How to evaluate and establish the value of property in Costa Rica?

In Costa Rica, where there is no centralized Multiple Listing Service (MLS) to record the value of property in Costa Rica, typically established using the following methods:

1. Working with Local Experts: Hiring a seasoned RE/MAX real estate agent is crucial. Since there are no licensing requirements or MLS, agents with extensive local market experience can provide insight into property values based on comparable sales they have facilitated or know about through their network.
   • Why This Matters: Local real estate agents understand regional nuances and have access to informal networks that track property sales. Steps to Take:
   • Identify reputable real estate agents specializing in the area where the property is located.
   • Ask for a Comparative Market Analysis (CMA). Real estate agents conduct CMAs by comparing similar properties in the area that have been sold or are currently listed. Since there’s no centralized sales price database, these comparisons rely heavily on agent experience and local knowledge​.
   • Request insights into buyer preferences, rental market demand, and any upcoming infrastructure projects that could affect value.
2. Relying on the National Registry: The Costa Rican National Registry maintains public records of property ownership, including survey maps, measurements, boundaries, liens, and mortgages. While it doesn’t list recent sales prices, it provides critical information for due diligence and assessing property documentation.
   • Why This Matters: It guarantees property ownership and legal history, a foundation for fair valuation. Steps to Take:
     • Obtain the property’s folio real number (unique ID in the registry).
     • Access records to confirm legal ownership, liens, boundaries, and any other encumbrances.
     • Work with a local attorney or notary public to validate these details and assess their impact on property value.
3. Professional Appraisals: Engaging a certified property appraiser is another method. Appraisers use standardized valuation methods, including evaluating property conditions, location desirability, and potential rental income.
   • Why This Matters: Independent appraisers provide an unbiased value based on standardized criteria. Steps to Take:
     • Hire a certified appraiser, ideally someone registered with the Costa Rican Colegio de Ingenieros y Arquitectos (CIV).
     • Ensure the appraisal considers the property’s location, infrastructure, current condition, and market trends.
     • Use the appraiser’s report to negotiate or validate the seller’s asking price.
4. Network and Word of Mouth: RE/MAX real estate professionals gather information through informal networks. Local agents and attorneys often exchange insights about recent property transactions.
   • Why This Matters: Without an MLS, informal information sharing is key. Steps to Take:
     • Ask your RE/MAX real estate agent to gather insider knowledge.
     • Engage with property attorneys and escrow agents who often have insights into recent transactions.
     • Follow local market blogs or social media groups dedicated to real estate in Costa Rica.
5. Community and Market Trends: Understanding community-specific trends, such as new developments, infrastructure improvements, or popular neighborhoods, can influence property value. Local knowledge and real estate newsletters or blogs can provide this information.
   • Why This Matters: The value of property is tied to its location, amenities, and future potential. Steps to Take:
     • Research emerging neighborhoods or those with new infrastructure projects like roads, schools, or hospitals.
     • Identify if the property is in a popular tourism area, as this can influence both resale and rental value.
     • Study historical trends in property value within the region to understand price stability.
6. Escrow Services and Legal Framework: Using escrow services ensures secure financial transactions. Legal professionals performing due diligence verify property rights and ensure the property is free from encumbrances, which indirectly influences perceived value.
   • Escrow Services: Use services like Secure Title Costa Rica for secure financial transactions and added assurance during property valuation.
   • Real Estate Networks: Collaborate with agencies like RE/MAX Costa Rica, known for deep local market insights​​.
   • Blogs and Guides: Refer to detailed buyer guides or investment blogs for tailored insights. Ask your agent

Would you like a valuation for your property in Costa Rica, or help identifying a trustworthy agent or appraiser? Let us know by filling in the form below.