One of the first questions that my clients ask is how do I go about buying a property in Costa Rica? It is important to know that buying a property here in Costa Rica is a process and that there is not a lot of financing as easily available or at good interest rates. There are a few banks that offer financing opportunities to foreign buyers these are Lafise Bank, BAC, and BCT. There are also some private lenders who can provide cash to buy. The financing is for built homes and condos or to build if you have already purchased the land. The average interest rate is between 9-12% with a 20-year mortgage.

Having said this I have to emphasize that most people are using cash to buy a property in Costa Rica because they have sold assets in their home country, or others get a HELOC on their primary home. So here are the steps to buying property in Costa Rica if you have cash readily available for the purchase.

Step #1: Find the property that is right for you.

It is important to see all your options and make sure you feel comfortable in the area you have decided to buy whether it be in a gated community or not. Buyers have to decide if they want the property as an investment for rentals or for a full-time retirement home.

Step #2: Get an accepted written offer between buyer and seller.

The buyer’s agent shall prepare a document with all the price, approximate closing date, how transfer fees are covered, who gets a commission and what escrow company will be used for the transaction.

Step #3: Have a lawyer you will work with to begin due diligence.

The lawyer will review that the property is free of any liens, that all taxes or other fees are paid up to date, and that it can be transferred freely to a buyer at the time of closing.

Step #4: Open escrow to put a deposit down on the property to hold during due  diligence.

To open escrow the buyer will need to have proof of funds, purchase agreement signed and other documents filled out such as KYC and  escrow agreement.

Step #5: Once the lawyer gives the green light then plan the closing date. After the lawyer gives the go-ahead it is agreed on what day works for closing and about a week before this the buyer has to send the balance of funds to escrow.

Step #6: For closing both buyer and seller need to be present or give POA.

In Costa Rica a signature from both seller and buyer is required to legally transfer a property. If either or both parties cannot be present then there has to be a special power of attorney given to a person who will sign in place of buyer or seller. Once the transfer deed is signed this is sent to the escrow company and the funds are released as agreed in the closing statement prepared previously by the escrow company.

Other things to consider when thinking of buying a property in Costa Rica is whether to buy in your personal name or to create a corporation that holds the property. This is something the lawyer needs to explain to each client and help make the decision with as each buyer’s needs are different.

It is also very important to know how a buyer will be paying utility bills and property taxes. Some buyers open a local bank account and can pay using online banking, others hire a property manager to pay and oversee the property they have purchased. And it is important that the utilities are changed over to the buyer’s name and that the buyer is registered with the local city hall so that taxes are updated also.

All of this is part of becoming a property owner in Costa Rica and that is why a good real estate agent can help buyers become informed of all aspects of buying in Costa Rica. To us at JB Real Estate it is about providing a full service to our clients and making the process as easy as possible.