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If you are looking for real estate comps in Costa Rica or comparable sales data, you’re in for a wild ride. That’s because we don’t have any real estate comps here.
Are you a buyer or seller looking for comps? In this article, I’ll explain why we don’t have any and what to do about it.
Some of you may not be familiar with what comparable sales data is used for, so let me explain that first. When buying or selling property in Costa Rica, determining the correct property value is a crucial step in the process. One of the most effective tools for this in most countries is the use of comparable sales data, commonly referred to as “comps.” These are recently sold properties that are similar in size, location, condition, and features to the property in question.
What Are Comps?
Real estate comps in Costa Rica, or comparable sales data, are properties that have sold recently and are similar to the subject property in key attributes:
- Location (same neighborhood or development)
- Lot and construction size
- Number of bedrooms and bathrooms
- Condition and age of the structure
- Amenities (e.g., swimming pool, ocean view, gated community)
By using this information, it’s easier to compare the property you are buying or selling to similar properties that have recently sold under comparable market conditions.
Challenges of Finding Comps
In Costa Rica, accessing accurate and up-to-date comps is not as straightforward as in countries with centralized multiple listing services (MLS). Here are a few reasons why:
Lack of an Official MLS
Costa Rica does not have a national MLS. Real estate data is fragmented across various private websites, agencies, and broker networks, making comprehensive comparisons difficult. There are two real estate boards, but many agents lack the training to see the importance of publishing all the necessary (and correct) data on their listings. Websites also don’t list the time on the market. Besides, most real estate agents do not belong to a real estate board because licensing is not mandatory in our country.
No Mandatory Disclosure of Sales Prices
In Costa Rica, the sales price is a public record, but if you don’t know who the owner is or what the property’s title number is. Often, when a corporation owns the property, the shares are transferred, and the price paid doesn’t show in the National Register. Additionally, in the past, the true value was not declared to avoid transfer taxes. Now, anti-money laundering laws have stopped this practice.
Inconsistent Valuation Methods
Appraisers use the Heidecke formula, which is the standard appraisal system that utilizes prices for comparable properties listed online. Experienced real estate agents use land values that they know neighboring properties were sold for, as well as the replacement value for buildings.
Diverse Property Types and Conditions
Costa Rica has a wide range of property types, from luxury homes in gated communities to rustic rural farms, with a variety of amenities and restrictions, which makes apples-to-apples comparisons almost impossible.
When you take, for example, a farm for development, you might find 6 farms in the same area. These are a few differences you might find between all six properties:
- All farms are different sizes.
- Some have more road frontage and others have hardly any.
- Only 2 have proof of water availability, but is it enough for the number of houses a buyer wants to build?
- Is there a zoning plan, and what is the maximum number of units allowed?
- Some farms have incredible views, while others have no view or are plagued with ugly views of rooftops.
- How far away is the power, and what is the cost of bringing power to the units to be built?
- Are there water runoffs for rainwater (desfogue in Spanish)?
- How far away are main roads, grocery stores, a hospital or clinics, and other essential services?
How to Find and Use Comps in Costa Rica
Despite these challenges, it is still possible to gather practical comps with the right approach:
Use Experienced Real Estate Agents
A well-connected, local real estate agent specializing in the area of interest can provide the most reliable sales data, based on firsthand knowledge and recent transactions.
Access Municipal Records
While not always complete or available, some municipalities maintain property registries that may offer insights into recent transfers.
Network with Other Buyers or Sellers
In tight-knit expat or local communities, word of mouth can be an invaluable source of information about what properties have sold for.
Check Online Platforms
Websites like Encuentra24 and Realtor.com provide asking prices, although these are not the same as the actual sold prices. Still, they can give a rough estimate of market trends.
Conclusion
As Costa Rica continues to attract international interest, the availability and quality of comps are likely to improve. But for now, it remains an essential, if somewhat nuanced, part of buying and selling property in the country. Hire an agent on our country-wide network; we all specialize in a small area, are very knowledgeable, and can supply you with real estate comps in Costa Rica. Contact us now.
