Buying real estate and Investing in real estate in Costa Rica can be a very rewarding experience following certain guidelines:
- Define a cohesive strategy: in talking with your real estate agent, define your needs according to your budget.
- Develop a basic understanding of Costa Rican real estate law. Your agent and your attorney will help enlighten on the subject (see tips below).
- Familiarize yourself with local market conditions: check listings with your real estate agent in order to compare products and prices.
- Once a property has been identified, contact a reputable real estate attorney.
- Start and conclude purchase with the help of your agent, the office's broker, and your attorney (see resume at the bottom).
Your Costa Rica Real Estate investment is not something you want to leap into blindfolded. There's too much money involved and too many things can go wrong. Here are a few places to look into before you leap.
Ask your real estate agent and/or someone you trust to recommend a law firm or an attorneyt specialized in Costa Rica real estate law. Your country's embassy or one of your consulates might have some suggestions to offer. The Costa Rican-American Chamber of Commerce is worth a call.
Once you have selected a specific property, request your attorney and/or your real estate broker to conduct a title search at the Registro Publico (Public Registry) about the property you want to buy.
By law all properties must be registered in Registro Publico. Most properties have a title registration number called the "Folio Real." Once you have this number you can search the database. The Registro Publico's Report, called the "Informe Registral," contains information such as the name of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded easements, and other records that could affect the title.
Costa Rica follows "first in time, first in right" rule. Additions to a property title are prioritized according to the date they were recorded. So make sure your attorney searches your title back to the beginning.
This is the document that transfers ownership of the property. The transfer is made with the buyer and seller signing the transfer deed (called an "escritura") in the presence of an attorney. The attorney then drafts the transfer deed and registers the sale at the Registro Publico.
Custom dictates that if the buyer pays in cash, he selects the attorney to draft the transfer deed. If the purchase is financed, then the transfer can be made in various other ways.
How much are the closing costs?
The general custom is for the buyer and seller to share equally in the closing costs, unless the owner is offering the property in an easy to prove “clean” corporation.
Closing costs containing the notary fees are based on the real sales price, and now, as declared by the Colegio de Abogados, 1.5%. This fee sometimes is negotiable, depending upon the relationship that your real estate agent or the developer of a private residence project has with that particular attorney. Further added on is the transfer land tax, legal fees, and miscellaneous fees which are about 2.56% of the declared value of the property.