The buying process in Costa Rica | Important advice, don't get caught out!
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
https://ticotimes.net/2020/07/28/how-sugef-i 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!
Видео The buying process in Costa Rica | Important advice, don't get caught out! канала Tamarindo Rich
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
https://ticotimes.net/2020/07/28/how-sugef-i 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.
PREVIOUS VIDEOS
7. Financing in Costa Rica https://youtu.be/sgb4tPtA4ag 6- Is Costa Rica overpriced? https://youtu.be/MaWtxlOzPJU
5. How To Generate Income In Costa Rica
https://www.youtube.com/watch?v=nQllY5 EghBw&feature=youtu.be
4. Top 10 Don’ts in Costa Rica
https://www.youtube.com/watch?v=rHIiKIc9g- g
3. Insider guide to the real cost of living
https://www.youtube.com/watch?v=hV4nUI T1HbI&feature=youtu.be
2. 8 things I wish I had known before buying in Costa Rica
https://youtu.be/F5FlCpx7-dY
1. How To Travel To Costa Rica During Covid 19| Entry Requirements and What Life Is REALLY Like Here!
https://youtu.be/KmugwpzFW2U
Thanks for watching!
Видео The buying process in Costa Rica | Important advice, don't get caught out! канала Tamarindo Rich
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