Neglecting the condition of title
After a lengthy search, you have found the perfect property. The only remaining step is to make sure that the seller has clear title. However, some people are eager to close the deal and do not consult with a lawyer before signing anything. This can be a mistake! In addition to checking for liens, mortgages and judgments against the property, your lawyer should also check into the seller’s legal status.
For example, does he or she have capacity (legal competence) to sell you this property? Is it even possible for someone to own land in Costa Rica as an individual? Has this particular piece of land been inspected by an authorized engineer? Has everything been approved by the local municipality? If there is any ambiguity about what can or cannot be built on this property at all, your lawyer should check with local authorities and get answers. You will want those answers in writing before closing because they could affect your plans for use of the land. Have you signed anything yet? Congratulations! Let’s move on to number 3…
Buying land with a construction, or sitio
If you’re not planning to visit your property regularly and are considering hiring a property manager, keep in mind that this adds another layer of expenses. Similarly, if you want your home to be cleaned after each of your visits and you’re planning to use a maid service, add this into your monthly budget.
Bottom line: When managing the costs of owning property in Costa Rica, remember that they never stop coming. Do whatever research necessary to make sure you can afford them!
Neglecting the purchase contract
The first and most important step you should take before buying Costa Rica homes for sale is to secure a legally binding purchase contract. A good contract will not only protect you from fraud and other potential issues, but it will also protect your rights as the buyer. A purchase contract should include basic information like the price of the property, terms of payment, closing date and details about the property itself (including any easements).
When you have secured your contract, make sure that you are dealing with people who are licensed to sell real estate. This is easy enough to check by asking them for their license number. It’s also a good idea to get in touch with a local lawyer or even an attorney from your home country, who can help interpret your contract and give advice on what needs to be done next for the transaction to go smoothly. Before making payments toward your property purchase, be sure that all taxes have been paid up-to-date and that any building permits are in order. In short, having all legal documents squared away can save you major stress later on down the road.
Being under-financed
When we decided to move to Costa Rica, we realized that we needed a lot more money than we had at the time. By moving here, we would be spending a year living on the beach (which is pretty cool), but also it meant that there was no guarantee of returning home at the end of our stay. We were two people with very low incomes who were starting our new lives in a foreign country.
We knew that renting property or even salvaging furniture from your old house wasn’t going to work for us because of our limited budgets so finding a property was key for this next phase of life. We looked for months and even went as far as to look up properties listed locally on Craigslist and decided against it after reading all sorts of horror stories about abandoned properties and security companies that didn’t return calls. We would have ended up paying a few thousand dollars just to sit on the property while waiting for a security company that never showed up.
We did eventually find an ad in Spanish by someone who claimed they could help us buy house in Costa Rica but when I finally got around to asking him how much he needed, his response was less than what I thought it should be since I had read other posts where people said they paid anywhere from $10-20k for plots without telling them exactly how much they need in advance.
After looking again online, we came across this site which told us exactly how much each plot cost and how much it will cost per square meter with tax included:
Then after some research, I found out that the tax will be added onto your purchase price so even if you pay $500 per square meter, you’ll still end up paying about $7000-$9000 before anything else like rent or bills are taken off your actual purchase price
Be sure to do your research before buying property in Costa Rica.
Buying property in Costa Rica can be a great opportunity for those looking for more of an adventure, but you need to make sure that you do your research first. There are some major problems that can arise when you buy unimproved land that is not yet set up for building. To avoid these potential issues and ensure that you are purchasing the ideal plot, here are 5 tips on how to conduct your research before buying a piece of property in Costa Rica:
- Research the land records and deeds. You should make sure that the person selling the plot is actually allowed to sell it legally.
- Do a soil check. The plot should be level enough to build upon and have good drainage capabilities.
- Look at surrounding plots and development plans. The surrounding plots may have a negative impact on your own land if they will block any views or water access points or if they will cause noise pollution with commercial developments nearby.
- Research possible financing options beforehand, including loans from banks or private lenders; otherwise, you might not be able to afford the property if there aren’t financing options available at the time of purchase.
- Get legal advice from an attorney who is well versed in real estate law and has experience with Costa Rican law so that he/she can help guide you through the process safely