Buying a Home in Costa Rica

Costa Rica is a beautiful country that attracts many expats with its tropical climate, friendly locals, and affordable cost of living. If you're considering making the move and buying a home in Costa Rica, there are several key factors you need to be aware of. This guide will walk you through the process, from finding houses for sale to understanding the legal requirements and potential pitfalls.

How Do I Find Houses for Sale in Costa Rica?

There are several ways to find houses for sale in Costa Rica. Online real estate portals are a good starting point, offering a wide range of properties across the country. Local newspapers and real estate agencies are also useful resources. It's advisable to visit the area you're interested in to get a feel for the community and to see properties in person. Working with a local real estate agent can also be beneficial as they have in-depth knowledge of the market and can help you navigate the buying process.

Are There Restrictions on Foreigners Owning Property in Costa Rica?

Costa Rica is relatively open to foreign property ownership. There are no major restrictions on foreigners buying property, and they enjoy the same rights as Costa Rican citizens. However, there are restrictions on properties located in maritime zones, which are typically within 200 meters of the ocean. In these zones, foreigners can only acquire property through a concession from the local municipality, and they must have been legal residents for at least five years. It's important to consult with a lawyer to ensure you're fully aware of any potential restrictions.

Does Costa Rica Have an MLS Type System?

Costa Rica does not have a centralized Multiple Listing Service (MLS) like in the United States. However, there are several independent MLS platforms run by real estate associations where you can search for properties. These platforms are not as comprehensive as a centralized MLS, so it's a good idea to work with a real estate agent who has access to multiple platforms.

Do Brokers Have Licenses and How Do I Know if They are Licensed?

Yes, real estate brokers in Costa Rica are required to be licensed by the Costa Rican Real Estate Brokers Board (CCCBR). To verify a broker's license, you can check with the CCCBR. It's important to work with a licensed broker to ensure that they adhere to professional standards and ethics.

What Documents are Required When Buying a Home?

When buying a home in Costa Rica, you'll need to provide a copy of your passport and a utility bill proving your current address. You'll also need a property title, which should be checked for any liens or encumbrances. The purchase agreement, or "Option to Purchase-Sale Agreement," outlines the terms of the sale and is signed by both parties. Finally, the property transfer deed is signed at closing and registered at the Public Registry.

Do I Need a Lawyer When Buying a Home in Costa Rica?

Yes, it's highly recommended to hire a lawyer when buying property in Costa Rica. A lawyer will conduct due diligence, verify the property title, prepare the purchase agreement, and handle the closing process. Legal fees typically range from 1.25% to 2.5% of the purchase price.

Do People Typically Buy a Property with All Cash or Take Out a Mortgage?

Many foreigners buying property in Costa Rica opt to pay in cash, as obtaining a mortgage can be challenging for non-residents. Costa Rican banks typically require a significant down payment and charge high interest rates for non-residents. Some buyers choose to finance the purchase in their home country or through a private lender.

Are There Inspections That Take Place, and If So What is That Process Like?

Yes, it's advisable to have a property inspection before buying a home in Costa Rica. The inspection will check for structural issues, electrical and plumbing systems, and potential pest problems. It's important to hire a reputable, independent inspector. The buyer typically pays for the inspection, which can cost between $300 and $500.

What are Some of the Pitfalls to Avoid When Buying Property in Costa Rica?

One common pitfall is not conducting thorough due diligence. It's crucial to verify the property title and check for any liens or encumbrances. Be wary of properties in maritime zones, as there are restrictions on foreign ownership. Always work with a licensed real estate broker and a reputable lawyer. Finally, be aware that property transactions in Costa Rica can take longer than in other countries, so patience is key.

Expats Talk about Real Estate in Costa Rica

"It is a good idea to rent before you buy. Talk to the neighbors. There are little pockets of problems that you could avoid by asking folks for their opinion. The neighbors may also know where there is a great house available that you missed in your search. Last piece of advice, get up and move," said one expat living in San Marcos, Tarrazú.

"Do lots of experiential travel and due diligence. It is easy to get rose colored glasses because Costa Rica is so beautiful and the people are so nice. Gringo's are viewed as wealthy and easy targets for getting taken advantage of, plus the legal system is a jungle as well. Do your work upfront, get lots of advice from others and reference everyone, even if you think they are honorable. If you want to enjoy Costa Rica, don't learn by trial and fire or it will taint your experience and enjoyment," wrote a member in Paquera.

"ESCAZU!!! Even our local Tico friends (who were all educated in the states) and have lived all over CR would agree. CR is booming right now, at least for professionals in law, medicine, computer science/network administration, & architecture/engineering. Our best friend here has to hire software engineers from India because CR workers are so expensive and doing so well here. This is just our opinion of course. For example, one of our son's opinions when he visits us in Escazu is disgust. He thinks why leave the states to just live in an expensive, English speaking, mini-California suburb. He leaves as quickly as he can to stay in the rural & beach areas (he luckily speaks fluent Spanish) to escape our lifestyle. He could never afford to live in Escazu as a musician/artist. Final note and a plug for Outlier Legal and the founder attorney Rafael Valverde who went to law school in the states. Do not make the move without reading his website articles at the very least & he and his team provided enormous support (and still do) in dealing with the puzzling and very unpredictable bureaucracy that is CR," commented one expat who made the move to Escazu.

