HOW TO BUY
COSTA RICA REAL ESTATE
Learning how to buy Costa Rica real estate is a multi-faceted subject. First you should give some thought as to what type to buy and where to buy your property. Further down this page you will also learn some of the pitfalls regarding attorneys and real estate agents and so on, so read on.
Buying Costa Rica real estate is not as easy as buying it in the United States, especially if you know little or nothing about how buying property is done in Costa Rica of if you have not spent a lot of time in Costa Rica. It isn’t hard but you have to learn the pitfalls and how to avoid them.
First you will want to learn all you can about the various areas of Costa Rica and make some basic decisions:
- Do you want to live on the West coast or the Caribbean side?
- Do you want to live at or near the beach or in the mountains?
- Do you want to live in a city or town or in the country?
To determine this you should start by reading some books and web sites about the various areas of Costa Rica and how they differ from each other.
You will learn, for example, that the Golfo Dulce area in the south is very rainy and humid, while the Guanacaste area on the north west coast is much drier. But the Guanacaste area is much more developed and more expensive – and too dry for some, while the Golfo Dulce area is lower priced and less populated, andtoo wet for some. The Central Valley is more moderate in climate and rainfall but it still can get quite hot and wet.
You should know that buying Costa Rica real estate right on the beach can be fraught with many land mines or potential pitfalls having to do with rules of ownership, while buying in the mountains generally is much less troublesome in this respect.
You need to know that elevation has a lot to do with the temperature of your environment. If you live at 5000 feet it will often be cold – yes! it does get cold in Costa Rica at 5000 feet! Not “snow cold” but certainly jacket weather! – whereas if you live at sea level you will be living in an extremely humid and hot environment. For many, the answer lies somewhere in between these extremes.
You can find the temperature you want by choosing the elevation of your home carefully.
There are also rainfall and sunshine maps that show which areas have the most rainfall and least rainfall, or most and least sunshine, depending on the various regions of Costa Rica.
So these are all factors you will want to study and then choose one to three areas to focus your search on. (See the FAQ and Resources pages here on this site to help you learn many more things about Costa Rica.) Reading pages like these on the internet and in travel books is very important and can also be a lot of fun as you discover the terrain and climate of Costa Rica.
One thing I always recommend is that if you are going to be buying Costa Rica real estate, you should buy and carry an altimeter with you, to check the elevation at each property you look at, and record it in a notebook in which you keep notes on each property. By noting the altitude you will have a very good idea of what kind of climate and temperature your property will have.
For example, let’s take San Ramon, here where Rancho Silencio is located: If you live north of town out on the road towards Arenal Volcano, the altitude there is around 4000 to 5000 feet – 1000 feet higher than at Rancho Silencio. That means more cold days in the rainy season and more cold nights in general. Then, if you head out west of San Ramon towards the ocean, soon you will be down around 1000-1500 feet altitude and you will find much muggier, hotter weather.
Of course, I am biased, but I have found the altitude of Rancho Silencio – at 2800 feet – to be nearly perfect. You will have warm days – hot but not extremely hot in the dry season – and cool nights year round, but not so cold you will need a winter coat, or heater/fireplace in your home at night.
One place we stayed near San Ramon, at 5000 feet, was so cold we felt like we had boarded the wrong plane and ended up in the Eastern United States in the winter!
Use the rainfall and sunshine maps linked above and on my FAQ page, to get a general idea of the climate in your area. But don’t go by that, alone. Use it as a general guide, then realize that an altitude of 0-1000 feet can be very muggy and hot, 1000-2000 feet will be slightly better, 2000-3000 feet will be moderate (what we have here at Rancho Silencio, and what I call nearly “perfect”), and 3000-4000 feet gets a little colder at night, and 4000-5000 feet and above can get quite cold at night (too cold, as far as I”m concerned)!
Also note that things like prevailing winds, where you are situated on a mountain side, and the direction of storms can also affect the comfort of the climate on your property. Ask the neighbors about the climate: Are high winds common? How often? Does it get cold enough to require a thick blanket or a fireplace at night? Is there any flooding on the property or along the road to get to it? Do you have to have a fire or heater on cold nights? Is it uncomfortably hot to try to sleep at night, sometimes?
