Is your heart pumping, are you feeling that you just have to have that property, no matter what? Are you experiencing an emotional roller-coaster. Are you convinced that you need to move quickly, very quickly or you may loose the deal? These are all symptoms of 'land fever' a mental state that investors of overseas property in emerging markets tend to be most susceptible to.
We’ve certainly seen examples of land fever in the markets we cover in Central America. Beautiful ocean views and low prices seem to make matters worse. The cure is to slow down and think with your head (not just with your heart). Get logical and get answers to the kind of issues we've outlined below.
It may be true that a title check can get in the way of a quick closing. But it may be the best decision you ever take. Land title in Central America is not always straightforward and land can be 'owned' or 'possessed' under different legal forms. The only way you will uncover the kind of legal ownership you are purchasing is to hire an independent attorney (i.e not your sellers attorney) to conduct a legal due diligence check on the property.
We'd even take the legal aspects one step further and apply for a title insurance policy prior to closing. US companies such as First American and Stuart Title have operated for years in the region. If you’re purchasing in a master planned real estate development such as Rancho Santana in Nicaragua or Playa Blanca Panama (there are many more examples of course), ask the developer if they have a master title insurance policy. It’s a good sign if they have one without any exceptions.
People with land fever don't really want to get stuck into nitty-gritty (boring?) questions about infrastructure. They prefer to enjoy the sunset view from the property rather than wondering about wastewater hookups. Discussing the perfect orientation for their future home is more fun that finding out whose responsibility it is to maintain the roads. But answering questions about water supply, road access, electricity provision and other infrastructure points is vital to a successful purchase.
The problem with purchasing in Central America is that it's hard to get hold of reliable market data on sales and price trends. These kind of statistics are not published. And as there is no MLS (Multiple Listing Service) in countries like Nicaragua, Panama, Costa Rica or Belize (the markets we cover), there’s no single source you can access to determine all the properties for sale in a given market. There’s no alternative but to put the legwork yourself, go on property viewings with every agent active in your market and build a spreadsheet of asking prices to try and get a handle on value. But that doesn't normally sit very well with anyone infected with a case of land fever.
