Hounded by Costa Rica mass marketers?
Buying Costa Rica Land From The Telephone Boiler Rooms by Scott Oliver
Sept 1, 2007
Thousands of people who have bought land from the dozen or so companies that send out millions of emails per week and then have someone in a boiler room in Florida or California beat you to death on the telephone to "close" the sale are now waking up to reality and realizing that their land is not at all easy to sell...
As far as we know, it's not illegal for a high-pressure salesperson in the USA - many of whom have never even set foot in Costa Rica - to sell you land in Costa Rica using this method, but it's just not a smart thing for you to do, especially buying land in a foreign country without seeing it first and doing your homework.
We've been writing about Americans selling land in Costa Rica by this high-pressure method for about five years now and even though there are about 20 different projects that we can think of with thousands and thousands of acres of land and, from what we are being told, during this time there have been less than 20 homes built in all of the projects combined.
One problem that people did not expect, having listened to their salesman tell them that they could buy the land, split it into two and sell off one lot to pay for their new home - Yeah right! Is that most people who have wanted to sell their land have been unable to do so.
Buying Costa Rica Land Is Easy - Selling May Not Be.
Why can't they sell? Because there is no open market for this kind of land...
Who are you going to sell it to? If you are really lucky, the company that sold it to you 'may' buy it back from you and resell it but why would they want to buy it from you to resell your land to one of their customers with a tiny mark up when they can sell their own land with a stratospheric mark up and huge commissions to that same person?
Nobody else in the open market wants it... It's an artificial closed market where the price action is determined by the marketing people.
The reason this land increases in price is NOT because of supply and demand, it's not because people are banging on their doors to buy it, contrary to what they may insinuate and what their email marketing campaigns show - this is not prime ocean view land - the only reason their land prices increase is because they increase them. Simple.
Buy Now Before The Price Goes Up!
You see it's always useful for a salesperson to have a 'sense of urgency' so if they have a regular price increase, it makes it appear that this land is in demand and, the salesperson can genuinely say that: 'You'd better get on board now because prices are going higher at the end of the week" before he pockets his double the industry standard 10% sales commission...
And please remember when the next Costa Rica land salesman calls that the #1 focus for these companies is to sell you land for a much higher price than they paid for it so that they can make money.... They don't give a damn whether you can build your dream home on that land or not.
Some of them claim that they will help you build your homes but since we have seen less than 20 built in the last five years, this promise does not sound promising.
From a recent WeLoveCostaRica.com Discussion Forum thread:
"When he first went there, some dude called Flores said they would build his home for $90 per square foot and that construction price would be rock solid for two years when he planned to build his home which was one of the main reason he bought a land there. Then only five months later (not two years) they tell him the construction costs would not be $90 per square foot but $130 and he is real mad because for his house plan which is just about 2,500 square feet that's and extra US$100 grand he has to find and they lied about the roads which they said would be brick pavers but are now going to be asphalt and he don't believe them much about anything anymore."
Are these boiler room salespeople lying to you too? Martin Gill
mentioned that; "... we do get guys asking us to re-sell their lots..." and..."The big problem is
that these developers sell this as an investment and people think that they can flip their lots and make money, but they forget that there are 2,000 lots just like the one that they have." And "unless you have an awesome ocean view the homes will be hard to sell."
If They Don't Build It For You, Who Will?
And if they don't build your home for you, who will? Because if you are thinking of building a single family home anywhere in Costa Rica from a distance, may we politely suggest that you rethink that idea...
We get emails every week from people saying they bought lots in one of the 'Sold-Me-Hard Projects' and could we recommend a Realtor to help them sell their land. Unfortunately, my response always goes something along the lines of: "Sorry we have already asked our recommended Realtors to see if any of them would be interesting in helping you out but there is not one single Realtor that I know of in Costa Rica who is remotely interested in selling your 'Sold-Me-Hard Projects' lot and would be surprised if you find one..."
These land promoters make it difficult for their potential buyers to visit the land they are trying to sell them - unless they have already paid a big deposit BEFORE they have seen it (??) - so how difficult do you think it is for an outside Realtor to gain access?
Depending on the overall market conditions, land can be a very illiquid investment, meaning it can be difficult to sell in a timely fashion but when your Realtor can't even visit it, it's impossible to sell.
If you are planning on buying land in Costa Rica and wish to invest your money where it has the highest probability to make you money with the lowest possible risk, I would suggest that the next time you hear from one of these boiler rooms, you tell them that you are not interested and hang-up.
Instead, find yourself an experienced, trained Costa Rica real estate sales professional, like CR Beach agents, that will sell you the land you want, often with the developer living on the development and, when the times comes, he or she will also be happy and proud to help sell your land for you...
Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica's Guide To Making Money Offshore. © 2007-2008 WeLoveCostaRica.com All Rights Reserved. Reproduction without permission prohibited.