The process of buying a property in Costa Rica can be a long one — especially when beginning your search from outside of the country. You may become greatly reliant on the relationships that you have built with your realtor to provide you with any and all information that you need to make your decisions. So, in the spirit of providing information to potential buyers, this article is to inform you about how long the buying process takes in Costa Rica once you get started.
On average, serious Costa Rica property buyers spend anywhere from two weeks to 2 months “shopping” for a property with intent to buy. Prior to the shopping stage, we estimate that our clients spend anywhere from 2-5 years on average thinking about and seriously considering buying a property in Costa Rica. We have clients who have come to our Southern Zone region of Costa Rica on the South Pacific coast nearly every year for almost a decade to see a few properties. There are also those who fall in love on their first visit and poke their heads into our office —just to get a feel for the market. We show them a couple of properties, they go home, and boom —they make an offer before they even head home. There is a whole array of potential buyer types in between, but what this article will focus on is how long the process takes once a personal commitment to buy property in Costa Rica is made.
Right off the bat, two steps can be skipped in a Costa Rica property search. These are: obtaining your credit report and getting pre-approved for a home loan. The easiest and most economical way to buy property in Costa Rica is still cash in hand. You may be able to get a loan against an existing property in your home country, a private loan, or use a fund like an IRA to invest in a property. However, this article will not focus on these options. Rather, this is a timeline of what the average client experiences when buying a property in Costa Rica.
Finding a real estate agent (1-30 days)
There doesn’t appear to be any real method for choosing an agent. People frequently stumble into our office saying that they were driving by and saw our sign, remembering that they had seen a video or article and we seemed to know what we’re talking about. But more often than not, people will walk into the office that is nearby to where they are staying or recommended by someone they meet. One time a client picked one of our agents because they shared a last name. Now that’s serendipity!
Regardless of what anyone else is doing, we recommend spending a few weeks’ time researching the different agencies in the region. Buyers need to trust their agents, so we recommending vetting anyone you are looking to hire to ensure that they are diligent, competent and honest. Ask references of family, friends, or anyone you’ve met and like in the area. Look to hire someone local with intimate knowledge of the area in which you want to buy property in Costa Rica. Some questions to ask:
How long have you been in the business?
Is real estate your full-time job?
How many buyers do you work with at once, on average?
Can I please see some of your references?
Researching potential houses and neighborhoods (3 weeks)
Thanks to the many uses of the internet, the process of searching for property in Costa Rica has become much more streamlined. With websites such as Point2Homes and Casa Costa Rica Real Estate, buyers can often create a short list of properties before reaching out to an agent that they like. Multiple listing sites like these can be used to filter specific search parameters that you may be looking for.
Because there is no official MLS in Costa Rica, it is difficult to search in the whole of the country, and even in the whole of an area. Brokerage websites like ours have a large majority of the listings in our region, but there are also some that we have chosen not to list for a variety of reasons that include proximity, price, size of the property, location, etc. We focus our attention and efforts on listing properties that meet the standards of our typical client base. As such, we claim to feature the best properties the Costa Ballena region has to offer. Even so, we keep abreast of what is available in the region. With a good realtor, you should be able to give them your search parameters and receive back more refined suggestions than what you might get through searching on your own.
It is a good idea to break up your housing criteria into needs, wants and desires. Find out what you can’t live without (your needs), what amenities might be nice to have (your wants), and what amenities would be absolutely wonderful if you can find them (your desires). Spend time with yourself and your family doing research and discussing options. Be prepared to revise your criteria after learning what’s available on the market within your budget.
Find a house and make an offer (time frame varies)
After your initial meeting with a realtor, you should receive a number of listings that meet your criteria.If you are not in the country, now is the time that you will start planning a trip to come to Costa Rica as soon as you are able in order to view properties. It is best to come as soon as you find a few options that look interesting, and especially if you see something that you might really love. Buyers are visiting our region of Costa Rica all throughout the year and listings are often sold within a few months if they are priced and marketed well.
Once a buyer finds a property that they really love, the process moves more quickly. An offer is written and signed by the buyer, and the realtor will present the offer. At this point, the seller has three options: accept, reject or counter. Things that are often negotiated are the closing timeframe, closing costs, the results of inspections, and of course the price.
Opening an escrow account is a part of the Sales and Purchase agreement, which is signed after the Offer to Purchase has been negotiated and agreed upon. Opening an escrow account has special paperwork requirements (a fairly detailed process that your agent can help you prepare for prior to this stage. To complete the Sales and Purchase agreement, a 10% deposit is made into the escrow account.
Completing the due diligence process (up to 30 days)
Due diligence should be done on any property you are considering to buy in Costa Rica. Consumers and real estate agents can only see cosmetic defects while walking through a property, whereas the purpose of the due diligence process is to do a thorough inspection of all of the details of a property. In a home, this will include plumbing, electrical, foundational integrity, and roof integrity. On an undeveloped property, you will want to get a soil test, check for water, check if utilities are set up, and so forth. Both require boundary verifications to be completed.
A home inspection typically takes a few hours, but getting the inspector to the property can take a few days. Most real estate agents can recommend an inspector with whom they work frequently and trust. It is up to you to make sure that you choose a realtor who you can trust, and who will set you up with the right relationships to make your Costa Rica property venture a wonderful success.
The due diligence process also includes legal verifications that must take place, such as if there are any liens or embargoes on the title of the property.
Closing the purchase (1 week)
The buyer and seller of a property must be in the country to sign the legal document that transfers ownership. If you cannot be present, you can grant someone Power of Attorney in your place. Once due diligence is accepted, the rest of the money is deposited into escrow. Roughly a week later (5 business days) both parties will meet at the lawyers to sign the final documents and the purchase can close.