Tips for Buying Property in Costa Rica
Whether you are buying or selling GoDutch offers you professional advice and years of experience. We can help you save time and money on your transaction, and help you avoid common pitfalls. Click on the links below for some insider tips on buying and selling real estate in Costa Rica.
Buying property in Costa Rica: The Famous Costa Rica Fairy Tale
Before I start giving you some really valuable insider's tips on buying property in Costa Rica, I'd like to explain to you about a common mistake
of buying "Costa Rican property for American prices".
Since Costa Ricans have a way different way of life than you are used to, their values are very much different too. With this explanation I don't
mean to hurt the Costa Rican's feelings, I just mean to explain the differences in lifestyle to you, the new people in town, so you won't have to
be treated for eventual culture shock. My first wife and my actual wife are both Costa Ricans, so I have a lot of experience (mostly good) in such
matters. When you are buying property in Costa Rica, you have to know that middle class Costa Ricans place no value, or very little value on:
Common characteristics of properties for sale in Costa Rica
Formal dining room:
As they generally only invite family over to their home, they have no need for a formal dining room.
TV room:
The same as before, and they all watch the same program, like it or not. It's very unusual to find a TV in each bedroom too.
Hot water:
They have no hot water in their kitchens and use suicide showers in their bathrooms.
Nice Kitchens:
Since the maid is the one doing the cooking, the kitchen is not the place where the family gathers when all together.
Pantry:
They buy small quantities and have no use for a pantry.
Large master suite:
To Ticos (Costa Ricans), it's just a place to sleep, forget about having a nice and cozy hiding place.
Storage areas:
Costa Rica doesn't have four seasons, only two: dry season and green season. So they have much less stuff to put away. Also their wardrobe is used year around, so closet space is smaller than what you are used to.
Finishes:
Costa Ricans live outdoors a lot. Besides that, they'll hardly ever invite strangers or even friends to their homes, only family, so they have no need to show off with their house. You'll find people live in a very cheap and horrible home, but they drive a BMW to work.
Views:
They are born to views, so they do not appreciate views as much as you and I do. Often they'll build their home with the back to the views!
Garden & Yard:
City people do not value a back yard, it only gives them a lot of work to maintain. Usually there is someone in the family who owns some land with a cottage in the countryside. Here they call that a "quinta"; and that’s where they go when they need some leisure.
A simple and easy life:
They have all they want, so why ask for more? In the city, because of foreign influence (including ex-pats, cable TV, advertising), people are familiar with the luxuries of the world. That's the reason for all the changes in the Central Valley. In the countryside you'll still find the way of life your grandparents and great grandparents used to have.
Of course the Costa Rican upper class has traveled a lot and even lived in foreign countries. There they have learned the ways of the “gringo”, so when you are buying property for sale in Costa Rica, you’ll find that homes of over $150,000 offer much more of the things you expect a home to have. That’s where the “American price” starts. Enough of explaining about Costa Rican lifestyle, let’s go on with the real buying tips.
If you are buying property in Costa Rica, the measurements will normally be in the metric system, unlike many of you are used to. To help you a little with this difficult part of buying property for sale here, we’ve made you a Land Measurement Chart.
Finding Good Floor Plans.
Good floor plans are easier to live with, and they have greater resale value. Because of the before mentioned, floor plans are made to a different lifestyle. Look for:
No walk-through rooms!
Access to rooms should be through hallways, generous room perimeters or outside doors, not straight through another room.
A standard three-bedroom/two-bathroom count.
This is one of the most resalable combinations.
A well designed kitchen space.
A kitchen doesn't have to be big, but should have adequate counter space, outlets and space for appliances. Look for the famous triangle: sink – refrigerator – stove. Custom cabinetry is a great feature too.
Well placed stairways.
Access to other floors should be from stairs that are either placed near the front entry or are centrally located. A poor location would be in the middle of a living room.
Flexible rooms.
A room that can be a guest room, office or a den is an example of a flexible room with great resale value.
House Hunting in Costa Rica
Know the market, know what you want and know what to look for. This house hunting process prepares you for each step and helps you carry out a successful search.
