“John, how do we know that this list price is accurate when there is no MLS data from which to see comparables and market information?”
Here we go…
Local knowledge is key. Whether you want to know the price per meter for land or square foot for homes, data is out there and a reputable brokerage will have that available. There is no MLS (Multiple Listing Service) in Costa Rica and it will be a long time before there is one, if ever. So, how do we establish values?
It starts with building costs and land valuation.
If the seller originally bought the land for $100k and built the home for $250K, then we start with $350k as a base. Next we look at such things as is the home a luxury or non-luxury home? Is it easy to access? How is the infrastructure and the surrounding neighborhoods? Is there a view and if so, of what? How many bedrooms? And then we can’t forget, the good ole real estate 101 rule of progression or regression.
Unfortunately, many buyers think that the replacement cost is the price they can or should pay for property. But wait a minute, there is a high probability that the seller bought the land without electric, water or even a road to their property. Remember, ten years ago much of this area was still jungle or pasture land so we must add the costs of having those basic amenities. Bringing in electricity, water, and roads takes time and money. We cannot forget those hidden costs that went into the building of this home.
A big factor these days relates to access and distance from the main highway. Better said, how much car maintenance will it cost going up and down a hill getting to this home. Is the property on a paved road or is it a dirt road that is twenty minutes from the highway? There is a huge difference.
Another thing to consider is landscaping. Landscaping plays a significant role in increasing property values. It does not cost a lot to make a home look like an oasis but the amount of time for landscaping to mature and be maintained must be considered as it adds significant value to a neighborhood.
Because there are no large-scale homebuilders developing residential communities, no home is exactly the same. “Comps” just do not exist in the Costa Ballena.
With over twelve years experience in this community we have the data to help you establish values and to assist you and your real estate needs.
Give us a call, you will be glad you did.