But what’s involved? And how exactly do you go about buying a house in Costa Rica?
Savvy buyers know you should use a professional realtor in Costa Rica for buying real estate. Licensed Costa Rica realtors Dennis Easters and Gerardo Gonzalez, with Pure Life Development of Atenas, explained these 9 easy steps to buy real estate in Costa Rica.
A couple of things to know first:
In Costa Rica, property titles are usually held by a non-commercial shell corporation, which is called an S.A. (Sociedad Anonima), like a C corporation in the USA, or an LLC (Limited Liability Corporation). Title can also be held in a person’s name, but using a corporation limits your liability; and if you are not a legal resident of Costa Rica, the corporation can open a bank account and utility services for the home, whereas you cannot.
It’s not common, but sometimes it is possible to arrange owner-financing with the seller. Bank mortgages are exceedingly difficult for non-residents of Costa Rica to obtain. If you are going this route, your lawyer will discuss with you the terms of the private mortgage, how the mortgage will be paid, and other details, which are negotiated and included in your purchase contract. The costs of arranging a mortgage and officially recording it are always the responsibility of the buyer in Costa Rica.
Once you and your realtor have found a house you want to buy, you will meet to negotiate the vital points of the purchase offer which will protect you in the future: home inspection, closing date, amount and terms of the escrow, purchase price, items to be included in the sale: furnishings, vehicle, shell corporation for the property, etc. During that meeting, you will calculate the closing costs – lawyer’s fees, transfer tax on the deed, and official certifications (doc stamps) – and how they will be split with the seller. Then your realtor will present the offer.
Contact a real estate lawyer in Costa Rica. Your lawyer will do a title search on the property to ensure there are no liens or attachments, and explain the laws and contracts of Costa Rica. He/she will prepare an official contract to be signed by you (the buyer) and the seller, which must be notarized. Ideally, you would want your attorney to also be your escrow agent. In Atenas, Costa Rica, Pure Life Development real estate agency uses Costa Rica attorney Pablo Arias, who is also a notary and a legally authorized escrow agent.
Execute the contract. You and your realtor will arrange for the home inspection and survey verification, make sure escrow is deposited, and any other due diligence necessary. If there are any problems, your realtor will help you find out if the issue can be legally resolved and negotiate that with the seller.
Prepping for closing. Your realtor will help you arrange how payments will be executed, whether by bank transfer to Costa Rica or to another country, or by certified check in Costa Rica.
Preparing for ownership of your new home. If you are lucky enough to have chosen Costa Rica realtors like Pure Life Development of Atenas, they will share with you their extensive network of qualified professionals: pool service, gardeners, maids, electricians, contractors, handymen, doctors, lawyers, immigration specialists, movers, pet-sitters, architects, where to shop and dine, what to do in the area, where to go on vacation, etc.
The day before, or day of the sale closing, you will do a walk-through of the house and property to make sure nothing has changed per the contract (the house hasn’t burned down or been damaged), and that everything you purchased with the house is still intact. Your lawyer also will do another title search to make sure there are no new liens or attachments to the property.
For the sale closing, you will meet at your attorney’s office to sign the official papers. Once the papers are signed, your attorney will hold them until the final funds are received, which usually is simultaneously being completed at the closing table. Buyers typically will either call their bank or go online and execute the final payment by bank transfer at that time. An official bank confirmation that the transfer has been sent is enough in most cases to conclude the closing. At this time, you should make sure you get your keys and anything else you need for your new home.
Your lawyer will submit the paperwork to the Costa Rica national registry to change the title to your name as the new buyer, or your corporation. Your lawyer will usually receive the official confirmation showing the new registration within 8 to 10 days.
Then you CELEBRATE!!!
Article by Shannon Farley