Know the Market.
If you understand current market conditions, you'll position yourself better as a buyer. It helps to know if you're in a seller's market (where housing demand is high and supply is low) or a buyer's market (where housing demand is low and supply is high). In a seller's market, you may have to make a full price offer or higher just to beat the competition. In a buyer's market, you have more room to negotiate. Costa Rica has a different real estate market than most markets in the world. It is hard to find comparatives as you are used to. You are always welcome to make an acceptable offer on any property. Your GoDutch realtor will advise you on how to go about it.
House Hunting in Costa Rica
You can whittle days off the house hunting process if you set your priorities. Before you start your search, decide what you need, what you'd like and what you don't want. Then you (and your GoDutch realtor) can sort through available home listings more efficiently. To receive listings updates, ask your GoDutch realtor. The following questions will help you focus your search:
Single-family home, apartment or townhouse in a gated community
A single family home gives you more ownership and privacy, but more responsibility too.
A single family home rarely has the security you’d be looking for if you plan to travel a lot. A home or townhouse in a gated community or an apartment does have that advantage.
An apartment or townhouse in a gated community may include services and amenities, but requires you to help pay community costs and make community decisions.
With a new home, new construction and materials may decrease maintenance costs, but you may have fewer choices in terms of style and neighborhood.
With a pre-construction purchase in a gated community or apartment building, you have to make sure the developer is responsible and has a good history. Count on it that there will be no final completion date offered when you buy, due to imported materials, sub contractors and even the Costa Rican government taking their time for permitting and registration of title.
With a resale, you generally pay less to live in a more established neighborhood, but may have higher maintenance costs.
Think about neighborhood qualities that matter to you, such as good schools.
Choose the temperature and rainfall you are looking for.
Make up your mind about the amenities you’re looking for in the immediate neighborhood or if you’re willing to drive a little further for those.
Calculate how much you can afford. If you need a mortgage, ask your GoDutch realtor to help you. Few banks in Costa Rica offer financing to foreigners who don't earn a local income. Your GoDutch realtor will walk you through the mortgage process at Scotiabank who is the only bank here who offers mortgages to non residents. There are many ways to use your property at home as a collateral to buy a 2nd home in Costa Rica. That will even offer you tax deductions and a much better interest rate. If you are an American citizen, you can also use your
I.R.A.
or 401K to purchase a property here.
Once you focus your search, you can expect to spend a few days to a few months shopping for a home, depending on how well the available homes match your needs and expectations. When visiting homes:
Look beyond listing language.
That "cozy" bungalow may be impossibly small. Pay attention to practical details such as square footage, average utility bills and annual property taxes. Most of you are used to listing measurements of a/c areas. In Costa Rica, every realtor uses “under roof” measurements. That means that terraces, balconies, carport and garage are included.
Costa Rica real estate is different than where you come from.
The way the market behaves, the different areas and the legal side of purchasing a property is not the same as what you are used to. You will want to have an agent you like and get along with. You also want to make sure you have an agent who doesn’t show you the wrong properties. All GoDutch realtors are obliged by company rules to check the legality of each listing before they show it to you, unlike most realtors in the country. Realtors are not obliged to be licensed, so lots of housewives, taxi drivers and even attorneys make you think they are professional realtors. And don’t be too sure a licensed realtor will take care of you the way they should. Being licensed does not mean being professional.
A home will almost never be exactly the way you want it to be. The perfect house does not exist, even when you custom build it. If it is, congratulations; if not, look at what property comes closest to your dreams. Keep an open mind when looking at homes. Learn how to look through the details, which can be fixed.
If you are a first time buyer in Costa Rica, look carefully at properties that need work and think about what it will really cost. You may want to opt for a house that needs cosmetic fixes, not major remodeling. If you do find a house that needs major remodeling, but is just right for you, your GoDutch realtor has lots of good contacts to help you to get the job done. Keep in mind that major remodeling is twice as expensive as building new.
When you start your first showing, your GoDutch realtor will give you a flyer on each property you view, with most important data on each property. Of course, each buyer has a different view on things, therefore we’ll include some blank sheets, and so you can make your own notes.
