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The use of escrow services when buying Costa Rica real estate

Estimated Reading Time: 6 Minutes

The use of escrow services when buying Costa Rica real estateThe safest way to buy real estate in Costa Rica is through escrow services.

These services are a secure way to transfer funds between a seller and a property buyer. The escrow company is a third party that handles these funds in return for a fee. This fee is usually 0.25% of the funds to be wired, with a minimum of $900.

Many Costa Ricans and even Costa Rican attorneys don’t even know what escrow services are. That’s because Costa Rican buyers deposit the earnest money directly to the seller. AND the seller can deposit the balance to the seller from their bank account.

Nonetheless, when you are a foreign buyer, and your money to purchase a property comes from another country, you need a place to park this money. AND you have to prove the origin of the funds.

The easiest and safest place to do all this is to your the escrow services of an escrow company in Costa Rica. Ask your real estate agent which escrow company they feel most comfortable with, or supply you with a list.

Of course, if you do have a Costa Rican bank account, personal or corporate, you can bring a cashier’s check made out to the seller to the closing. But then you still have to cover the problem of the earnest money deposit, the closing fees, and the realtor fees. So let’s take you through the steps, and you’ll see how well this functions if done the right way.

The use of escrow services when buying Costa Rica real estate


For many years, only attorneys specializing in real estate would have an escrow account for their clients. Until SUGEF (the Superintendencia General de Entidades Financieras), the Financial Institution Superintendency, started controlling them.

SUGEF controls all escrow services. Therefore this is the safest way to use a third party to hold the money until closing.

Bank Account

If you are a foreign buyer and you don’t have legal residency in the country, you won’t be able to open a bank account. Therefore, to make an earnest money deposit and the balance of the total amount of the transaction, using escrow services is a perfect and safe way of doing business.

Earnest money deposit

When buying real estate in Costa Rica, you first make your offer. Once accepted, your lawyer will write up a formal agreement called a purchase option. The buyer will have to take the property off the market and will want to see an earnest money deposit. This earnest money is usually 10% of the agreed sales price, but this is negotiable. Ticos hand this earnest money over to the seller, but this is not a safe way of doing business.

Open escrow

The escrow company cannot open escrow until both parties sign the purchase option. Not until then the escrow company will confirm the amount of the escrow fees. Then they also tell you what documents you have to supply so that they can open escrow for you. These documents are mandatory for any real estate transaction in Costa Rica in compliance with Law 7786. This is the law on narcotics, psychotropic substances, drugs of unauthorized use, related activities, money laundering, and financing of terrorism.

  • Copy of the passports – A clear copy of the passport(s) of the buyer(s) is needed.
  • Know Your Customer form (KYC) – The buyer(s) fill out this form to show who they are, their source of income, and if they are a Politically Exposed Person (PEP).
  • Origin of Funds – The last three bank statements of the account from where the money will be wired show the property purchase amount. If there is a sale of a property in another country involved, a copy of the deed in Spanish or English or translated from another language is requested.
  • Apostille – Some banks require to apostille all those documents.

Banks worldwide have these same norms, so complaining will not get you past these requirements. In addition, banks and real estate agents have the obligation to check these data with various international organizations.


About a week before the closing date, ask the escrow company to tell you when to wire the transaction balance. At this point, they may require more documents.


The beauty of using escrow services is that they deliver a closing statement. At the closing, the escrow distributes all payments to the parties involved:

  • Seller
  • Costa Rica government for taxes and stamps
  • Banks that hold an eventual mortgage to the property
  • Notary public who does the closing
  • The real estate agent(s) involved in the transaction

The use of escrow services when buying Costa Rica real estate

Be Aware

Out of the country escrow

A few escrow companies in Costa Rica use their escrow in the United States. However, when the escrow is in another country, be aware that the purchase agreement cannot legally be contested if there is a problem or dispute. This is because the United States has escrow laws, and Costa Rica does not.

Out of the country transaction

Often the funds don’t have to come to Costa Rica necessarily. If the buyer and the seller are from the same country, they can wire the money to each other. Then the real estate agent still must request the KYC and origin of funds to comply with law 7786. The agent has to invoice the commission as proof of the income, which the bank will request as soon as the commission arrives at the realtor’s bank account. Unfortunately, the notary public doesn’t have this obligation, which is why these money laundering laws make no sense to us.

The seller, national or foreign, must prove to their bank the origin of the funds by showing the sale deed. Therefore, always request the closing notary an authenticated copy of the deed at the closing.

Our recommendation is to use escrow services for every Costa Rica real estate purchase. Contact us now to purchase or sell property with our expert assistance.

Lifeguard photo created by wayhomestudio –

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Ivo Henfling

Your West-side of San Jose real estate agent, covering Escazu and Santa Ana, Rohrmoser and Ciudad Colon. If you are looking to buy a home in Costa Rica or invest in a condo anywhere in the Central Valley or looking for any property for sale in Escazu or Santa Ana, you need to contact Costa Rica real estate agent Ivo Henfling. Ivo has been selling Costa Rica real estate on the westside of San Jose, in the locations of Rohrmoser, Sabana, Escazu, Santa Ana and Ciudad Colon for over 20 years and can show you hundreds of happy buyers of real estate in Escazu and those other areas. For Ivo, a deal is not a good one unless both buyer and seller are happy.

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