As part of our Frequently Asked Questions series of blog posts, we are setting out below a summary of the steps that you would expect to follow in a typical property purchase in Costa Rica and in Santa Teresa. We would be more than happy to go through the information in more detail via telephone or email - please don't hesitate to contact us with questions!
Purchasing Property in Santa Teresa:
(1). The very first step is to find a realtor that you like, who is both knowledgeable of the local market and ready to support you in all aspects of finding the perfect property for you. By law, all real estate agents in the country must be registered with the SUGEF, which is the Costa Rican banking regulator and the CCBR (Cotsa Rican Chamber or Real Estate). Your realtor will want to sit down with you and talk (either face to face or via telephone/Zoom), and find out your goals, your criteria, your timeline and your budget. Armed with this information, the property search will begin.
Your realtor will be actively searching for properties that fit your wants and needs, but you will also find our website an invaluable tool when searching for properties. As a registered user with your own account, you can set up your own Saved Searches (which will send you an update when properties that fit your criteria come on to the market or change in price), you can save your favorite properties or share these with friends/family and you can make notes on your account against certain properties that will help you keep track of what you have viewed and what you liked/disliked about the property in question. If you need help in navigating how our website works, please do not hesitate to reach out to us!
(2). Once you find the perfect property, you would make an offer. At our office we write up a Letter of Intent (LOI) that includes the offer price and conditions of sale, which you sign. We send this on to the Seller and discuss the offer in detail with him/her. Once the terms of the offer have been agreed by both the Buyer and the Seller, the Letter of Intent is signed by both parties. Having the agreed offer in writing ensures that everyone is on the same page from the outset. The property is ofcicially under contract.
(3). Once the Letter of Intent has been signed, we would have a few days to draft and agree on the details of the Sales & Purchase Agreement (SPA), which is reviewed and agreed by both parties and their legal teams. Once the SPA is signed, Escrow is opened by the Buyer and a 10% deposit is sent.
(4). Due Diligence - the due diligence period is usually between 20- 45 days from the signing of the SPA. If the property is a business or complex listing this period might be longer but under the current market conditions most sellers will not accept extended due diligence periods. The due diligence would include house inspection (if applicable), survey of the lot and border (including check of neighbor’s borders and any overlaps), legal due diligence performed by the lawyers and anything else that you want to have checked (well documentation, soil test, etc). The costs of the due diligence are borne by the Buyer. The due diligence period can be as short as 10 or 15 days if both parties want a quick closing. The standard practise is that the 10% deposit is refundable during the due diligence period, allowing the Buyer the time to really look in to every aspect of the property.
(5). Once the due diligence period is ended and the results come back positive, the 10% deposit becomes non-refundable. If the due diligence is negative, the deposit is refunded to the Buyer.
(6). Closing - once the Buyer has declared positive due diligence results, we would move on to Closing. The Buyer will send the remaining 90% of the purchase price to Escrow, in preparation for closing. The Buyer's lawyer is responsible for drafting the Title Transfer Deed. On the day of Closing, the Title Transfer Deed is signed by both parties (or their legal power of attorney) and the Escrow Agent sends the funds to the Seller. At this point the Buyer's lawyer will register the Title Transfer Deed with the National Registry. It will take about 2 weeks for the new ownership to appear in the National Registry, which is fully accessible by the public.
This is just a very brief overview of a standard purchase here in Costa Rica. As mentioned above, if you would like to discuss the process in more detail please do not hesitate to contact us!
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