Quick Guidelines when buying Property in Costa Rica
So you are thinking about buying some land, a home, or maybe a business such as a B and B or hotel. Could be a great investment! Costa Rica property, especially in the beach areas or other locations heavily trafficked by tourists has been a very good investment of late.
Because the baby-boomers in the USA will be retiring over the next few years, and the outlook is pretty good for the future. A lot of retirees are thinking about living outside the USA to save money. Costa Rica is a target.
Here are a few things you absolutely need to know.
There are no laws in Costa Rica that require realtors to have any experience or training. Realtors here are not required to be licensed. There are no professional organizations they must join, though there are realtor associations. Anybody, at any time, can represent themselves as an expert realtor.
There is no Multiple Listing Service (MLS) in Costa Rica. Several people have tried to start one, but in order for an MLS to work, all (or nearly all) realtors must be members and report all sales to the MLS who then maintains pricing information comparisons (comps). These comps then help both buyer and seller to assign a realistic value to a property.
Sound a bit like the wild west? In the realty business, it often is. Does it mean your going to get swindled, overpay, or perhaps have legal problems down the road. Maybe... but please read carefully the information below before you start this buying process. Especially see How to chose a realtor below but still read all of this page.
As there is no organization here, (and because this is my web site), I am going to assign some names to those in realty in Costa Rica that you are likely to meet. Simple really - Two types - Realtors and Agents. Again, these are MY terms, so don't ask a realtor if they are an agent or a realtor because they won't understand you.
Realtors in Costa Rica
This group is comprised of individuals and/or companies who (usually, but not always) have office space, a staff, originate property listings, and often maintain a web site with their listings. Some are legally franchised by some of the larger real estate companies that you might find in the USA or elsewhere. This does not make them better or worse as realtors.
Caution! I know of at least one realtor near San José that uses the signage, stationery, and logo of a major USA real estate company but is absolutely NOT connected with them in any way! The US based company apparently has chosen to do nothing about this whatever.
Welcome to the wild west!
Agents and Buyer's Agents in Costa Rica
There are a ton of agents here. They act as the go-between and provide introductions to realtors and potential buyers. They often show house. They can provide a valuable service. Often, people come to Costa Rica and really have no idea where they will want to live or buy property. As there is no MLS or central registry of properties, there is no such thing as being able to see everything that is available. These agents often have knowledge of available properties in several locations.
Buyer's Agents is a name I give to a slightly different group of people. This group has been around for several years and can provide in depth assistance... usually for a fee, but not always. Some offer custom handholding and will meet you at the airport and drive you around the country if need be. Some will charge you a daily rate which you pay only if you do not but property. Some charge you even if you do! These charges can be significant, especially if they are driving you around large areas and have to pay for accommodations every evening.
Do you really need an real estate agent or a realtor?
No more than you would in most countries. If you are one of those people who insist on buying before living here for at least 6-12 months and you do not speak Spanish, a realtor or agent is probably a good alternative.
As there is no Multiple Listing Service (MLS) here in Costa Rica, the odds of you paying too much are very high. A good HONEST realtor or agent can help too minimize the risk. Saying that, the best way again is to live here for a year, travel the country and when you find a spot you like, start asking a lot of questions. What you HANDS DOWN must have is a good attorney to handle the purchase.
How do you chose a realtor or agent in Costa Rica?
This is actually a fairly easy question though there are few hard and fast rules. Here is sort of a laundry list of things you might wish to consider.
Probably the most under-asked question yet perhaps the most important is "Is the real estate rep or agent here in this country legally?" Many are not.
To work legally in Costa Rica, a person MUST have their legal PERMANENT Residency or be a citizen of Costa Rica. There are NO exceptions to this rule affecting realtors. Ask to SEE their Permanent Residency Card
or their cedula de identidad (the Costa Rica ID that all Ticos must have and all foreigners receive if they
actually have legal citizenship). Do not listen to anyone who says they have "applied
for it" , it is "in process", or whatever. If they do not HAVE IT, then they
themselves are here working illegally and have the same tourist status as you do when visiting. So do you want to buy a home from a tourist?
Why is this important? Without legal status, they can be gone tomorrow. Perhaps even deported! They clearly have not committed to living here permanently. They are working illegally and YOU take the risk of dealing with them.
To use an old expression, they have no "skin in the game".
How long have the owners of the real estate company lived in Costa Rica and are they here legally?
How long have they been in business selling real estate? Less than 2 years, they are still "in training".
Approximately how many homes have they been involved in selling either as listing agent or referring agent? Ask for names and phone numbers of the last five person who used them to buy a home or property, then call those people!
In the area where they do business (example: Tamarindo), do you see their signs on properties for sale as you drive around?
Are they affiliated with any Costa Rica realtor organizations? Again, these are not mandatory associations that are required, but something is maybe better than nothing.
Do they have a web site? Does it contain photos and descriptions of valid properties they represent? However, just because they DO have a cool web site with lotsa pretty pictures, that does not exempt you from you doing your due diligence and asking the tough questions!
Do they speak your language and near fluent Spanish? Property buying is a complex process here, and can be very costly if you are not fully aware of and understand the process. If they are not able to communicate, you are screwed!
Do they have any "odd" requirements... like you have to use their attorney to represent you? Danger Will Robinson! You should be able to retain your own legal counsel for this important transaction.
Check out the local forums and bulletin boards! A ton of people moved here before you did, and many will have a tale to tell about their realtor or one they have heard about from firends.
Do NOT chose a realtor solely because you get the warm and fuzzies when you meet them. The dishonest ones HAVE to have great personalities in order to get their next victim client.
Please do not let the above information scare you. As everywhere, there are good guys and baddies. Just do your homework, investigate, ask questions, and do NOT be in a hurry! Real estate people almost always want you to make a decision quickly, but here, you must learn the ropes in order to get the safest and best deal.
Here is my promise! There WILL be property to buy in six months... or six years.