BUYERS GUIDE

A Comprehensive Guide for cOSTA rICA Homebuyers

Purchasing a home in Costa Rica is a thrilling milestone, and being prepared for the process can make it even more enjoyable. This step-by-step guide, crafted by us, is designed to ease the stress of home buying, helping you navigate each stage with confidence and fully savor the experience.

Step 1

DEFINE YOUR BUDGET & GOALS

Determine your investment capacity: Real estate prices in Costa Rica vary widely based on location, property size, and proximity to tourist areas or cities. Establish a realistic budget that considers not only the purchase price but also additional costs like closing fees, maintenance, and property taxes.

Identify your purpose:
Vacation home: Are you looking for a place to relax a few times a year, with the potential to rent it out when you're not there?
Rental investment: Costa Rica’s tourism market is booming, making it an ideal place to purchase a property that generates short-term rental income, especially in beach areas or popular tourist destinations.
Retirement: Many buyers purchase with the long-term goal of retiring in Costa Rica, enjoying a lower cost of living and a laid-back lifestyle.

Consider long-term financial planning: If you intend to generate rental income, calculate how this will contribute to the property’s mortgage (if applicable), maintenance, and future upgrades. Additionally, Costa Rican properties may appreciate over time, depending on the location and development plans in the region.

Step 2

RESEARCH PRIME LOCATIONS IN COSTA RICA

Costa Rica offers a wide variety of landscapes and climates, so it’s essential to choose a location that fits your lifestyle and goals:

Guanacaste (Northwest): Known for its dry tropical climate, beautiful beaches, and upscale communities like Tamarindo and Playa Flamingo, Guanacaste is popular with expats and investors seeking vacation homes or rental properties. It’s also well-served by Liberia International Airport.

Central Valley: The Central Valley, home to the capital San José, offers a mild climate, excellent healthcare, and a mix of urban and rural living. Areas like Escazú and Santa Ana are popular with expats and locals seeking proximity to urban conveniences but in a quieter, upscale environment.

Manuel Antonio/Quepos: Famous for its national park, Manuel Antonio is a mix of rainforests and beaches. It attracts eco-tourists and those who want properties near both nature and luxury amenities.

Southern Zone: Regions like Dominical and Ojochal in the southern Pacific area are lush and less developed but are gaining popularity for their pristine beaches and tranquil surroundings.

Nicoya Peninsula: Areas like Santa Teresa and Nosara attract surf enthusiasts and those looking for laid-back beach communities. The region is becoming more popular with digital nomads and wellness retreats.

Consider proximity to key amenities:

Access to medical facilities, airports, schools, and shopping can vary depending on where you choose to live. For vacation properties or rentals, proximity to popular tourist destinations and attractions can greatly impact rental income potential.

Step 3

UNDERSTAND THE LAW

Costa Rican real estate law is generally friendly to foreign buyers, but there are important details to understand:

Equal rights for foreigners: Foreigners can purchase property in Costa Rica with the same rights as citizens, and property ownership can be held outright in your name.
Maritime Zone Law: Properties near the coast (within 200 meters of the high tide line) are subject to a special regulation called the Maritime Zone Law. The first 50 meters from the high tide line is public land, while the next 150 meters may be concession land, which involves leasing from the government instead of owning outright. Verify the title carefully if purchasing near the beach.
Title verification: Not all properties in Costa Rica have a clear title, especially in rural or coastal areas. Work with a lawyer to confirm that the property has a legitimate title, is properly registered, and is free of liens, disputes, or other encumbrances.

Step 4

VISIT THE PROPERTY OR ARRANGE A VIRTUAL TOUR

In-person visit: If you’re able, visiting Costa Rica to tour properties is ideal. Spend time in the neighborhood, talk to locals, and experience the area during different times of the day. This will give you a sense of safety, noise levels, and accessibility.

Virtual tour: If traveling to Costa Rica isn’t an option, many real estate agents and sellers now offer virtual tours. These allow you to walk through the property digitally and ask questions in real-time. For buyers not familiar with Costa Rican construction norms, a local inspector or trusted contact can also provide a physical assessment.

Step 5

MAKE AN OFFER

Negotiation: Once you’ve found your dream property, it’s time to make an offer. In Costa Rica, property values can often be negotiable. We will help you determine an appropriate offer based on market conditions and comparable properties.

Offer contingencies: Include conditions in your offer to protect yourself, such as:

Due diligence period: Time to verify the title with your lawyer and conduct inspections.
Financing contingency: If you’re applying for a loan, include a clause allowing you to withdraw if financing falls through.
Property inspection: Ensure you have time to conduct a thorough inspection for any structural, electrical, or water-related issues.

Step 6

hire a real estate lawyer

Essential for the process: A qualified Costa Rican lawyer (notary) is required to handle the legal process. They will:

Title search: Conduct a detailed title search to confirm the ownership history and that the title is free and clear.
Due diligence: Verify zoning, property boundaries, and ensure there are no outstanding taxes, liens, or debts on the property.
Draft contracts: Prepare all necessary legal documents and contracts for the transaction.
Avoiding risks: Working without a lawyer can expose you to potential risks, especially regarding unclear property titles, which can lead to future disputes or loss of investment.

Step 7

SECURE FINANCING

Cash transactions: Many real estate transactions in Costa Rica are completed in cash, but financing options are available through local banks or using home equity from properties in your home country.

Local mortgage options: If you prefer to finance locally, Costa Rican banks do offer mortgages to foreign buyers, though interest rates may be higher than what you’re used to in North America or Europe. Expect to put down at least 40-50% for a mortgage.

International financing: Alternatively, you can leverage existing assets in your home country, such as a home equity loan, to finance your Costa Rican purchase.

Step 8

FINALIZE THE AGREEMENT

Cash transactions: Many real estate transactions in Costa Rica are completed in cash, but financing options are available through local banks or using home equity from properties in your home country.

Local mortgage options: If you prefer to finance locally, Costa Rican banks do offer mortgages to foreign buyers, though interest rates may be higher than what you’re used to in North America or Europe. Expect to put down at least 40-50% for a mortgage.

International financing: Alternatively, you can leverage existing assets in your home country, such as a home equity loan, to finance your Costa Rican purchase.

Congratulations!

After signing the final paperwork to complete the purchase, you are now the owner of a new house. It may take a few days for your loan to be funded once the paperwork has been returned to the lender, but once that check is delivered to the seller, you’ll be all set to move into the home of your dreams.

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