Expo Construccion y Vivienda 2011
This tradeshow starts today, the 16th of March until the 20th of March 2011. The Expo advertises 200 companies will have stands, of which 10 are banks or lending institutions, 37 real estate developers and 100 different housing projects.
In the La Nación supplement today, I checked the companies that will have space in the tradeshow. I can find find only 32 real estate developers (I might have missed one here and there) but 6 that have no website or have one that is unfinished. Nowadays, in the era of the internet, that is unthinkable.
Many of the others, on their websites, show only renderings of their projects but no pictures or no proof of projects they have done in the past. I bet many haven't built anything before. I have seen one too many unfinished project in my real estate carreer. I invested based on promises, in an apartment in Sonesta One Jaco, read here about my personal experience.
I have also sold some of my clients in pre-construction with no more than a hole in the ground, in the case of the Grupo Condado and Grupo Roble, and they have always delivered as promised. I am an experienced real estate agent and I thought I was doing the right thing when buying that condominium in Jaco Beach and I ended up with no apartment and only a useless title. Most of you don't have any or very little experience in buying real estate, so that makes it even harder. But I hear similar storied from the United States and other countries, so this is nothing new. There is good and bad, and that's what I want to warn you about and this is why I am writing this blog.
Those who will visit the Expo, and eventually think of purchasing a property, should do their due dillence on who the developer is, what the developer can show that they have built in the past and many other questions you can ask.
Do they need your money upfront? Why would you just give anybody who says they can build you a house or an apartment your hard earned money? Because they can afford to advertise themselves on an expo? How many developers in the past have promised the same and never delivered? Or have delivered but delivered bad quality? Ask for the name of clients they have sold to and if they mind you give those people a call. Its not only about having delivered but also if they have made the necesary repairs that come up after delivery.
The Costarican Chamber of Construction (Cámara Costarricense de Construcción or CCC) gives out two certications, but as far as i can find the information on this, only Fomento Urbano S.A. as the one and only construction company has accomplished these certifications until today:
1. For construction of residencies certification INTEC 036-CP-2010
2. For construction of subdivisions certification INTEC 034-CP-2010
Fomento Urbano will have a stand at the tradeshow.
This certification is finally the start of some controls the developers need, with the help of the buyers of course. If you, as a buyer just take for granted what the developer tells you, it will never get any better. Also, former President Oscar Arias created a new decree in August 2009 and became effective as of October 2009 that requires real estate developers to register their projects with the Ministry of Economy, Industry & Commerce. I hope someone will soon find out about the existence of this decree and start telling the real estate developers in Costa Rica about it.
Some developers want you to pay them in 4 or 5 payments in stages, up to 30% of the purchase price and you pay then the 70% final (or finance it) at closing. Others want to to pay through the whole construction so they don't have to put up too much of their own money. There are many variations. Beware!!! It is too easy to get wrapped up in a project that is only that, a project.
Bank financing and mortgages will be offered by the local banks but mainly to residents.
On the tradeshow, there are also real good developers and even though they don't have the INTEC certification, I have worked well with them and they have always delivered and stood for the warrantees they promised. But how do you know anyone will?
If and when you buy ANY property, make sure you have a home inspection done before you fully pay the developer or seller.
If you have any interest in buying or selling real estate, for fun, investment or even if you are a real estate agent, you should go visit the expo. Why? because it gives you an idea of what is going on in the real estate market in Costa Rica. if you plan to remodel you house soon, you should go too as there are lots of suppliers of construction materials and finishes on the Expo too. You should definitely make an appointment with one of our realtors to discuss your investment and we'll show you how stable the Costa Rica economy is and how well you can invest your money in the Costa Rica real estate market. Costa Rica does not have Capital Gains Tax and charges very little taxes overall to investors. Check out our testimionials to see how well we have done for our past clients.
I will definitely go to the tradeshow tomorrow.
Ivo Henfling, your Escazu and Santa Ana real estate expert.
GoDutch Realty Costa Rica