CHECKING THE COSTA RICA REAL ESTATE MARKET
TO DETERMINE FAIR PRICES
There are two schools of thought on this:
1) LOOKING FOR THE RIGHT COSTA RICA PROPERTY FROM WITHIN COSTA RICA
Many say that you have to be physically present in Costa Rica to find the best deals in real estate and get the best prices. This is more or less true (though less true than it once was). If you are retired and can afford to spend months living in Costa Rica, and if you speak good Spanish or can find someone to travel around with you to represent you and ask about properties, this is a good way to find properties that are unlisted and you may find a property at a better price this way.
Of course, you will also spend hours upon hours, days upon days, running on wild goose chases up mountainous muddy roads leading to dead ends and wasted time. You will find Ticos who say they know someone who has exactly what you are looking for – which you have carefully described to them – only to spend 3 hours getting there only to see that it is clearly nothing like what you asked about. This approach will certainly require time and patience.
On the other hand, if you keep at this game long enough, and if you have some luck on your side you might find a really great deal this way.
Another pitfall of this method is that you may find the property you want, and having been told the price by the Tico owner, you prepare to buy it, only to have the Tico change his mind and start raising the price the next time he sees you, now that he knows you want it. This happens quite often and may be one of your first lessons that things are done differently than what you are used to in Europe or North America. Welcome to “Ticolandia”!
So while you may find a great deal on a property by going to Costa Rica to live several months or a year, make friends, and drive all over asking about properties, be prepared to spend a lot of time “spinning your wheels” bothliterally (in the muddy back roads) and figuratively as you conduct this type of search for Costa Rican real estate.
2) CONDUCTING COSTA RICA REAL ESTATE SEARCHES BY INTERNET
The fact is that you can conduct your search at home on the internet and learn a lot about the going prices in the various areas of Costa Rica. Granted, you will generally be dealing with Americans or Europeans who will be asking for prices at or near the top end of the spectrum for the land they are representing. But in return you will be dealing with people who:
-do things more the way you are accustomed to doing them
-often have a reputation that you can check with others who know them or have dealt with them
As you compare dozens of real estate web sites you will begin to see an average cost for buying Costa RIca property in certain areas. There is always room to negotiate downwards from there, but you will get an idea of what the prices are and how they differ from area to area. You will see that areas near the beach are generally much higher than inland areas, that ocean views are higher priced than mountain or valley views, and that areas that are less developed are cheaper than areas that have attracted a lot of gringos and have better infrastructure.
All this can be done by googling and this is how most people do their search for Costa Rica property, simply because not too many people can afford to go live in Costa Rica for weeks or months at a time to do their searches, and few have the patience to run all over Costa Rica in a 4-wheel drive, on pot-holed roads with no clear signs or road maps, looking for “the perfect property at a bargain basement price”.
I have done both methods and in the end I found the information I needed via the internet, met with the sellers who had nothing I liked, and then – at the last minute – suddenly they had a new property just listed that I fell in love with and bought immediately at a fair price.
So while some will say “you are foolish to search for property on the internet”, I strongly disagree with this and am proof that it can be done successfully.
Here’s how I did my search for buying real estate in Costa Rica:
1) I used google and yahoo to find several Costa Rica real estate sites where property was being sold by Americans, Europeans and Ticos who represented properties in the 3 areas I was interested in.
2) I spent months watching these sites and choosing 2-6 properties that I was interested in, from each site. I looked at properties that had elements I was looking for: nice views, off the main roads, mountain or ocean views, streams and rivers near by, quiet areas not too close to other properties, and within my budget.
3) After I found 10 or so properties I was very interested in, I wrote or called each of the “realtors” and asked for more photos, asked more specific questions, and so on.
