1.REAL ESTATE AGENT FROM OUR COMPANY.
Having an experienced Real Estate Agent to Represent you is one of the most important things when deciding to buy a property. The agent is here to advise you and help you and guide you through the purchasing process. Read more information about the importance of the Real Estate Agent in our BLOG section.
- MAKING AN OFFER
Submitting a written offer to the seller is the first step to get your dream property. A written offer tells the seller that you are a serious buyer and he or she will take in consideration the offering price and your intentions. The offer will include normal due diligence items, for example: title search, making sure all employees are liquidated if any, verification of the property lines, home inspection, furniture inventory, professional engineering studies, corporation taxes paid and property taxes are up to date until the day of closing, copies of utilities receipts, etc.
Once an agreement of the Purchase Price is finalized then your Real Estate Agent sends that Offer to the Buyers Attorney for him or her to draft a Sales and Purchase Agreement which is a legal binding document and must be done by an Attorney Notary Licensed in Costa Rica. That “offer” negotiated between seller and buyer provides a proper outline and structure for the Attorney to follow to draft the SPA.
Once both parties signed the Sale and Purchase Agreement (SPA) to secure the property officially and legally with the agreed upon price, terms, and conditions it is time to set up your Escrow account.
The Costa Rican Government needs to verify the source of the funds you are using in order to buy a property in Costa Rica. The Attorney or the Real Estate Agent will put you in contact with an Escrow Company.
The Escrow Company acts as a neutral party to hold deposits as well as closing funds until closing contracts are finalized and signed by both buyer and seller so title transfer can be executed. If the sell does not go through the deposit goes back to the buyer before competition of the due diligence period.
3.TRANSFER OF THE TITLE
A Public Notary acts on behalf of the state and is the one in charge of the closing. It takes about one or two weeks for our National Registry to record a property after closing.
4.CLOSING COSTS
Buyer normally pays all closing costs like government taxes, notary fees, mortgage costs, etc.
It is a about 1.5% Transfer Tax (Impuesto de Traspaso) based on the registered value of the property plus other taxes/registration stamps that need to be paid to the government it ranges between 0.7% and 0.8%, also based on the registered value of the property.
Closing costs are between 4.25% and 4.5% of the purchase price.
The notary that drafted the contract for sale and carried out the closing on the property transfer is entitled to a Statutory Fee. In accordance with Executive Decree No. 32493, the minimum for all acts and contracts that are authorized by a Costa Rican Notary Public is determined by the following schedule, based on the actual value of the transaction:
- Up to 10 million Colones = 2%. On the excess of 10 Million Colones and up to 15 Million Colones = 1.5%.
- On the excess of 15 Million Colones and up to 30 Million Colones = 1.25%.
- On the excess of 30 Million Colones 1%.
The law also states that acts or contracts that are complex in nature may result in a 50% surcharge from the above. This fee is based on the real market value of the property. (For the purposes of this explanation and the former mentioned Decree, this is what is named as the “General Tariff”).
