Real Estate FAQ | Should I sign a listing agreement?
Should I sign a listing agreement is a real estate FAQ or a Frequently Asked Question in Costa Rica real estate.
Have you decided to put your property in Costa Rica 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 Costa Rican real estate offices and agents:
1. Non-exclusive 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 with. Before you start calling around, you should first get the details on your property.
Most sellers of a property in Costa Rica do not realize that they need to supply the agent the details of the property. 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 the property is owned by a corporation
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 what to do when price needs to be adjusted
6. Term of the agreement, 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 will hold up in court.
In my personal 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 any complaints.
Many real estate offices insist on listing a property only if the seller signs a listing agreement. It is important the seller first gets 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 between them. Usually, every realtor will now delete the listing from their websites as they now become a buyer’s agent.
This is a collection of Costa Rica real estate FAQ – frequently asked questions that I have put together to help you in buying or selling a home. Do you have any other questions that are not listed in our FAQ blog? Then feel free to leave them in the comment section below or send me a request. You can also subscribe to our FREE weekly newsletter, The Easy Times, below.