Your broker’s role in the process

Your broker plays generally the same role as a broker in any other country. That is, he or she will help you with the process of checking market values and finding a property that fits your specifications. Once you find the property and meet the owner, the broker will assist in the negotiations. Remember that though the broker earns a percent commission on the property you buy, the broker is supposed to be working for you. A broker with a history in the country and a good reputation will, in theory, have an interest in getting you the best price and maintaining that reputation. That said, there is certainly an incentive for the broker to try to nudge the price up, since the commission is a percentage of the sale price. It’s not at all uncommon for brokers to persist in showing you properties that push the upper limits of your price range. Therefore, don’t be afraid to push for good service. A good broker with good references and a good reputation to uphold will be able to give it to you readily. A typical broker’s commission is between 5% and 6%, though brokers have been known to ask for quite a bit more (up to 10 percent on raw land on the beach). This won’t be much of your concern, since broker fees are usually paid by the seller. Occasionally, however, a broker will try to charge you a per diem. Up front fees can be merited in some exceptional situations, depending on the work you want the broker to do. Driving customers out to remote fincas on windy dirt roads every week for several months, for example, is tough work. On the other hand, the vast majority of brokers do no such thing (lots of them will ask you to do the driving), and brokers who ask for up-front fees should be avoided. There can be some overlap between the tasks of your broker and your lawyer. Negotiations and the drafting of the sales agreement, for example, are things that can be done by a broker, but are often done by the lawyer. While that means you’re paying for it when your lawyer does these tasks, sometimes that’s exactly the point: There are fewer ambiguities about where your lawyer’s loyalty lies. * Excerpts from “Christopher Howard’s Guide to Real Estate in Costa Rica” and the 16th edition of Christopher Howard’s “The New Golden Door to Retirement and Living in Costa Rica”