VISIONS OF SAND IN THEIR HEADS
The second home market in foreign places isn’t dead, says Real Estate Expert Peggy Worthington, it’s just slowed like the rest of the global market. That means there are places to go and places to see and places to buy like never before
By Nancy Clark
In my 30-plus years of dabbling in real estate, I have had Realtors encourage me to proceed with a deal even when we both recognized the downside inherent in the situation. I’ve had them hedge their answers to me, not wanting to spill the straight-up truth. But never until I met Peggy Worthington did I have a Realtor tell me, “No, I won’t let you make an offer on that property until you visit it in person.”
In hindsight, I figure she saved me a minimum of $5,000 in lost deposit fees upwards to $350k in what surely would have turned out to be a rash decision followed by a recession and more regret. She gained a lot of mileage in my opinion that day. Come to find out, I’m not alone in my elevated opinion of her.
From her desk in Panorama Park in Englewood, Colo., Peggy Worthington (www.peggyworthington.com) has found her niche in selling property half a world away in the beachy destinations of Mexico, Panama and Costa Rica to U.S. buyers. She’s turned her passion for discovery travel and affection for tropical climates into a viable business in recent years. But in keeping with her natural propensity to log inordinate hours of research before making any decision, it took Worthington three years to decide where in the world she’d make a purchase herself.
There isn’t a day that goes by that Worthington’s phone doesn’t ring with yet another caller asking how to sell their timeshare. For that, Worthington has one answer: the resale value is almost like giving the property away. Fractional ownership—the newest trend in second home ownership—is just as challenging, if you ask Worthington. “Either way, you’re still buying a vacation. The resale value doesn’t exist,” she says.
So why are timeshares and fractional ownership synonymous with an umbrella drink? Because historically most timeshares are purchased on a whim, say during a winter vacation getaway. It’s got appeal on the surface and lasts a little longer than the suntan which always seems to fade in the plan on the return trip to reality.
Statistics show that second home buyers keep their vacation getaway property on average 4 years. It’s likely longer than that today, says Worthington, because the foreign markets have been hit just as hard as the States. But that doesn’t mean that buyers aren’t still seeking their place in the sun; rather, says Worthington, it means that the level of due diligence necessary in transacting this kind of purchase is even more important.
“It really goes back to when I got started in this market,” says Worthington of her introduction to the foreign markets. “Initially, I traveled with developers. After awhile I could see the things I thought developers could. Then I worked with an environmentalist in Panama and after that got into researching the policies in Panama, Costa Rica and Mexico. Even when I did decide where it was I wanted to buy (in Campeche, Mexico), I still had a separate attorney, other than the developer’s attorney, go through the contract. The translation into English was, well, awful. It’s the fine print that matters when you cross borders. And it’s not that they’re doing anything maliciously, it’s just that it wasn’t right. No one should ever buy property in another country without having their own legal representative review the contract.”
Worthington has worked with buyers who are expats, those seeking a second home where they’ll put in several months a year, and those who just want simply to own the vacation spot they return to year after year. In retrospect, the most contented buyers are those who have “bought within their means,” says Worthington. By that she means buying into a place that leaves their options open, one of the topmost considerations being that they can leave the place locked and not have to worry about it—that it’s watched over by an HOA or security team or is a development with a guard gate.
“You don’t know how many times people buy their wonderful home on a stretch of beach and it turns into a nightmare when weather hits,” Worthington notes. “The dream so many people have can quickly turn into a nightmare. When I’m working with buyers, it’s one of the many things we go over…without scaring the heck out of them, of course.”
Worthington’s insistence that buyers give a lot of consideration to what they want to do with their days and nights. “There’s more to life than just the beach. Different communities have different emphases, just like in America, only a lot more exotic.” She references a community in Boquete, Panama where Americans have instituted a reading program, working with children there. In another, a group of retired Philharmonic members have started up their own orchestra.
Besides the sun, sand and entertainment, Worthington urges her buyers to take into consideration the exchange rate. “In Ecuador, people can live like kings for 25% of what it costs to live in America,” she says of the buyers she knows who’ve invested there. “Is it a financial win-win? If so, you can rent it out and use it, so that it’s income-producing.”
Infrastructure is another consideration. Getting there, yet another. Availability of medical services is a biggie. In downtown Panama City, there’s a Johns-Hopkins hospital staffed by surgeons, most of whom graduated from Texas med schools. Most of the South American and Latin American countries have public health systems that guarantee care for all, but that doesn’t mean it’s on a par with U.S. healthcare.
When Worthington points a buyer to a development, she’s already vetted whether the developer is reputable. “A lot of projects never get built and there are variables to each and every project.” It doesn’t surprise her when she hears of plans that never got off the drawing board. It happens. “The world is getting smaller all the time and its part of what I do to check that out.”
Her own relentless pursuit of exactly the right property for herself is no less than what she does for her clients seeking a home South of the Border. She doesn’t pretend to speak more than a smattering of Spanish and cites the fact that her own daughter, an attorney who concentrates in immigration law, and has spoken fluent Spanish for 20 years takes ongoing language classes to keep her linguistic edges sharp. “After all, a purchase involves a legally binding contract.”
All admonishments aside, the journey to find the ideal home in a land far, far removed from the daily grind is part of the adventure for Worthington and she insists her clients ride along. “Take your imagination with you…that’s part of the fun.” Just don’t ask to buy anything sight unseen. She won’t let you. And there’s nothing more satisfying than not having to suffer buyer’s remorse in the morning. Unless perhaps it’s powdered sugar sand between your toes.
DO DILIGENCE—International Realtor Peggy Worthington walks in the footsteps of her buyers when researching ownership potential outside the U.S. Here, she strolls along Jaco Beach in Costa Rica.
