How to make an offer on a property in Costa Rica
Do you have any idea how to make an offer of a property in Costa Rica? It is amazing how many Costa Rica real estate deals go sour in Costa Rica. Often, that happens because the buyer hired an incompetent real estate agent or because the buyer goes FSBO. Often parties don’t realize that they are in another country with different rules, with a different culture and a different language.
Some think they figure out how to make an offer, just because the seller also speaks English! I know it is because they lack the confidence in the real estate agents here. Some have read online horror stories about it. Others just believe they can do something as simple as buying a home in Costa Rica without any assistance.
Ask any FSBO buyer after their purchase how they made a mistake. You never read about those horror stories because they feel ashamed to write about a mistake when they make an offer. Only when someone else is to blame, these stories are written. Using a competent and expert real estate agent in Costa Rica is the start of living a happy life in Costa Rica and not a horror story.
Make an offer
There is no difference when you make an offer on a property at the beach or in the Central Valley. The due diligence process is the same.
Did you find a property for sale you like and are you ready to make an offer? Do NOT make an offer verbally. Write it up and sign it. But there is much more to it.
Your real estate agent will have a good offer form that will take into account everything that is important. A signed offer doesn’t create any legal obligation. But, it is a good way to make sure you are taking all the necessary steps to get to the next one in the real estate closing process: an option to purchase – sale agreement.
Before you get to the agreement, first get the following information:
- Be sure that the property has a clear title
- Know if the property has a survey
- That the size of the property is exactly the same in both the survey and the title search.
- Is the person who is indeed the legal property owner, is that person legally registered as such?
- Or has that person the right to sell or is the legal power of attorney for the person or corporation to sell the property.
- Is the property free and clear of liens? Some are easy to understand like a power or water easement or a mortgage, but there are others you will need a real estate agent or even an attorney to interpret for you.
You or your real estate agent have to check all this before getting an agreement in place.
Your offer should be subject to the home inspection done before you sign the option to purchase – sale agreement. That is necessary because Costa Rica doesn’t have any regulations about home inspections.
What sense does a home inspection make if you are buying “as is”, which is how it is done in Costa Rica? What if after you make an offer you find out that you need to replace the roof? Did your option to purchase – sale agreement specify the roof as a possibility of being able to walk away and get your earnest money back from escrow?
Finding a good home inspector is another issue. I have seen buyers use the brother in law of his neighbor, who is an engineer, so he knows about construction. Don’t go there, be smarter than that. Some use an architect or a contractor, who of course think you should buy a building lot. Then they can build or design you a new house. I’ll assure you that they will find everything wrong with the house you are planning to purchase.
Formalizing a purchase
These are just the first steps of formalizing a purchase of a property in Costa Rica. Using a real estate agent for this process will not only make it safer. To make an offer with the expert advice of a real estate agent, it will make it a lot easier on you and less stressful. The seller is paying the real estate commission anyway, so it’s a FREE service.
Our agents can take care of all the legal hassles and the day to day necessities like getting you going in your new community. Contact us now, before you want to make an offer on a property without having the necessary knowledge.
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