An often recurring real estate FAQ Frequently Asked Question in Costa Rica real estate is should I sign a listing agreement?
Have you decided to put your property on the market? Then you will want to know if you should sign a listing agreement with a real estate agent or company.
There are two types of listing agreements used by real estate offices and agents:
1. Non-exclusive listing agreement (or open listing agreement)
2. Exclusive listing agreement
I assume you have already done your due diligence on which real estate agents you want to list your property. Before you start calling around, you should first get the details on your property.
Most property sellers in Costa Rica do not realize they need to supply the agent with the property details. These details are needed to fill out the listing agreement correctly:
1. Seller’s personal name, cédula, DIMEX, or passport number.
2. Name of the corporation (Sociedad Anónima or S.R.L.) and corporate ID number if a corporation owns the property
3. Legal description of the property, folio real, and survey map number
4. Authorization to list the property exclusively or non-exclusively
5. Listing price and statement of what to do when price needs to be adjusted
6. Term of the agreement, the time frame of the listing agreement
7. Commission percentage and 13% sales tax on top of the commission acknowledgment
8. Obligations of the real estate agent and/or company
9. Earnest money deposit and what happens with the deposit when signing a buy-sell agreement
10. Where will the property be advertised
11. Obligations of the seller
12. Arbitration clause – needed to resolve any disputes
A private document
Not all sellers are willing to sign an agreement or want the listing agreement checked by their lawyer first. Signing such a listing agreement is a formality and a private document between parties, but it will hold up in court.
In my opinion, it is very difficult to pursue this agreement in Costa Rican courts after one of the parties has not fulfilled his/her side of the agreement. If an agent does a good job selling, the seller will pay the commission without complaints.
Many real estate offices insist on listing a property only if the seller signs a listing agreement. The seller must first get legal advice on an exclusive listing agreement. If the agreement is an open listing agreement and non-exclusive, this decision is much easier to take.
Once you sign an exclusive listing agreement, make sure you let every realtor on your contact list know that you have signed an exclusive agreement and with who.
Also, ask your exclusive agent to contact the other agents on your list, so they can delete your listing from their websites. Unless the exclusive agent and other agents can get to an acceptable agreement. Normally, every realtor will now delete the listing from their websites as they now become a buyer’s agent.
Do your buyer a favor, please do not forget to request a property listing removal with all the agents you listed with after the closing.
This is a collection of Costa Rica real estate FAQ – frequently asked questions I have put together to help you buy or sell a home. Do you have other questions not listed in our FAQ blog?