BUYING A HOUSE IN COSTA RICA

Perhaps you are reading this Life & Style Magazine because you have decided to invest in your dream and purchase a property in Costa Rica! One of the top questions you no doubt have is, “what is the process for me to acquire a property in Costa Rica?”. We at Blue Zone Realty are here to help!

The process for purchasing is quite straightforward and is similar to what you would experience in the USA or Canada as an example. Firstly, once you have found the property you would like to purchase, your representing real estate agent will draft and present a written formal offer on the property of your choice. Once the terms of the offer are accepted and it is signed by both parties, your Costa Rican attorney will draft the legal contract for the purchase, this is known as a Sales and Purchase Agreement (SPA). When the SPA is finalized and is signed by both parties the Due Diligence period will begin.

The Due Diligence time frames can vary, however 30-45 days is typical for a single family home or building lot. Also, once the SPA is signed, you as the buyer will open a Costa Rican escrow account which will hold the initial deposit amount until the closing. Ideally this is to be accomplished within the first 10 days after the dual signing of the SPA. This deposit will remain fully refundable during the Due Diligence period. During the Due Diligence period, your attorney will conduct a series of studies on the property including a title study, confirmation of taxes paid, confirmation of seller’s corporation being up to date, as well as additional studies related to the land survey. Additionally, a survey verification, home inspection and/or soil studies will be completed depending upon the type of property you are purchasing. There may also be additional studies which may be completed. These due diligence items are at the buyers expense.

Upon the completion of the Due Diligence your attorney will prepare a full report for your review. If there are items which need to be addressed, an addendum for extension of the DD period can be put into place. Once all items have been approved by you as the purchaser, the initial deposit will become non-refundable in escrow and the closing preparations will begin. In preparation for closing your attorney will open a Costa Rica corporation with you (the buyer) as the shareholder, the property asset will be transferred into this corporation at the time of closing.

A closing statement will be sent to both parties to finalize all payments to be made and disbursement instructions. Once the closing statement is signed by both parties, you as the buyer will deposit the remaining balance for the purchase into escrow. When the funds are confirmed to have been accredited in escrow, closing will be scheduled. At the closing, the transfer of deed document will be translated to you by your attorney. Both parties will sign the deed and disbursement instructions from escrow, and this will signal a successful closing!

You do not have to be in country for any of this process, as well a limited power of attorney can be put in place for closing if you cannot attend. It is important to keep in mind that this is the ideal structure for a purchasing process, there can be unique features to each property and other considerations which may alter certain factors of the process. For this reason, it is very important to have a reputable and trustworthy Costa Rican attorney, which we at Blue Zone Realty will support you in finding!

We at Blue Zone Realty take pride in supporting our clients through every step of the purchasing process, because we love seeing our clients dreams of property ownership come to fruition!

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