Before you rush into making an offer, you should take some time to compare the properties you've seen against market conditions, comparable properties, your priority list and your listing notes. These are the building blocks of your buying decision and, later, your offer.
Which homes on your list are in attractive areas, which ones are likely to sell fast, which ones are not? Why do the owners want to sell?
Which homes best match the qualities you want? Rank your priorities in order of importance so you can weigh the tradeoffs when you make your decision.
Reread the notes you took while visiting each home and look for qualities that match your priorities. Think hard about inconsistencies that matter. Some tradeoffs will be unavoidable.
No matter what your situation, take the time to really think about which home is best for you. Use the information you've collected to compare your first choice with other close candidates. Although it may be tempting to move quickly, you'll want to cover all the bases before you commit to a purchase.
House No. 1 may have all the features you want but the price is high and the seller is unmotivated. House No. 2 may need significant cosmetic work, but has all the other features you want, including the right price. Expect to go back and forth while you're debating your choice.
There's an old real estate adage: "Buy to live and to sell." You may think you're going to be in your new home for the rest of your life,
but chances are you're not. Give sufficient weight to the home's potential resale value, and make sure you have all the facts. A planned expressway
a block away could drastically change your home's resale value 20 years from now. This is important advice even in the Costa Rica real estate market.
Helping You Buy Property in Costa Rica
I hope I’ve been able to make your search for the perfect home a little easier now. I also expect that this little insiders information will make you decide to pick the right realtor for your real estate purchase: a GoDutch realtor, we go the extra mile for you.
Ivo Henfling
Using a Realtor for Buying Property in Costa Rica is Important
Costa Rica does not have a multiple listing system like many other countries. That does not make it easier for the buyer. GoDutch takes care of that; we contact other Costa Rica real estate brokers to update our listings and offer our clients the best available on the market. In addition, GoDutch is part of American European Real Estate Network, so we can refer you to our partner brokers and companies in different areas throughout Costa Rica. This network boasts the largest property database in the country.
But the most important thing when you buy real estate in Costa Rica, through any broker, is to make sure that the property you’re buying is properly registered. In Costa Rica many things can happen, from the property not having legal title to not being in the proprietor's name yet, for whatever reason. The properties could also have a lien, easement or mortgage. GoDutch real estate agents always check the National Property Register before listing the property, to make sure it has free and clear title.
Advantages of Using a Realtor in Costa Rica
When you buy property on your own, you will theoretically get a better price, since the seller doesn’t have to pay the broker a commission.
(In Costa Rica the seller pays the realtor's commission). But who can give you better advice on the purchase than a professional especially in an
unfamiliar market? A real estate agent who has spent every day for the past few years looking at properties in Costa Rica and selling them?
Someone who knows the market in Costa Rica, the laws, the companies and the builders? Because most U.S. style homes in Costa Rica are custom built,
it is important to know who the builder is and when they built it.
Any real estate you buy is most likely the single biggest purchase you will make in your lifetime, and you don’t do it very often. It’s
not like going to the supermarket! As real estate brokers in Costa Rica, we have intimate knowledge of the local market, so let us give you
professional advice. Don't forget this is a new country with a different language, habits and customs. We know our way around.
We find a lot of people buy property on their own and when they want to sell it again, they call us. Why would they? Because they made some big
mistake buying it in the first place. When we sell it for them, they always have to accept a lower price than what they bought it for, which means
they paid too much in the beginning.
In Costa Rica the seller pays the commission.
So don’t worry, we won’t charge you any fee to show you the properties. We don’t even charge you a showing fee like many other realtors in Costa Rica do. You can of course try to save yourself that commission and buy straight from the seller. But then you run a risk of getting caught in any legal problem or scam. Using our services will save you lots of time and $$$$ in the end.
GoDutch Realty – Specialists in Costa Rica Real Estate, Homes, Condos, Land for Sale, Commercial Real Estate, Rentals,
Costa Rican Properties, Costa Rica Investment, Living in Costa Rica, and Costa Rica Retirement.
