The buying process in Costa Rica | Important advice, don't get caught out!
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- Опубликовано: 13 июл 2024
- Richard is the owner/broker of Coldwell Banker Tamarindo, and the founder of the vacation rental company www.viptamarindo.com. Please get in touch if we can help.
1. Summary
The good news is that the buying process is similar to North America, contracts can be done in English most good attorneys speak English. There are some common pitfalls to avoid though. See below
1. TheProcess
Identify a property, make a written offer, negotiation, acceptance, escrow, due diligence, closing
2. Identifying a property
A good realtor will save you a lot of time and money. It is important that you chose a realtor registered with SUGEF, and who is a member of a Costa Rican real estate body. The realtor will be able to eliminate properties that will fail due diligence due to his local knowledge and familiarity with local rules and regulations
ticotimes.net/2020/07/28/how-... s-changing-the-real-estate-business-in-costa -rica
3. Choosing a lawyer
There are many professional English speaking lawyers in Costa Rica. I recommend you visit a couple at their office before you decide who to work with. A larger law firm with multiple partners is often better as they have depth of knowledge and a track record. The most important thing is that they are independent of the seller
4. Offer and Acceptance
It is always better to make a written, not verbal offer. The realtor will write up the offer, in English for you to sign, then give 24 hours for acceptance from the other party. Expect a back and forth. Key terms are amount, closing date, closing costs
5. Escrow service
Generally the lawyer will recommend an Escrow service that must be registered with SUGEF. Once your offer is accepted and the contract is signed by both parties, you will have a week or so to send the deposit to Escrow. Signing up to the escrow service can be painful, the regulatory body has a lot of anti money laundering precautions in place and you may find this process invasive
6. Due Diligence
Generally the lawyer will do the heavy lifting, with the realtor overseeing the process, addressing issues raised in the DD. Key aspects are ownership of the property (who can sign on behalf of the seller), legality of the construction, liens or mortgages or taxes due,, inspection, topographical study. The lawyer then produces a report, and you at that stage accept, in which case your deposit become non refundable, or reject, in which case the escrow funds are returned to you, often less bank transfer costs, and a small legal fee
7. Buyingthrougha Corporation
The most common method of purchasing is through a new corporation. Often the seller will own the property through a corporation, but it is best to form a new one. This adds a level of protection and makes it easier if you intend to earn vacation rental income through the property
8. Closing costs
Total closing costs are just over 4% of the agreed price. Usually buyer and seller split the cost 50-50, but this is a negotiated item. If you are buying from a Costa Rican they will expect the buyer to pay all the closing costs. A new corporation will cost around $1000, a property inspection around $500. The seller pays the realtor.
9. Closing
Once you accept due diligence you will need to send the final balance to the Escrow company. It is not necessary to be in the country for the closing. On the closing date the title will pass and the funds will be transferred to the seller. It generally takes up to 2 weeks for the transfer to be reflected in the national registry
10. The ‘tico’ way
The process outlined is the recommended safest way, and normal in most beach communities.. If you are caught in a Costa Rican process done the old traditional way the seller will not want to use an escrow company, will want the non refundable downpayment sent directly to his account, and the final payment made by certified
check. I would only agree to this process if you are getting the absolute deal of the century. If in doubt make sure you have a brilliant lawyer and realtor, and follow their advice.
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Thanks for watching!
Thank you so much! So helpful.
Again,
Great content.
Examined and clear.
Thankyou.
I'm getting warmer in regards to my descision for moving to Costa Rica.
This was great! Super clear and helpful. I’m eating up all of your videos! Thanks for demystifying some of the process of moving to Costa. Hope to meet you in Tamarindo one day 🤙
Great advice!, there is good and bad, just need to be careful to know who is the right people to deal. This will avoid a lot of stress & problems for beginners!
Great information! Thanks for sharing!
When we closed all the documents where in Spanish. Wasn't a big deal, but it did create some challenges. Took almost 6 months to post in the government records which was scary until it recorded. In the end it was awesome and would for sure do again.
