Real Estate Agent Abuses

These are some of the transactions I have heard about from just one agent. Now, Costa Rica has a lot of real estate agents (remember that EVERYONE is an agent) but this one stands out tops in my category of examples of what to look out for. In addition to every single item on the “Common Issues” page, this agent has these famous stories.  You may also encounter these “scams” all over the country as agents are not required to have any formal real estate education, training, experience, morals, or ethics. It is the investor that looses regardless of the reason for the error.

Here are five specific disasters left in the wake of one particular agent. See also “Self Dealing Agents” for one more story.  His comments regarding each transaction are included at the end.

• Sign this power of attorney and we will take care of you. This is another example where trust was misplaced in the agent. In this case, the “Agent” showed the property to the client; I was there and heard the property description.  Due to travel deadlines, the client signed a Power of Attorney in favor of the agent.  The agent received a copy of the plano and told me that it was different from what was described to the client.  I suggested that the transaction be terminated but the agent saw things differently and decided to buy the property for the client anyway. A lower price was negotiated from the seller because the property was different than described but the client was not advised of this fact. The agent split the difference 50/50 with the person who found the property. At the agent’s request, the “Attorney” wrote the contract and hid the fact that there was a markup on the property.  Months later, when the client returned to Costa Rica and saw that his property was on the side of a cliff instead of where the “Agent” had indicated where the property was supposed to be located. The client confronted the agent he was told that the agent didn’t have the money to refund his purchase price.  You can see who lost in this transaction.
• Gee, Did I forget what I showed you? Here is what one client had to say about his experience.  The property that he showed me was not the property that was sold to me.  It turned out to be about 1/2 of the size as originally quoted and it was not located where the agent stated. This cost the client considerably more to put in the road and electricity due to the additional distance from the road. When confronted, the agent told the client that he did not remember what property he had showed him.
• “This is the perfect property for you!” I was eating lunch and overheard the conversation this agent had with his clients.  Two clients wanted to go in partners and buy a lot that could easily be divided into two equal parts, one for each partner.  The agent waited until they were returning to their home country (again using a time deadline to make a deal) and told them that he “just found the perfect property.” He showed them the property from the street and told them that he had walked the property and it was perfect for them. They trusted him and bought it.
  
  Several months later, the clients contacted me for a topo map so they could divide the property into two equal sections. The topographer came back with news that approximately 50% of the property was not accessible due to a huge cavern.  By huge I mean 30 meters deep and 15 meters wide with no way to get around it without using the neighbor’s property. Unfortunately, the cavern is located exactly where the owners had previously decided to divide the property.  Next, I had to tell the clients that they didn’t have water and had no real hope of getting water for the foreseeable future.  Lastly, their property has partial year springs and they are prohibited from building within 200 meters of any type of spring.  Their property is in the same area as mine Once again, the client came out on the short end of the deal and the agent received his commission.
   
• Read about the “Self Dealing Agent” here.
• The last disaster was what happened to us. You can read our story for more details. The agent said something like “I am really sorry about what happened with your property.”

The Agent has commented that he may have made some mistakes in the past but it is the clients responsibility to do their own due diligence. He even has stated publicly that he has no regrets for any transaction that he has been involved in.  Even this is no longer true as he once again is telling his potential investors that he as done all of the due diligence for them.

Just remember that 12 step programs don’t include paying for the damage that one leaves in their wake.