- Pick your real estate agency
- Pick and Consult with your agent
- View properties
- Make an offer either in writing or verbally
- Negotiate the price and terms
- Get signed Offer To Purchase document to lawyer
- Deposit 10% with the accepted offer.
- Due Diligence period
I’m not really sure how this happens. Some may pick an agency that they are familiar with already. This may be a large known name brand real estate agency such as ReMax, Coldwell Banker, Century 21 or some other. I benefit from having this blog and receive a good number of clients to my non-brand name agency by those that have read information here. Sometimes it’s a matter of walking by and spontaneously stopping in.
The usual guidelines apply in Costa Rica that apply anywhere as regards “good business”. You want an agency that has a good reputation, has been around for awhile, and that you feel treats you right. Going with a known brand-name is no different in Costa Rica than going with any other agency. There is no licensing of real estate agents in Costa Rica, and all agencies should be concerned about their reputation. Getting a referral from someone that has had a good experience in real estate here is a good practice.
Within the agency that you choose there will likely be several agents. It’s a little tough at this point to have had a discussion with one agent, realize that there is no chemistry, and ask to talk to another one, but I don’t think that it is prudent to proceed with an individual that you don’t feel comfortable with, or that you feel doesn’t have your best interest at heart. Trust is the prime thing. Some simply decide to move on to the next agency and try there.
When you have selected your agent, there needs to be some talk talk. He/she will need to understand the purpose for the purchase and your budget.
Generally, we will start with a consultation that involves sitting in our office in Uvita, but it can be over a cup of coffee in a soda, and discussing the objective of the client. Why are they here in Costa Rica looking to buy a property? Most investors in Costa Rica real estate fall into one of about 4 different categories:
- Land-bank investors
- Income generating investors
- End of the world escapists (Ok, so there’s 5)
These are those who are looking to live in Costa Rica. It may be immediate, or at some point in the future. Most of my relocation clients are looking to move down in the future. They may be about to retire in a few years and want to secure their property now, while prices are still affordable. Or they may be a couple that simply want the Costa Rican lifestyle and perhaps are financially independent, or are able to work on the Internet, or tele-commute in some fashion. This may or may not involve children. Relocators may be part of a larger group of friends and/or family that want to put together a compound and live a simpler life. Then there are the escapists that are looking to secure a remote part of Planet Earth for what they feel is the coming fall of society.
These are the retired and/or independently wealthy, or the tele-commuters that will spend their homeland winter months here in Costa Rica, and the other 6 months back in their homeland. (I know that the term “homeland” has taken on a negative connotation in recent years in the States, but for the purpose of this document it is used to identify the client’s land of origin.) The migrators may or may not want to rent out their property while they are not in Costa Rica.
Land Bank Investors:
“To purchase land for the express and sole purpose of storing money until such time as it may be sold for a decent rate of appreciation.”
The above definition, as eloquent and literally astute as it sounds, is not copied from some academic reference. I made it up. This is the easiest way to be involved in Costa Rica real estate. All it involves is making an informed decision, buying the property, and waiting. This has made up a large part of our business in the southern zone of Costa Rica. It is now starting to change more with the number of migratory types and re-locators coming in which is resulting in a huge wave of construction.
Income Generating Investors:
Purchase a piece of land that will generate income on a regular basis. Purchasing an ocean view lot and building a nice home on it of, say, 2,400 square feet, and furnishing it nicely, can generate some pretty decent vacation rental income. In the Dominical, Uvita and Ojochal area, the vacation rental prices range from $1,200 – $7,000 a week. I’d say that $2,500 per week is common. You can see what these look like by visiting the Dominical.biz Vacation Rental page. This is a popular purchase purpose since the investment can return a cash on cash of 8 – 12% while the asset appreciation is running somewhere around 20% annually, AND that’s not all. Here is the Ginsu knives add-on that can come with an income generating real estate investment in Costa Rica: you own a beautiful vacation spot for yourself, friends and family.
End of the World Escapists
These are kinda rare, but they do happen, and they do seem to look towards Costa Rica with regularity. These usually want a large piece of land with water on it. They aren’t that concerned with investment potential.