Many people dream of the opportunity to purchase property in the amazing country of Costa Rica. It normally starts with a simple search on the web, which in turn opens the door to thousands of picturesque pieces of land or homes that all seem to good to be true. The amount of information and the sheer number of properties can be overwhelming at times. The following information will help you to layout an outline for the process of purchasing real estate in Costa Rica.  More and more Americans are venturing into the Costa Rica market, and a large percentage of them are becoming very pleased with the results of their investments. By simply following the steps listed below, you can be well on your way to securing your investment as well.

1. Decide which area of the country is most desirable for you

It is essential to determine which part of the country seems to be the best fit for you. Costa Rica has so much to offer with its varying regions, that I highly recommend taking 3-4 weeks to travel the country, and see the many different regions and what they have to offer.  The Northern Pacific Region has been the”boom town” over the last decade or so. Small surfing villages like the town of Tamarindo are beginning to explode with condo projects and the prices are reflective of the growth with substantial increases. Infrastructure is still lacking in some respects, but continues to improve.  

    The northern part of the Central Pacific Region has also experienced major development projects in and around the beachfront town of Jaco. This area enjoys quick access to San Jose and the international airport which has facilitated the growth. The southern part of the Central Pacific Region which is located south of Quepos seems to be a great opportunity as there is a 30 mile stretch of Coastal highway that is yet to be paved. The horrendous road conditions have stymied development south of Quepos and the prices (while increasing rapidly) are still proportionately less than farther north.  The paving of this last remaining stretch of coastal highway has begun, and upon its completion in 2010, this area should enjoy a tremendous increase in property values.

   The Osa Peninsula/South Pacific Region is the last “frontier” for development, and continues to be a remote location with very little infrastructure. This area is quiet possibly the most majestic and pristine part of the country and will one day become a very high end eco-destination.  

   The Central Valley Region is very popular with Americans because of its ideal climate, and close proximity to the city of San Jose, and all its amenities. Two-thirds of all people in Costa Rica make their home in the Central Valley.  Areas like Atenas and San Ramon are becoming very popular with individuals retiring to Costa Rica because the prices are very affordable and they have quick access to the city.  The Lake Arenal area, located in the northern part of the central valley,  is also seeing a substantial influx of foreign ownership as the prices are affordable,  and it is home to the largest lake in the country and the most active volcano.  

2.  Decide on a budget and stay with it

  There are so many beautiful properties in this small country that one can get caught up wanting to see them all.  The best way to take full advantage of the time you have in Costa Rica property hunting is to determine the amount you are willing to spend, and stick with it. Find a price range you are comfortable with and let the agents you are working with narrow your search down to properties within that range. Stick to your budget, and you will be able to see more properties that you might actually buy, as opposed to seeing one’s that are on your “wish list.”

3.  Plan your trip

   This is a crucial part that costs many people valuable time by improper planning. I would recommend a minimum of two weeks of time reserved for your initial trip. The pace of business in Costa Rica is much more laid back and less hurried than that of the States. There always seems to be something that comes up, which in turn leads to delays and obstacles when viewing properties. There is so much real estate available on the market, that even though you have scheduled certain showings, you may run into three other desirable properties on the way. Be sure to allow extra time so that you do not feel rushed or hurried during the buying process.

4.  Schedule appointments

   The web is such a valuable resource when it comes to property hunting in Costa Rica,  so utilize it!  Before even leaving for your destination, take the time to set up as many appointments as you can with agencies you feel are reputable. Please keep in mind, that because of the reserved attitude toward business in Costa Rica, that there is a good chance that some of your appointments may be cancelled or delayed. I would recommend setting up as many as possible, and in the event you cannot make one, simply call and cancel, which is after all, common business practice. Do your research here, and try to get people on the phone to establish a personal realtionship, and you will find they will be less likely to leave you hanging. You can purchase inexpensive calling cards for Costa Rica at www.raza.com.

5.  Get started property hunting!

    Now that you have scheduled your trip and set up all your appointments, the hunt is on for your dream property. Remember to stick to your budget,a nd be weary of agents that are trying to push off on you certain properties. There are some agents who will simply show you the properties that make them the most money, so at times you either have to be upfront and direct about what you want, or look for another agent. I think when we look to make major purchases, we all base some of that decision on the “vibe” we get from the people we are dealing with. Be sure to trust your instincts in regard to the people you are dealing with, and cut and run if it is does not feel right. One thing that happens to many first time buyers in Costa Rica is that they fall in love with the first piece of property they see. (which is common and quite easy to do) Do not fall into this scenario, as you may run across something even better. This country is so beautiful that people are often awe-struck by its scenery. Keep chugging and try to view as many properties as you can, so that you will end up with a better idea of what is available , and what things are selling for. Once you have settled on that perfect piece, ask your agent to provide proof to you of two documents pertaining to the real estate. The first document is known in Costa Rica as a “plano” or survey. This document shows the legal boundaries and ensures the buyer there are no easements or proeprty restrictions on the place. The second piece of paperwork that is essential to a legal and binding transaction is referred to as an “escritura.” The escritura is the title to the property and guarantees there are no outstanding liens or encumbrances that would prevent you from buying the property free and clear. This document should be registered with the National Registry, and you can check its validity online at http://www.registronacional.go.cr/

6.  Submit an offer to the seller

   This process is very similar to the one here in the States.  However,  if you are able to find some similiar properties in the area that have recently sold, you may have some leverage to negotiate down. Costa Ricans are very open and honest people, so once you have found the piece you plan to buy, start asking around in the area about comparables. You will more than likely find a few similiar properties that have recently sold, and therefore have a better idea of what you should be paying. Remember, the offer is where you may save yourself thousands of dollars, so start low, without being insulting, and work your way from there.

7.  Close on your purchase

   Once you have come to terms with your seller, and have found an attorney to handle the transaction, you are ready to close. This process is not unlike the one we have here in the U.S., and Stewart Title is even offering title insurance in Costa Rica now. http://www.stewartdr.com/.   It is customary in Costa Rica for the buyer and seller to split closing costs equally, but this can be negotiated by either party. There are many bilingual lawyers in Costa Rica, and thet typically charge more for handling the transaction in English as opposed to Spanish.  Most people elect to form a Costa Rican corporation for holding their property. This generally runs around $800-$1000 dollars, and helps to limit liabilty to some degree for the home owners. The lawyer will handle the transfer of the funds, and within a few weeks your new property will be registered with the National Registry, and you can check its status online. You have now completed the buying process in Costa Rica, and are the proud owner of your own piece of Costa Rican paradise.

Tags: Investing in Costa Rica, investors

This entry was posted on Saturday, November 17th, 2007 at 1:56 pm and is filed under Basic Tips, Investing in Costa Rica. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.