"Very safe Condominium complexes are everywhere so you have many options that have surrounding walls and 24 hour security. Some have restaurants, pools and gyms. Many are furnished and I recommend reading the contract thoroughly. I also recommend taking a very detailed video showing condition of the unit including close ups of any damage to existing furnishings. Carefully read the fine print and if the furnishings are not adequate stipulate all changes in the contract before signing. If it's a long term lease consider hiring an attorney. It might be worth it," remarked one expat living in Santa Ana.

"Personally, I would advise people to rent for an extended time to make sure the area is what they need it to be, then purchase an existing home, where they can see it finished, the price won't suddenly escalate or leave them with a list of uncompleted tasks, that you will be responsible for," wrote one member in Costa Rica.

"Travel around and find the area you want first. Use tools like www.vrbo.com to see what the rental rates are in the area you are interested in -- and be sure to look at the calendars of availability to see how well they are booking. Visit the forums like Expat Exchange or Costa Rica Living and ask plenty of questions. Compare listings from a variety of sources and use tools like Google Translate to look at listings in Spanish as well. Seek the advice of folks like me -- make sure they have bought and sold for themselves and don't just have a good imagination," commented one expat living in Southern Pacific region of Costa Rica, Costa Rica.

"Don't buy. For some reason that I suspect is emotional expats almost always want to buy property, but it doesn't make a lot of sense. It's much easier and cheaper to rent. There's also the widely reported statistic that some half of the expats leave the country within the first year of arriving--and stories abound of those who bought homes taking a huge loss when they sell. There are also a fair number of problems with property theft--your house is sold out from under you without your awareness. Give yourself a few years in the country to become acquainted with the customs and the neighborhoods before you plunk down money you may regret," mentioned one expat living in Costa Rica.

"Know the neighborhoods and price ranges is key! Spend as much time as possible in your desired area or neighborhood. Go at night especially. Is the neighborhood safe, noisy, close to a nightclub? If you want to live in a condominium complex, observe the type of clientele it attracts in their rental pool. And in this case, find out how much turnover there is (daily, weekly, monthly) As Jaco is a tourist town, make sure your visit your desired neighborhood during "high season" and especially Easter and Christmas holidays as the busiest two weeks of the year," said an expat in Costa Rica.

"ONLY hire a commonly recommended Attorney Notary who has been recommended by a few Expats. DON'T take risks with any Attorney. DON'T take risks or trust ANYONE! Ensure the Attorney fully checks the property has ZERO issues with it (unless it has 1 or 2 that are negligible). Don't trust anyone with your money. Do your Due Diligence on the Realtor," remarked one expat in Costa Rica.

"The only restrictions on foreigners purchasing property in Costa Rica are in the Maritime zone within 200 meters of the ocean. This area is not for sale though you can get a concession to build things like tourism projects on a leasehold type basis. Expats typically can't get concessions although some grandfathered properties are still privately owned. Expats otherwise have the same rights to property ownership in Costa Rica as a Costa Rican would have. Property ownership is deeded and fee simple and over 95% of the entire country's properties are registered in a national property registry," commented one expat living in Southern Pacific region of Costa Rica, Costa Rica.

"No, foreigners can own property with the same rights as locals. However, I personally wouldn't buy until I had legal residency. Many nonresidents do buy and don't have any problems, but I'd personally want the right to live in the country before I invested money in it. Related is that absentee-ownership is asking for problems. Unless it's a condo at the beach with a rental program, I wouldn't recommend buying without living here, and I wouldn't count on living here without legal residency," mentioned one expat living in Costa Rica.

"Absolutely not. Foreigners can purchase property in Costa Rica. You do not need to be a citizen or resident. If you have the money, look and purchase to your content," said an expat in Costa Rica.

"No I don't think so. If any, I may presume it is if you haven't yet applied for Temporary Residency (Rentista) though I don't know if that's necessary; check with a reputable Attorney," remarked one expat in Costa Rica.

"There is no multiple listing service in Costa Rica, but it is emerging now. There are a number of US real estate companies that have licensed offices in Costa Rica, for example REMAX and Century21. The best way to find property is to use the internet, take tours, visit communities, talk to other expats, read the online English forums and beware," commented one expat living in Southern Pacific region of Costa Rica, Costa Rica.

"Many would advise going through a realtor and that's probably wisest if you don't know your way around. The native way to look though is to just walk the neighborhoods you're interested in and look for "for sale" signs. Related is to check grocery store bulletin boards. A lot of housing is still found in these traditional ways. Now the online site encuentra 24 is probably the best classified ad system and you're certain to see dozens if not 100s of listings that meet your search parameters by using it. It's like Craigslist but without the scams and a lot more people use it," mentioned one expat living in Costa Rica.

"There are many realtors in Jaco so finding a real estate agency is easy! I recommend Keller Williams. All realtors have listing pages on their business window so simply walking thru the city and looking at listings in this manner gives a buyer a good education on what your money will purchase. Another very attractive way to find property is thru real estate listings on Facebook. There are multiple sites offering seasonal and full time rentals along with homes for sale. Don't discount "Word of Mouth" either! Frequent any restaurant/bar that the expats gather and let it be known that you are looking! You will get many responses and in a city of 12,000 people the word travels quickly," said an expat in Costa Rica.