Purchasing property in Costa Rica involves several steps, and it's crucial to follow a structured process to ensure a smooth transaction.
Step by Step Guide to Purchasing Property in Costa Rica
Find a Reputable Real Estate Agent:
Work with an experienced real estate agent familiar with the Costa Rican market.
Ensure the agent is well-versed in the local real estate laws and practices.
Draft a Purchase Agreement:
Once you identify a property, the agent will help draft a formal purchase agreement in English and U.S. dollars.
Include details such as deposit amount, closing timeline, responsibilities for closing costs, provisions for a home inspection, and other legal aspects.
The contract should specify that all operational expenses are paid through the closing date.
Negotiate and Finalize Purchase Agreement:
The purchase agreement may involve negotiations with the seller until both parties reach an agreement.
Be prepared for counteroffers and engage in negotiations until mutually acceptable terms are reached.
Due Diligence and Escrow Setup:
Upon agreement, the buyer's attorney will conduct due diligence on the property within a 30-45 day period.
Simultaneously, set up an escrow account with a reputable third-party service, such as Sfera, to hold and distribute funds securely.
Provide Financial Information for Escrow:
Due to money laundering regulations, furnish financial information to prove the source of funds.
The escrow company may require tax returns and bank statements for the last two years and three months, respectively.
Escrow Protects Both Parties:
Escrow protects the buyer by ensuring funds are held securely until closing, preventing potential disputes.
Sellers also benefit from a neutral third party holding funds, reducing the risk of non-compliance by the buyer.
Closing Process:
Deposit the remaining purchase funds with the escrow company five days before closing.
A final closing statement will be prepared by the escrow agent, detailing wire distributions.
Both parties sign the transfer deed, and wire transfers are executed immediately.
Legal Transfer of Property:
It takes 10-15 days for the new owner's information to be updated in the National Registry.
Follow up after closing to ensure the deed has been successfully transferred.
Assistance with National Registro:
The agent can assist in setting up an account with the National Registro for online property viewing.
By following these steps and working closely with a reputable real estate agent, attorney, and escrow service, you can navigate the property purchasing process in Costa Rica successfully.