4) Once I was convinced I would like at least one of these properties, I asked each of the realtors if they would be available to show me these specific properties on a particular day the following month. I knew that I would probably only be able to see 4-5 properties a day, so I scheduled with that in mind. Sometimes – particularly if you are looking in areas that are “out in the boonies”, you might only be able to see 2 or 3 properties in a day. Or, if they are all around a particular area, you may be able to see 5-6 in a day. So I would ask, Realtor A, for example, If he or she could show me properties 1, 2 and 3 on Mon of that week, then I asked Realtor B if he could show me properties 4, 5 and 6 on Tue, and then asked Realtor C if he could show me properties 7 through 10 on Wed. I got a “yes” from all of the realtors I was interested in having show me properties, then I confirmed with them and made my flight reservations. I left 2 more days at the end “open” so I could look at one or two properties a 2nd time, if necessary, and so I could schedule a meeting with their and my attorneys on the final day to set up an Option To Buy contract if I made a decision to buy.
I ended up making 3 such trips to Costa RIca over a period of 2 years, before I ended up finding Rancho Silencio. I have heard reports of buyers who made only one trip and found the property they ended up buying. I am guessing I may have been a little more “picky” than many people! ;-D
But here is my #1 piece of advice about buying property in Costa Rica:
NEVER BUY A COSTA RICA PROPERTY WITHOUT HAVING LIVED IN COSTA RICA AWHILE FIRST!
One of the cardinal rules of buying property in Costa Rica is that you must spend some time there before you make the plunge. You may have bought into the hype that Costa Rica is a Paradise, a Garden Of Eden, Heaven on Earth, and now you want to buy there as soon as possible. You may have spent 5 days there on vacation and fell in love with it. Many do.
But living there is another matter. At the very least you should spend a few weeks there exploring while thinking in terms of living there.
So your first step is to actually take an extended “vacation” there, not traveling around like a tourist, but actually setting up a household and living there, renting a house or cottage or cabin and finding out what it’s like to buy groceries, find shoelaces or other odd little things that you happen to need, open a bank account, wait in line at the pharmacy, drive on pot-holed and muddy roads, and so on.
Not everyone can get used to the Ticos’ (Costa Ricans) different ways of doing things: the “mañana” attitude that is common, the seemingly senseless ways certain things are done, stores being closed without reason or warning, appointments not kept, buildings not having addresses, and so on. If you are a Type A person who is very organized and efficient and insists on things being done right the first time, and in a timely manner… Costa Rica may not be for you! So you have to live there for awhile first, before you decide to live there!
One of the key things you must learn is to take things in stride and not expect things to get done as well, as efficiently, or as sensibly as you are used to in your country. If you can’t do that, you may not like living in Costa Rica.
Also, certain areas are more “that way” than other areas. Living in a rural beach area is generally a lot more lax than living in, say, San Jose’ or the Central Valley. That is why it is imperative that you figure out where you want to live and actually live there for at least a few weeks – longer if at all possible – before you buy there. Ideally, you should live in Costa Rica for at least 3 months, in my opinion, before taking the huge step of buying real estate there and moving there.
LET’S TALK ABOUT “REAL ESTATE AGENTS“:
There are no Costa-Rica licensed real estate agents in Costa Rica. Anyone can call themselves a real estate agent, and often that is exactly what they do.
If you locate a Tico who has a property he wants to sell – and if you talk to 10 Ticos a day I can bet you at least 2 will have property he wants to sell – then you can call yourself a “real estate agent” and put up a web site and try to sell that property for them.
If you are less than respectable you may decide to ask 30-40% more than what the Tico is asking for the property, and take that as your “commission”. Believe me: this happens. I’ve seen it. In fact, in one case I heard about, 300% commission was charged. Many real estate agents in Costa Rica are no more than someone who is able to speak Spanish, gain the trust of Ticos (deserved or not), and sell their property for them because they can reach the gringo clients and speak English. Since there are no laws regarding real estate agents in Costa Rica, one has to be very careful and check out the land one is buying closely. Whether or not the seller is a “real” real estate agent, or whether or not he is selling the land with a large commission ultimately does not matter that much to you, though:
What matters is that you:
– are sure the land has a clear title
– are sure the land has access by public road and/or by private driveway
– are sure the land has utilities or can get them
– are sure the land is comparable in price to similar real estate in that area (or cheaper!) (But if it’s too much cheaper, be wary, it could be a scam or have title problems!)
