Buying a House in costa Rica


Many, if not most countries in the world severely restrict the rights of foreigners to buy property. Some absolutely prohibit it. Not Costa Rica; this is one country where you needn’t be a citizen or go through all kinds of legal gymnastics in order to own property. If you’re big enough to buy it, it’s yours.
The standard recommendation to visitors is always to wait at least six months before buying property. However, many catch real estate fever within the first few days of their initial visit and end up buying something anyway. At this particular time, there seems to be a buying frenzy in Costa Rica, with people from all over the world plunking down money to buy something—anything—before it’s all gone.
Although buying property in Costa Rica should be rather straight forward, it can be tricky if not handled right. The first rule is: find a competent, English-speaking attorney to handle the deal for you. This can be a challenge in itself. Since qualifying as a lawyer in Costa Rica isn’t as complicated as in other countries, you’ll find many people who call themselves attorneys, but actually practice law as a sideline or specialize in a particular line of business and know nothing about real estate. A poor attorney isn’t necessarily crooked; he could be inefficient and incompetent, which is just as bad. You need a lawyer to be sure the person who is selling you the property actually owns it. You must be positive that liens, mortgages and second deeds aren’t attached to the property like lamprey eels on a shark’s belly.
The second rule: never count on a verbal contract for anything. A handshake means nothing. You may think you have a deal, and when you return with the cash, someone else owns the place and is moving in furniture. Get everything in writing, after you are completely satisfied that the property is registered and actually belongs to the seller.

Since Costa Rica is so small, the government is able to keep land records in one place, at a central title registry called the Registry de la Propiedadin Zapote in southeastern San José. All liens and attachments must be registered here and are open to the public. Even though the process of checking out a deed takes but a few minutes, your attorney needs to know how to go about it. If you find nothing against the piece of real estate, you can safely transfer it to your name, and any outstanding debts or obligations not registered are null and void. But don’t feel smug until you make sure that your lawyer actually registers your new property and the documents are stashed away in your safe-deposit box. Inquire around the North American community for recommendations for an attorney. Some claim that an attorney from one of the “old families” are best, because they know a lot of people in the bureaucracy who can make things easier.
Do not trust the seller or agent just because he is a fellow North American! There’s something about a foreign country that seems to bring out latent tendencies toward larceny in some of our compatriots. If you follow the Tico Times crime news, as I do, you’ll read about an astounding number of confidence men who come out of the closet the moment they arrive in Costa Rica. Mostly they are rank amateurs, but since they deal with people like me—also rank amateurs in business deals—they can cause much damage before they are finally caught. Make sure you’re dealing with someone who is honest. And, make sure the lawyer you hire represents you, and not both parties! Legally, he can represent both sides; if his original client is a crook—look out.
In Costa Rica, installment sales are not the norm; you need to plop cash on the barrel head for most property transactions. Real estate agents take a commission of between five and ten percent, and closing costs amount to another five to seven percent—usually split between buyer and seller. Prices are commonly quoted in dollars, even though that may be technically illegal.
Above all, do not be so overwhelmed by the beauty and tranquility of Costa Rica that you pay the first price asked. Ticos can display irrational streaks of optimism when valuing their houses or farms. Foreigners, bloodthirsty for profit, can be even worse. Determining the actual value of properties is difficult, because there are no “comparables” to gauge value as we do back home. Everyone knows how much is asked for a property, but the selling price is always kept a guarded secret, since property taxes are based on the selling price.
Naturally, the farther from the city or ocean, the less expensive property will be. But that lovely, isolated, mountain slope location with a gorgeous view of the valley could be an open invitation to thieves whenever you go shopping. Also, if you’re buying unimproved land, be sure you can bring electricity and year- round water to the property. (Some parts of Costa Rica suffer water shortages every dry season.) Make sure the soil is suitable for a septic tank. If sewage can’t be aborbed, it will sit around, back up and make your new home smell like an open sewer.

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