How to make an offer on a property in Costa Rica
Estimated Reading Time: 6 Minutes
Many real estate deals go sour because buyers do not know how to make an offer on a property.
Often, that happens because the buyer hired an incompetent real estate agent or because the buyer goes FSBO. Often buyers don’t realize that they are in another country with different rules, with a different culture, and a different language.
Some think they can figure out how to make an offer, just because the seller also speaks English! I know it is because they lack confidence in the real estate agents here. Or they think they can save themselves the real estate commission.
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 many mistakes they made during the purchase. You never read about those horror stories because they feel ashamed to write about those mistakes. Only when someone else is to blame, people write horror stories.
When you hire a competent and expert real estate agent in Costa Rica you can start living a happy life and not a horror story. Do you have any idea how to make an offer? Learn how now!
In The Wrong Place
It’s amazing how many fall completely in love with the country and end up buying in the middle of nowhere. Just because it was so cheap.
After a while, they start seeing the huge mistake they made. But by then they’re stuck. They spend the best years of their life trying to recover their money. I’m sure you don’t want to end up like that. That’s why you’re reading this blog.
How can you do this the right way? By learning how to make an offer!
Make an offer
There is no difference between making an offer on a property at the beach or one 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?
Then, do NOT make an offer verbally. Write it up and sign it (or ask your realtor to write it up). 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 for a buyer, as it does in other countries. 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. Think hard before making a list of everything that needs to be included in the offer.
Before you get to the agreement, first get the following information:
- Research the title and 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
- You might want to get the property resurveyed
- 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. I recommend doing the home inspection before you sign the option to purchase – sale agreement and put earnest money in escrow. That is necessary because Costa Rica doesn’t have any regulations about home inspections.
Properties are sold “as is” in Costa Rica. So, what sense does getting a home inspection make? 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, someone who 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. Ask your agent to recommend a home inspector.
Formalizing a purchase
The next step is to ask your agent to connect with your attorney. Please always use a bilingual attorney who specializes in real estate. Ask him/her to send the formal offer, so your lawyer can write up the option to purchase – sale agreement.
These are just the first steps of formalizing a purchase of a property in Costa Rica. To make an offer with the expert advice of a real estate agent, will make it a lot easier, safer, 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. They also get you going in your new community and will give you post-sale services. Contact us now, before you make an offer on a property without having the necessary knowledge.
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