Rich, thank you for making this video!
My pleasure
Sorry, just read you were! I am coming to you and am looking to relocate as an expat from Florida. Certainly, I will be coming to you. I love your videos!
Great!
Do you have any more recent videos than 2 years, please?
Be aware Costa Rica law system encourages squatters. I have been fighting for my home for a year and the system have not help me at all. The system remove all owners rights and gives your home to the squatters. Contracts don’t have any value in this judicial system
Are you a realtor? I love your RUclips Videos
In Costa Rica the words are said everywhere: paradise and Vida Pura! But I stayed in Costa Rica for 20 days and left sick!
Can you explain why ?
Hi!
Nice vlog.
How can I become a Real Estate Broker in Costa Rica ? Could you recommend me a place?
Hi Rich, app is acting up - was trying to ask for your advice under another video, so couple of similar messages might be there - what would you advise to a person looking to purchase a small piece of land these days (the video was from 2 years ago) It might be a stretch for me now, but I am afraid it won't be affordable for me at all in 4-5 years when I am ready to pull the trigger. In the area I am looking the prices went up 5 times within last 5 years (local friends told me). Any advice is much appreciated!
Is it the same for buying land
Rich, I have just watched a video on buying a property in Rosarito BC, Mexico...the difference is huge in advantages of all types...it's just 15 minutes from the USA by car, the quality of the constructions is similar or even better than in the USA...the medical services avilable are first world and much, much cheaper that in the USA, etc. etc. etc...the usual excuse is that is dangerous which I checked with retirees in the area and is just not true...ok, so, what is the point of recommending buying and living in Costa Rica when after retirees find out how a scam that country is they get back just after two years in there...
Hi Rich, your videos are incredibly helpful. We’re seriously interested in moving to Costa Rica and are just starting to gather information.
Rich can you use an escrow service in the USA if both parties are not in Costa Rica?
Yes, that is normal
So I met a man who is willing to do a month to month payment. What do you think about this? Thinking about this and planning to see a lawyer in Costa Rica
How about buying land in Costa Rica?
We who are investors and are going to pay all these people have to give a lot of references about our economic life, why don't we have the right to ask for all the references from others to whom we are putting our money in their hands ? They are the ones who should provide us with all the information about their economic life! Because they are the ones getting our money!
It seems to me that the paperwork issue should be taken care of by a lawyer or realtor, rather than be at the mercy of a local bureaucrat. Am I wrong?
My last video i upload from the Rotonda Tamarindo
The risk of the buyer losing their money is very high! And the buyer has to give all the references and is suspicious of money laundering, but does the buyer have to trust others when it is his own money that he is investing?
Why doesn't CR have an MLS yet? I mean it's the 21st century. Come on!!
It would make life easier that is for sure. But Costa Rica moves at its own pace. Check out www.coldwellbankertamarindo.com. We have an internal MLS with 2000 properties all over Costa Rica
It's great for people to look for the house of their dreams, problems arise later. The investor is in a strange country that doesn't speak his language and is going to invest thousands of euros with risks. Do you want to stay in Costa Rica? Use your thousands traveling and don't buy anything anywhere. In the times we live in, the perfect place is just a dream! If Edem existed, we have already lost him!
Your use of the term Realtor is loosely used. A Realtor is a member of the National Association of Realtors in the US. Not all real estate agents are Realtors. A Realtor has completed state licensure and successfully passed a test that only 50% of people pass the first time.
If someone in Coasta Rica states they are a Realtor, ask them what MLS they are a member of. If they say none, chances are, they were a taxi driver the day before they claimed to be a Realtor...
I am a Realtor and there are but a handful of actual Realtors in Costa Rica. The rest are people who simply sell real estate.
Very quickly we will discover that Costa Rica is not the paradise we thought it would be, but it will turn into hell!
Why?
Can you explain why ?
@@benedictecarbonnier863 It was fate, it was not Costa Rica that was to blame.
On the 19th I'm there again, I already miss it