Here’s a saying that I love:

If you visit Nicaragua for a day you’ll never come back, but if you stay for a week you’ll never leave.  (source: unknown)

There’s certainly some truth in that. Nicaragua may be frustrating at times and the infrastructure can be patchy in more remote areas, but (as I mentioned in my previous post) it just feels like it’s got a bit more heart than its regional neighbors. The people are friendly and welcoming and fiercely proud of their country.

Visitors becoming locals

The fact that the country gets under your skin is something that Nicaragua real estate vendors know very well.  Slogans like; “We turn visitors into locals” play on that feeling. They know that real estate is primarily tourism driven, that people come to Nicaragua on vacation, that they tend to like what they see and then want to buy a corner of it for themselves.

It happens time and time again: Visitors become locals.

The other thing going for Nicaragua when it comes to real estate are the prices – probably the cheapest you’ll find in the region.  And the country is beautiful.

Nicaragua; plain beautiful

The southern most part of Nicaragua is where most investor interest is focused. The small fishing town of San Juan del Sur is where most tourists and investors base themselves to explore the area. The geography is dramatic – towering cliffs and rolling hills frame secluded beaches and sheltered coves. It’s very similar to the northern Guanacaste area of Costa Rica that has been a property hot-spot for decades (with prices to match).

Heading away from the ocean and into the cooler highlands you’ll find the charming areas of Matagalpa and Jinotega which many are now comparing to Panama’s Boquete region. If crisp air and rolling green vistas are what you are after, make sure you add this area to your itinerary. And one last thing you should not miss on a visit to Nicaragua is its colonial towns. Granada and Leon are the two most famous and have many examples of traditional Spanish architecture with its high adobe walls, terracotta roof tops and shady internal courtyard gardens. You’ll find the historic centers well preserved and very walkable.

There’s a lot to discover in Nicaragua. But take your time.  It’s only when you slow down that the country will start to get under your skin and you’ll find that you may never want to leave.  (The famous Nicaragua’s author Gioconda Belli said it first in her book; “Country Under My Skin.”)

• The country offers a a great deal of opportunity everywhere you look. According to overseas property sites RevealRealEstate.com and GlobalPropertyGuide.com real estate prices in Nicaragua are lower than in Costa Rica (its neighbor to the south), Panama and Belize.
• The country is teeming with tourism attractions from volcanoes you can ski down to historic colonial towns.  Tourists are wowed by the dramatic ocean scenery around the fishing village of San Juan del Sur, the huge volcanoes that you could ski down near Leon in the north of the country, and by Granada, the oldest continually inhabited colonial city in all of North and South America.
• For many retirees looking for an affordable place to retire, Nicaragua ticks all the right boxes. It’s possible to live a life of luxury for under US$1000 a month. And baby boomers who have come to realize that an oceanfront retirement property is out of reach back home, are happy to find that these kind of real estate options are well within reach in Nicaragua.
• But perhaps best of all, the country is one of the safest in Central America and the locals are friendly. The old tourism strap-line used to be “Nicaragua – with heart“  (In Spanish: Nicaragua – con corazon).  For many visitors this still intuitively feels right. Nicaragua has just got a bit more “heart’ that its neighbors. You’ll feel the warm and welcoming vibe as soon as you arrive.
• Nicaragua offers an enticing retirement residency program. The program was already pretty good before the 2009 update that made it even better. If you are of retirement age – and in Nicaragua that means just 45 years of age – then it’s worth checking out.

Tempted? Check out these 8 tips for buying property in the country.

1) In order to get a good handle on market value you’re going to have to see a lot of property.  Build a spreadsheet noting down the asking price of everything you see.  Yes it’s true that asking prices are just “starting prices” but in a world were reliable data is scarce, it’s the only a good place to start.  Unfortunately you just can’t get the kind of data considered standard in more mature markets.

2) The only way you will be confident that you are seeing all there is for sale in the Nicaragua real estate marketplace is to book property viewings with every agent who has an active presence in your target market.

3) Triangulate the information you receive from as many sources as you can.  There are few truly independent sources of information in the country, and no official property statistics, so cast your new widely.  Read the local newspapers (Spanish) and follow English Nicaragua news sources.  Try to keep abreast with tourism numbers and where infrastructure development is planned.

4) Only buy what you can actually see and touch.  Concentrate on real, tangible value only.  Ignore those glossy renderings of the new clubhouse or the golf course.  Assume that the road won’t ever be paved and that new airport the developer keeps mentioning will never be build.  Then ask yourself whether you still like the property and only close on the deal if the answer is “yes.”

5) Never use the sellers attorney for the closing process.  It is vital that you hire an independent attorney to represent your interests.  Remember that in Nicaragua the closing documents and title deeds will be in Spanish to unless you have a perfect grasp of legal Spanish, ensure your attorney is bi-lingual.

6) Some seller expect to receive a deposit to ‘reserve’ the property while you do your due diligence.  This is a bad idea. Escrow the deposit with your real estate agent, an escrow firm or with your lawyer.

