The Steps from Offer to Final Closing on a Costa Rican Property
Securing property in Costa Rica is remarkably straightforward. According to Costa Rican legislation, foreigners are granted equal rights to citizens, enabling them to own property outright with full titles, mirroring the systems in the USA or Canada. Most properties in Costa Rica boast full titles. The exception lies in certain beachfront properties termed “concession” property, functioning similarly to lease agreements. Various ownership methods are available, including personal names, Costa Rican corporations, trusts, foundations, self-directed IRAs, non-profit organizations, all easily facilitated by reputable Costa Rican law firms.
Unlike North American counterparts, our offers are very specific, typically spanning 3 or 4 pages, similar to term sheets rather than lengthy formal documents. The first page includes owner, seller, and property details alongside the purchase price. The subsequent page outlines due diligence, contingencies, closing dates, fees, and arbitration clauses, as well as items included or excluded in the sale. The final page is reserved for signatures. A scanned or a digital (Like DocuSign) offer holds legal weight in Costa Rica, negating the necessity for physical presence during signing.
Upon offer acceptance, a secure escrow account, registered with Costa Rica's banking authority (SUGEF), is established to safeguard all parties during closing. It's imperative to ensure a separate, secured, registered escrow for financial transactions, avoiding involvement of law firms or real estate companies.
To initiate an Escrow Account, around 10% deposit is typically placed as Good Faith, refundable during the due diligence period, lasting 14 to 30 days. During this phase, attorneys conduct thorough property checks, including full title searches in the National Registry, confirming absence of mortgages, liens, and taxes up to the closing date. Estimated acquisition costs are provided for clarity.
Throughout the due diligence period, buyers may opt for home inspections, surveys, or engineering work, with the option to cancel the contract without penalty. At the end of due diligence, assuming no issues arise, the deposit becomes non-refundable, applied towards the purchase price at closing.
Most Costa Rican closings occur within 30 to 45 days of the offer date. Prior to closing, the balance of the purchase price and closing costs (minus the deposit) are wired to the escrow account. The escrow ensures all parties are paid post-signing and document delivery to the National Registry. Additionally, $1,000 is typically retained from the seller for 30 days to cover any outstanding utility bills.
Following a successful closing, attorneys provide translated copies of all documents. Buyers and sellers need not be present; law firms can represent parties via Special Power of Attorney. Buyers must sign an affidavit affirming legitimate funds, ideally during closing, though arrangements can be made at Costa Rican consulates abroad.
Many buyers opt to celebrate post-closing, relishing ownership of their slice of paradise.
Welcome to the land of Pura Vida and congratulations on purchasing your new home!