can foreigners buy property in costa rica? Yes and Costa Rica makes it easy

As a foreigner, you found and fell in love with a property in Costa Rica, and now you want to know how hard will it be to close the deal! Costa Rica makes it easy for foreigners to buy property, however, the more you know upfront, the smoother the transaction will go. As you proceed with the purchase, it is crucial to acquaint yourself with the legal steps required to complete the ownership process successfully. We are here to provide an in-depth look at the journey that will lead you to transform this property into your piece of paradise.

In Costa Rica, property closings typically occur within 30 to 60 days from accepting your offer. To assist you in navigating through this process, we have outlined a step-by-step breakdown of what to expect during the real estate closing:

Step 1 - Preparation of Legal Contract

Upon the acceptance of your offer by the seller, your attorney will meticulously draft a legal contract detailing the terms and conditions of the purchase. The attorney's fee for preparing the contract generally ranges from $400 USD to $1,000 USD, depending on the property's price. Throughout the process, your buyer's agent will ensure you stay informed about the associated costs.

(For further insights on what is covered in the closing costs in Costa Rica, we invite you to read our blog on the subject.)

Step 2 - Escrow Account

Following the signing of the contract, a deposit is typically made with an escrow company registered with SUGEF in Costa Rica. Acting as a reliable third-party entity, the escrow company ensures the protection of all parties involved by handling the holding and distribution of all funds. Escrow fees usually fall within the range of $1,000 USD to $1,500 USD, with the deposit amounting to ten percent of the agreed-upon purchase price.

Step 3 - Due Diligence Period

The due diligence period, lasting approximately 14 to 30 days, allows you and the seller to get everything in order; and for your attorney to meticulously examine the property. This includes conducting a comprehensive title search at the National Registry to confirm the absence of mortgages, liens, or annotations on the property. Your attorney will also verify tax payments, confirm the property's legal compliance, and assess any outstanding obligations such as homeowner fees and utility contracts. During this phase, your buyer's agent will be at your side to help arrange necessary inspections, surveys, or engineering work. Should any concerns arise during due diligence, you have the option to cancel the contract and receive a refund of your deposit.

Step 4 - Home Inspection

If you have included a home inspection as part of the qualifying terms of purchase in the contract, this step will be done during the due diligence period. Some buyers wish to do this step before writing an offer to be save the time of sending (and receiving) deposit money through an escrow service.

While Costa Rica may not have certified home inspectors, competent professionals with ample building experience can perform visual inspections and assess essential systems. Sellers are typically requested to address significant structural defects, septic drainage issues, or roof problems. However, it's important to note that minor repairs or cosmetic issues are usually not negotiable. The cost of a home inspection can range from $300 USD to $1,000 USD, depending on the property's size and structure.

Step 5 - Closing Day

In the days leading up to the closing date, the remaining balance of the purchase price and all closing costs, excluding the deposit, are transferred to the escrow account. The third-party escrow company's role is to ensure that all parties receive their respective payments upon the successful completion of the closing process. It’s imperative to be sure you have previously discussed what documents each bank involved and the escrow company will need in order to transfer any sum of money over $10,000 USD in Costa Rica.

Step 6 - Signing Property Documents

On the closing day, you will sign the property documents, and your attorney will submit them to the National Registry. Some escrow companies may withhold $1,000 USD from the seller for a 30-day period to cover any outstanding property bills.

Step 7 - Translation of Closing Documents

To ease understanding, ask your attorney if they will provide a translated version of all the closing documents, including the deeds. These documents contain technical language and serve as the final confirmation of ownership when presented to the National Registry. Typically you will receive your copies in translation in the coming weeks.

Step 8 - Physical Presence at Closing

While it is not mandatory for the buyer and seller to be physically present at the closing, you may choose to celebrate your new ownership by attending the event. Alternatively, your attorney or another designated person can act on your behalf through a power of attorney. This convenient option not only saves you from an unnecessary trip but also saves time and money.

Congratulations once again! As a foreigner, you just bought property in Costa Rica.

We sincerely hope you embrace the Pura Vida lifestyle, enjoy your new property, and swiftly settle into our vibrant community. Beyond real estate, our commitment is to extend a warm welcome and continued support by connecting you with our network of trusted professionals. Be sure to read our blog on how a savvy buyer's agent can save you time, energy, and money in Costa Rica.