If you are planning to buy properties in Costa Rica, you must be properly informed of certain processes and regulations that you must comply with in order to own different types of properties. The information below will help you understand the buying process in this Central American country.

The first thing to do is understand the real estate market by zones, that is, the different areas that Costa Rica offers and the variability of prices according to them. If you already know enough about the country to make a decision about where you want to buy, great! If this is not the case, do not worry, we will clarify the general division of the areas of the country and the different benefits they represent.

City, beach or mountain? This is the first question you should ask yourself to proceed with your search to buy properties in Costa Rica. This country offers diversity of scenarios.

The country is divided into 7 provinces: San José, Alajuela, Cartago, Limón, Heredia, Guanacaste and Puntarenas. The coastal areas are Limón, Guanacaste and Puntarenas, so if you are looking to be near the sea you should focus on these three provinces. If you are interested in being closer to the city then San José will work for you, or if you want a combination of city and mountain, you can focus on the other three provinces. However, as we mentioned before, the diversity in this country is vast, so we recommend that you contact a real estate advisor so that they can guide you in more detail, according to your tastes and needs.

Below we show you the areas in which NATIVU represents properties

Taking the time to inspect any property of your interest is essential. Download our Buying Checklist to show you what to look for and help you make sure you’re not buying a property with serious problems.

Property inspections will help you determine certain conditions of purchase, how to fix certain details of the property or even negotiate a better price.

Unlike other countries, in Costa Rica foreigners have the same rights as nationals when they buy land in the country, since they can own property directly in their name or in the name of their corporation. Next in the video, Attorney Javier Sauma from COLBS Estudio Legal, explains in more detail how a foreigner can own property in Costa Rica.

1-Define if you want to buy a lot to build or a property with a house already built.

2- Choose the area of your preference, which suits your lifestyle, work, tastes, etc. Once the area has been selected, you can proceed to determine your purchasing power, that is, how much money you can invest or how much money you have to acquire the space that you will make yours. Once that budget is defined, which can be for bank financing, savings or both, then you can proceed to look for the property that meets the established characteristics.

3- In the case of lot purchase: Verify that the lot is in order, by requesting the cadastral plan, investigating if there is any encumbrance through a registry study and inquire about the land use of the lot to verify if what you want to build It has the endorsement of the municipality of the area. Also, it is recommended to request a soil study, to find out the type of soil on which it is going to be built and to analyze the security that the environment will have, for example if it will be inside a condominium and will have 24/7 security service.

4- In the case of house purchase: Request the cadastral plan, the construction plans and verify the electrical design and the system used for the water. It is also recommended to check the property for liens, make an extensive inquiry about the way the house was built and the warranty on the materials used.

5- Once the above points are clear, you can proceed to determine the form of financing that you will use for the purchase of the lot or house.

The three most common ways in which a buyer can finance a real estate purchase are the following:

Through a bank

It is the best known way and it is a process that generally takes one to two months, since the bank conducts a credit study and the individual’s ability to pay. Different types of documents are requested to prove your monthly income and your possibilities of paying against a debt: The terms range from 10 to 30 years with a real guarantee and the interest rate varies depending on the entity with which you decide to contract.

Financing by the property owner

The owner of the property finances the purchase directly, in general terms ranging from one year to 5 years are handled, and the rates and fees will depend on the negotiation in particular. This form works better for the parties and allows you to be financially creative.

Private loans

It is when a third party (personal or financial) finances the purchase. Generally, “lenders” use very high interest rates, which are around 12-20% per year, which is why they are generally used as bridging loans since the interest and principal payments turn out to be very high.

Who pays the transaction costs in a real estate sale? When making this type of investment, it is necessary to consider the payment of the taxes and legal costs of the transaction, for which both parties must be supportive. This is stipulated by the country’s Ministry of Finance, (Ministerio de Hacienda)

It is common for an agreement to be reached, considering the conditions of sale / purchase and the agreed price, where the buyer is the one who is responsible for the payment, especially when a benefit or discount has been offered. However, it is also possible that the total cost is divided between the parties involved.

What is the usual cost of legal services in a real estate transaction? It is important to note that the standard fees and minimum costs of legal services for a real estate transaction are stipulated and endorsed by the Costa Rican Bar Association. This is the starting point for the final cost that you can determine with your legal advisor.

According to the most recent decree, the cost for these services ranges between 1% and 1.25% of the total cost of the transaction. In the case of complementary acts, the cost would be 0.625%.

So, the final cost would be obtained by adding the following: 1.25% + 0.625% for a result of 1.88% on the total cost of the transaction.

Experience. A real estate agent has a lot of experience, which can bring you benefits not only for your pocket, but for making the right decision as well. These people are knowledgeable about the market and know how each stage of the process works, this is better for you as a buyer because they can make the market work for your benefit!

Support. With their negotiation techniques they could help you get a better price, or browse all the options to find the best for you without having to be very exhaustive, guide you to find what suits your budget without sacrificing comforts, among many more things.

Networks and connections. A counselor not only provides emotional support, but also provides resources. Real estate agents have contacts in the networks of the market and if you need a good lawyer for the legal process, or a builder to help you improve the house, they may have qualified people who can recommend you. In the case of Nativu, the company has legal backing and provides information from experts on the subject.

They facilitate the process. Documentation, papers, procedures, requests, offers, contracts … are just the beginning of everything that we do not want to take care of in the midst of everything that involves investing in a property. With the benefit of having the help of a real estate agent, you can take most of the weight off all of these things. Especially if they work with a real estate company as well, because that way they are more scope to help you.

If you have any further questions, please contact a NATIVU real estate agent or click here to return to the Costa Rica property buying guide home page.