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.
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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