For Sellers

Helpful information for sellers of property in Costa Rica. Includes working with agencies, trends, evaluation, stories.

Should I Offer Seller Financing?

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This question just in from a land owner in Uvita.

I have a question about owner financing of real estate property for sale, and do not really know anyone else, besides you, to trust with a realistic, objective and intelligent answer.

We just received an email from the real estate agent who brought the buyer today, asking us what our financing terms would be. As of this moment, I do not know any details about the offer price, what the buyer’s financial position is, how much they have in cash as a down-payment, but before putting our cards on the table, I wanted to ask you about usual and customary seller financing terms in Costa Rica.

Seller financing in Costa Rica
Is Seller Financing a good idea for a seller of property in Costa Rica? Definitely. However, there are a few questions to answer first.

What would be typical and reasonable financing terms?

  • Is asking a 50% down payment, with a 7-8% interest rate, maybe a balloon payment or 2, in a year or 2, reasonable?
  • How can we make the deal air-tight as far as security of the down payment, and if buyer does not meet balloon payments, we get the property back, with no hassle.
  • Is there some sort of legal process, escrow or trust vehicle here in Costa Rica to protect us, the seller, from default?

Quick answer (based on info provided):

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How to Sell a Property in Costa Rica

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It is common to think that you know all about how to sell because of your experience in real estate in another land. In Costa Rica real estate, this type of thinking can be a real hindrance.[/caption]

We have posted quite a bit on this blog about seller’s options in Costa Rica and in particular, The Zone. In this article I will list the pros and cons of the various Seller’s Options and hopefully help to unravel some of the perplexing issues presented by the lack of representation for the seller.

How to sell real estate in Costa Rica

Options:

  1. Open listing
  2. Exclusive listing

How to do an effective Open Listing:

For a raw land listing, here is a list of what you’ll need:

  1. The survey (plano) of the property.
  2. Information on the various fees associated with the property, ie. taxes, road dues, water, monthly maintenance.
  3. Current photos of the property and its view.
  4. Creative write-up

For a house listing you’ll also need, in addition to the above:

  1. A description of the house – number of bedrooms, baths, square footage, if there is a pool, garage etc…
  2. Who built it and when.
  3. Disclose any details about the house that the buyer has the right to know.

What you do with all this:

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Interested in Costa Rica real estate as an investment. They primarily live somewhere else, but they own property in Costa Rica for the asset appreciation potential as well as possible rental income. Some just buy and hold (land-bank). For developed properties, the investor has a vacation home to visit as desired.

Migrators spend a regular amount of time in Costa Rica during each year.

Re-locators are those that are looking to move to Costa Rica from wherever they are. They will live full-time in Costa Rica.