7) Always take out title insurance on your property purchase.  The process of applying for a policy will ensure that your lawyer follows a rigorous due diligence procedure and digs deeply into the title history.

Keep your emotions in check.  Too many investors seem to catch a virulent strain of “land fever.”  This together with the common “sunshine syndrome” mean that emotions rule all decision making.  Big mistake.  Ensure you use your head as well as your heart and if possible let data and rigorous analysis drive your investment strategy rather than getting carried away with how the place makes you “feel.”

Samuel Chally former sales agent with Coldwell Banker Nicaragua real estate tells us about the last property he sold in Nicaragua. And he tells us why it sold.

1) Of course it’s vital to price the property competitively against similar options for sale.  In Nicaragua there are no official market statistics, so sellers should spend the time to research other offerings manually before deciding on a price.

2) Get a list of the top agents operating in your market.  Run a Google search and determine which firms have the highest ranking websites.   While in the country work out which firms have the best office presence and which are investing in for sale signs, magazine adverts and so on.

3) As real estate agents in Nicaragua act more like buyer agents than listing agent it makes sense to collect together photos of your property and write up a listing description yourself.  Take this round to the most active firms that you have identified and follow up with them to ensure that your property listed on their website.  As you have provided photos and a description, this should be a quick matter of copying and pasting.

4) Make sure the real estate agents you have listed with know how to get to the property.  Provide detailed maps, an access key, etc. – whatever it takes to make this process as simple as possible.

4) For reasons explained in our article on the implications of not having an MLS, you’ll probably be better off giving an open listing to all active agents rather than an exclusive listing agreement to one agent.  You’ll benefit from the marketing power of many agents rather than just the one.

5) As it is difficult for buyers to obtain financing from local financial institutions in Nicaragua, its a great idea to offer seller financing.

6) If you are selling property in a development, motivate the developer (and agents) to sell your property by offering a high commission percentage.  Remember also that you will be competing against developer-direct sales so you want to price yourself below these.

A feature of a non-MLS environment combined with the un-regulated nature of the market is that exclusive listings are rare.  It’s hard for an agent to “keep track” of their listings when the only way they can check on the status is by visiting the property registry and retrieving the information manually.  There are also few checks and balances to manage split commissions and referrals fees that normally would oil the workings of exclusive listing arrangements.

The result is that agents take a wholesale approach to listing, trying to add as many listings as possible to their database, but without spending a great deal of time and effort into marketing individual listings.  Often a new listing will receive a website entry (with vague location information to keep other agents guessing) and perhaps a paragraph in a newsletter, but little more.   This is because it doesn’t make much sense for an agent to spend a great deal of effort marketing a particular listing when another agent can easily sell it from under them.  Given the nature of the market it makes more sense to market the country on a general basis and act more like a buyers agent than a listing agent.

In this environment giving an agent an exclusive does not make sense for many buyers.  Even if the exclusive agent provides information to other active agents about the listing they may be less motivated to sell the listing for a split commission than an alternative listing for a full commission.  Open listings often work better from a seller’s point of view.

Sellers who have property for sale in a real estate development have another set of factors to contend with.  As there is no MLS, the only way buyers will learn about the property for sale is either from a real estate agent or from the real estate developer.  Each has a conflict of interest in situations where there are developer-direct listings for sale in the same development.  The developer will of course be more motivated to sell their own listings and may not advise buyers about any re-sales.  And the agent will want to keep a positive relationship with the developer to be able to continue to access their inventory.  Furthermore, in some development agents rarely are able to run property viewings without the developer or a representative of the development being present.

1) As there is no MLS, there is no single source of information on properties available for sale. So while in the US it’s possible to walk into a real estate agents office, or visit their website, and access a complete list of properties for sale that meet your criteria, this is not the case in Nicaragua.

2) Each real estate agent in Nicaragua effectively operates their own listing database. Sometimes even different agents within the same firm will have different listings. There will be some overlap of course but don’t expect to be able to build an understand of what is available for sale from just one agent or firm. Remember also that the market is unregulated with not all listings are held by a ‘formal’ real estate agent. Your taxi driver, hairdresser and hotel receptionist will likely have a set of pocket listings they will be delighted to show you.

3) In fact all listings in Nicaragua are effectively pocket listings. Very few are exclusives. You’ll often find agents playing hard to get with their listings – for example not providing any location information on online listings – for fear that another agent will be able to locate the property and list it themselves.

4) Although some real estate firms will collaborate with each-other, in practice this behavior is quite rare. Furthermore agents are more motivated to sell a property they have listed for a full commission than collaborate with another agent for a split commission (especially when there are no checks and balances in place to ensure they would get paid if a sale eventuated).
5) Without a central database of properties that all agents can access, and given the lack of collaboration between agents, it makes little sense for buyers to grant an exclusive to an individual real estate agent. This also has significant implications for sellers.

So the lessons for real estate bloggers:

• Don’t just blog your listings.  You need to add more value that that.
• Write about the lifestyle that your properties will deliver
• Become the center of your community by writing about local businesses and services, taking photos and keeping readers up to date with developments
• Encourage two-way communication – just like you would with a friend.

Check out the full post on bloggodown.