So if you do your homework on the land and your trustworthy and diligent attorney checks the title and everything carefully for you, then you can buy the land from any snake in the grass. If you’re like me you prefer not to buy from such people, but the bottom line is it can be done, as long as you cover your bases. If the land has all the features you need, as above, and has clear title and a good price, you can safely buy it. If you want the land badly enough, you can have it all checked out by your attorney, do your due diligence re utilities and so on, and still buy it, even from an unreliable seller or a seller who you are not sure is reliable.
So the best advice is to assume that every real estate agent is – let’s say “less than fully trustworthy”. II know they hate to hear that because there are many good honest people selling real estate in Costa Rica. I know some who are honest and respectable, and I myself am one who is honest and respectable. But the fact is, you just don’t know, so if you don’t know much about mushrooms, for example, it’s best to just assume they’re all poisonous until you get an expert opinion. So it’s not that all real estate agents are dishonest, it is that you do not KNOW if a particular one is or not, so you have to be very careful.
That’s why you need a very good attorney (See: HOW TO CHOOSE A COSTA RICA ATTORNEY)
If your “real estate agent” says the property you want to buy has electricity, make him show you the power box and look to see that the cable is indeed going to your property. Look at the cables. Do they look “up to code”? Or did someone just bring the lines in themselves off the main line? Ask about this. If so, it could mean funky electricity and no support from I.C.E. (pronounced “ee-say”), the electric company. The same is true with water. It may be turned off, but you should be able to see the valve and see where the piping goes as it comes to your property. Check with ICE and AYA (the water company). (Note that some rural areas do not get service from AYA. In this case, they may get their land from a well or from a spring, or from a rural cooperative. Ask for proof of utilities. Go to ICE and AYA yourself and check it out. It may take a while to sit there and wait but that way you can be sure. You will need a copy of the survey map showing exactly where the property is in order to find out.
Also check the availability of water with neighbors. Even if you have water going to your property, there are a few places in Costa Rica where they are not getting enough water for everyone and you probably wouldn’t want to buy in such an area. If you don’t speak Spanish, find someone who does to ask about these things. Do not take the realtor’s word for it! CHECK THINGS OUT FOR YOURSELF!
The seller or realtor may exaggerate the boundaries to make the property seem bigger than it is. (Again, many are trustworthy and would never do this. But just double-check things yourself, to make sure!) If you are very serious about the property, you may even want to pay a surveyor $100-$300 or so to come out and walk the land with you based on the property map the realtor has (he DOES have the official legal property map doesn’t he?), to make sure the boundaries are where the “realtor” said they were. What you are buying is what’s on the official legal property map, not what the “realtor” pointed out to you, so make sure where your boundaries really are! If there is no fence at the boundary, you need to find out why. Almost always the owners will have fences at the property lines!
Also, if your land or home has a driveway and is not directly accessible via the main road, check very closely to insure that you DO have the rights to cross the land via a driveway to get to your house or land. It’s called a servidumbre (sair-vee-doom-bray) and you must have rights to it with the property or you could be prevented from getting to it! These are things your attorney should automatically check for you. But by knowing about them you can ask and make SURE he checks these things! Ask him to show you where it says you have the “derecho” or right to use that driveway if there is one! Usually it will be marked as a servidumbre on the property map.
I apologize to the honest realtors. I know it hurts to be thought of as dishonest when you are not, because of a few bad apples who are. But it’s like anyone else you just met. Do you invite some guy off the street into your house to stay the night? No. You have to get to know him. He has to earn your trust. It’s the same way with realtors or anyone else. You cannot trust them until you are sure you can trust them. They have to earn your trust. One way is for you to ask around about them, get character references, see if they have good honest friends in Costa Rica, etc.. That said, on the other hand, do not believe everything anyone says about another realtor or developer. Some realtors or developers are “cut throat” types who will lie about others to keep you from buying from them! So take the info with a grain of salt. Just gather info and in the end, weigh it and see how it comes out. The bottom line is this: Do your due diligence in choosing a property and in choosing a realtor and attorney.
The next section is one you must read, as it contains the #1 most important rule about buying real estate in Costa Rica:
Please continue here: HOW TO CHOOSE AN ATTORNEY.
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