Can I make my offer on a Costa Rica property contingent on the sale of my property at home?
Our real estate agent said we could make an offer contingent on the sale of our own property. Can you explain in detail how that works and is there any cost to us? Also, what if our property doesn’t sell in the time given? Thanks
Quite a few of our Costa Rica real estate buyers, fall in love with a property they saw with their real estate agent when they make their first due diligence trip. The problem is that they haven’t even put their property at home for sale yet. No matter if the market back home is hot or not, the sale of a property takes time.
Should you go ahead with making an offer and is your real estate agent capable of coordinating an offer contingent on the sale of your property back home?
- For starters, it is important to know what the situation of the sellers of the property in Costa Rica you want to make an offer on is and you should verify first of all the following information:
- Are they moving out of the country?
- Are they selling to purchase a property in a different location?
- Will they be renting a home after the sale?
- Do they need the proceeds of the sale of their property to purchase another property?
- How soon do they need to move?
Once your real estate agent has supplied you with all that information you will be able to take an educated decision.
What are your options?
- You can try to make your offer contingent on the sale of your property, taking into account a prudent time for action.
- Take the maximum amount of time the seller is willing to allow you. You will have to be willing to reduce the price of your property for a fast sale or be ready to lose the earnest money you put in escrow with the purchase-sale agreement.
- Negotiate, if possible, an extension to close in exchange of extra earnest money when you make the offer in case your house doesn’t sell in time. Don’t wait until the agreement has expired to re-negotiate.
- Bridge loans are a possibility in Costa Rica but are very hard to find, as Costarican banks don’t know the financial figure but you might be able to get an equity loan on your property back home to cover the time you need to sell your property.
- Use your retirement funds, like an IRA or 401K to purchase the property in Costa Rica. Once you sell your property back home, you purchase the property from your retirement funds.
- Do NOT make an offer and pray the property in Costa Rica doesn’t get sold before you sell yours. With cash in hand, you can negotiate a much better price.
Without trying to be negative, most sellers of a home in Costa Rica will need the proceeds of the sale of their home to be able to purchase another one. BUT! They might be able to negotiate any of the above with the owner of the home THEY ARE BUYING. That’s why it is so important your realtor might need to do a lot of work to make things happen.
When hiring a real estate agent, hire one with the ability to resolve a problem like this for you. It is easy to find out if an agent has this ability by reading the “About Us” and “Real Estate Testimonials” on their website.
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