Let’s face it, it’s rewarding when your smart real estate investment pays off and you sell a property for a profit. You are happy, your buyer is happy and everyone walks away a winner. If you are a seasoned real estate investor you also know that there are all types of obstacles that can turn a potential sale into a lost opportunity…or even worse, lost profits. For those of you new to real estate buying and selling in Nosara, Costa Rica read on….the advice that follows has helped many owners sell their properties at the right time, for the right price.
ARE YOU AN ABSENTEE OWNER? One of the biggest challenges for property owners in Costa Rica is not living full time in the town where their property is being sold. This is particularly true in and around Nosara where there are hundreds of “absentee owners” with lots, homes and farms for sale. This is why it is so important to spend time with your real estate agent at your property whenever you are in town. When you are not in Nosara do your best to stay informed by signing up for the Century21 Nosara email news and stay in touch with your preferred agent for market updates and the current status of your property.
KNOW THE NOSARA REAL ESTATE MARKET : Obviously markets ebb and flow and there is little anyone can do about it other than ride the wave (as corny as they are, surfing puns are always appreciated in Nosara). A good example of market fluctuation and its effect on Nosara was during the slower years from 2007-2010. During this time some sellers were caught chasing the market as it was dropping. This group of owners found themselves with properties that were priced to high initially, and by the time they lowered their listing price to align with the market it was too late. In essence, they were chasing the market in the wrong direction. Had they listed at the correct and realistic price in the beginning, they would have made more money instead of needing to adjust to the changing market. (e.g., by the time they accepted the fact that $1.2million wasn’t going to happen they dropped it to a $1million, where it should have been listed in the first place… but now… the market value was down around $850,000. In a seller’s market mistakes are often less painful. I’ll talk more about that in ‘Listing Price’ below.
LISTING PRICE: A high listing price may be the single most prohibitive barrier when it comes to a property not selling. Unfortunately, unrealistic listing prices often come from an overzealous realtor as a way of getting the listing (who wouldn’t want to hear that their property is worth more than anticipated); however, the damage that is done by overpricing your property can be very difficult to correct.
First, when a property is overpriced, some realtors will use it to sell other properties. “Look Mr. Smith… this “absentee owner” is trying to sell his lot for $85,000 and the lot next door is equal in size and only $60,000”. Other sellers think “I’ll just tack on an extra $100,000 and be willing to negotiate”. Wrong! That strategy may have worked in Nosara 10+ years ago, but thanks to social media and the overall popularity of Nosara, buyers are now much moresavvy. The better strategy is to price your property intelligently and negotiate aspects of the deal like payment terms, closing date, closing costs and finally the sales price. By the time someone has made an offer on your property, they have already made an emotional connection and the chances of a successful sale are much better than starting with a listing price that throws up a red flag. To make things worse if your property is way overpriced many would-be buyers won’t even contact you with questions or comments. Of course, you don’t want to list too low either, so it is important to become educated about comparable properties that you’ll be up against. If you want to maximize profit, patience is required. If you need to liquidate quickly, list your property under the market median and you should sell quickly. A property that is overpriced can be difficult to correct for a few reasons.
1. Potential buyers will see your listing advertised for too long. This is a red flag.
2. Potential buyers may be concerned that there is something wrong with the property or simply want to put in very low offers because the seller appears desperate.
LOCATION, LOCATION, LOCATION: We’ve all heard the about the three most important things about real estate. Obviously location is not something you can change when it is time to sell so make sure that you buy in an area that will be desirable to future prospects. In most instances, if you wanted a piece of property enough to buy it someone else will also see the potential.
FIRST IMPRESSIONS MAKE OR BREAK SALES: When it is time to sell most owners will tidy up their property for photographs and organize the house for showings but this may not be enough to impress a buyer. What I’ve heard too many times is that “the photos look great, but the house doesn’t show well”. That usually happens when sellers don’t continue to keep their property presentable or perhaps wear and tear from renters has taken its toll. If you want to sell, maintain your house, yard or lot looking its best year-round. If you have renters, make sure that they are willing to do their share to have the house looking great whenever the house will be shown. If the house needs new paint, gutters, doors, landscaping, etc., get it done before you start showing the property. Green pools are only cool one day a year (March 17), the other 364 days buyers want to see clear blue water! If you are selling a lot, make sure it is maintained, especially during the rainy season when properties become overgrown quickly. Most buyers are in town for only a few days, so if a potential client cannot get on your lot because the weeds are overhead, they’re likely going to pass. Carpe diem.
Upgrades: This topic has come up several times recently. Some sellers can’t decide whether to add certain upgrades or new amenities that will make their house more appealing during showings. For example, improvements like pools, car ports, ranchos, guest rooms, etc. I personally believe that it makes more sense to avoid upgrades and additions for selling. This not only increases the listing price but it takes away the opportunity for the new owners to have some fun making changes to their preference.
After sixteen years of buying and selling real estate in Nosara I’d like to think I’ve seen nearly every type of successful and unsuccessful real estate sales strategy possible. Hopefully I’ve narrowed my experiences down enough for you to make some smart decisions about selling your property, however, if I missed something in this post please email me at Bram@century21nosara.com.
