore they overprice their property and it takes them years to sell.
Of course, we all want to make a profit on our real estate investment. But if you have purchased your property at the top of the market, you cannot expect to walk away with a profit if you’re in a buyer’s market.
And going up with your listing price after it hasn’t sold in 2 years won’t do it either.
The behavior of a real estate market is more or less the same everywhere in the world. One of the essential rules in real estate is “buy low to sell high.” Investopedia explains it very well in this article if you’re interested in diving a bit deeper into this exciting topic.
Our agents are in an uphill battle all the time, trying to explain the facts, for lack of CMA’s, to a seller. There are five common listing price objections to a realistic property value:
1. I paid more for the property when I bought it!
Timing is everything when investing in real estate. Einstein was right when he said that “In the middle of difficulty lies opportunity.”
If you buy real estate in the middle of a real estate boom, your timing to sell at a higher price in a buyer’s market might not be the right one, unfortunately. I suggest you also have a good look at how long you have lived and enjoyed the property. That should have some value to you too.
So either price to sell, or wait until the market gets better.
2. I won’t give it away!
There is no need to give it away. But, your property is only worth what a buyer is willing to pay for it. The price usually depends on the real estate market conditions or the property conditions. If you are eager to take an expert’s advice, ask your agent for guidance on finding a realistic listing price without having to give it away.
3. We can always drop the price later
If you are a motivated seller, price it right from the beginning. After a while, a listing turns stale. Pricing the property at the right price will save you many headaches and frustrations.
If you’re not motivated to sell, why put it on the market.
4. My neighbor sold for a million dollars
Because the neighbor sold his house for a million doesn’t necessarily mean that you will find another buyer just like it. Is the neighboring property comparable to yours? Is it the same size? Does it have the same amenities, views, land size, construction size, and construction quality? Was it sold under the same real estate market conditions as it is now?
Listen to your real estate agent, then set the price together.
5. I need that amount to be able to purchase what I want
Many sellers think they know enough about Costa Rica real estate to take an educated decision on calculating the right listing price. Other sellers are convinced that their property has a particular value because they say so. In some cases, sellers insist on having an unrealistic listing price because the property they want to purchase next has that value.
Real Estate Agents
Indeed, some real estate agents in Costa Rica are not professionals. Some agents do not know how to price a property because they have not been trained on real estate values by their broker. And they don’t know anything about the market values. Nevertheless, a professional real estate agent usually knows better than the seller. That’s because the agents know what comparable properties have sold for in the area, which is the most important guideline.
In many cases, the seller and I are not in agreement about a realistic listing price. Then I ask them to contact other agents to come up with a listing price. Some agents prefer not to take the responsibility of putting the wrong listing price on the property, though.
Are you are a seller of a Costa Rican property, and do you find any of the above objections realistic? Then, you are not ready to sell your property.
Do not try to sell your property if you’re not happy with the suggested listing price. First, talk to your agent about your listing price objections or wait until the real estate market is near the top again.
Contact us when you need any advice from a serious real estate agent on selling your property at a realistic price.