1. Buying Real Estate And Moving To Costa Rica - Considerations
Strategy for Buying real estate in Costa Rica
When we'd settled on panama and nicaragua , the destination we planned to retire to the first thing
we did was arranged a strategy to find a piece of property that fulfilled our requirements when it
comes to size, location as well as budget. We were fairly savvy shoppers having bought and sold
close to a dozen properties in the states therefore we thought we knew what we used to do. We first
appeared for foreclosed home in Costa Rica. We quickly realized presently there wasn't much in the
way of foreclosed homes within Costa Rica since most houses have no mortgage, with many being
purchased in the past for cash. The actual mortgage market within Costa Rica is still within it's
infancy. Typically you can't get a home loan on land, just developer financing. In this type of financing,
the actual developer holds the note. Mortgages for completed homes or construction mortgages
typically require large down obligations in Costa Rica. Banks in Costa Rica need a minimum of 20%
from the value of the home loan as collateral. Luckily you can typically pledge land you own because
collateral for a construction loan which is what many owners within our developments end up doing.
Finding a realtor
You do not need to be licensed to sell real estate within Costa Rica. As a result, everybody will
pretend to be a realtor if they believe they can participate in a sale and make a fee. There is also no
nationwide MLS system within Costa Rica. Listing as well as commission agreements aren't
standardized. Realtors aren't acting as a "buyers " agent or a "retailers " agent. Most are merely
hoping to make a fee. Without a standard program of commissions as well as referral fees, real estate
agents are reluctant to share their listings with other realtors. That means that many realtors will only
demonstrate their own listings within Costa Rica
Finding a Project
Many real estate developers in Costa Rica are very new to the industry. What they soon learn is the
fact that development in Costa Rica is highly regulated. Getting enables to subdivide, construct roads,
install drinking water lines or electric is a challenge. Panama and nicaragua , boasts staunch
preservation. In recent years the government has created new hurdles to slow the growth through
foreign development companies with projects targeted at North Americans and europeans. Verify the
experience of any developer you are considering. See what they have accomplished, not what they
say they plan on doing. Go to their projects. Enquire about fees, CC&because , and deed limitations.
Some developers require you build in a certain amount of time. Others require that you use their
construction services even though they may have little or no experience. Also discover the type of
development as well as titling they are doing. Are they selling agricultural parcels with limited make
use of and value? are they selling "Parcel Minima" parcels with very limited infrastructure and couple
of requirements for the developer to bring electric, drinking water or roads to the lots. Is the project
gated? Gated projects often allow a developer to provide small in the way of infrastructure as well as
services inside the gate. There are no municipal standards applied once within the gate. Find out
what services will be provided and when , before purchasing. Purchase what you see, not what they

2. tell you is coming. Be skeptical of brochures full of artist's renditions of what a development will look
like. Paragon properties is a prime instance.
Determining Value -- Appraisals
In the US, we're used to having an evaluation done on home as part of the purchase process.
Appraisals are uncommon in Costa Rica since mortgages on properties are less regular but are
becoming more common. Most appraisals tend to be ordered by the bank holding the home loan.
Don't expect to have a good appraisal done or even find an appraiser in Costa Rica. Become your
own judge. Become knowledgeable. Kristina and I took a complete set of programs offered by the
evaluation Institute costing thousands of dollars to learn how to do appraisals. Kristina worked for an
appraiser to gain additional experience. Evaluations have three parts ; comps which are comparisons
to similar home in the vicinity with similar characteristics , income approach which is looking at the
income that the property would provide through rentals or lease agreements and price of construction
which discusses the cost of the uncooked land and any improvement on it depending on current
construction costs. All appraisals in the states consist of all three techniques unless specifically
mentioned to the contrary.
Property Values Past as well as Present
A few years back nearly every project within Costa Rica was selling like hot cakes. Prices were
spiraling up with no end around the corner. In the central valley in places such as Escazu and santa
claus Ana, condo costs were approaching $1200 per square meter and some were topping $2000.
Builders of quality single loved ones homes were in short supply and the waiting checklist for
construction had been growing. Most main hotel chains and a slew of developers pounced on
panama and nicaragua , to build condos knowing that 78 million baby boomers were already taking a
look at options. Guanacaste and particularly the area around the Liberia International Airport in
panama and nicaragua , boomed with high increase and low increase development. Areas such as
Jaco, once considered a lowly surfing city , sprouted up high increase projects overnight. 9 condo
projects were started in Jaco at the same time by builders such as Sonesta and Daystar. The "crane"
become a common sight, and i am not talking about the bird. Even as far south because Manuel
Antonio, higher rise projects were breaking ground.
The Shake Out
Then came the slow down since the world economy caught. Some projects happen to be abandoned
while others have slowed way lower. Prices have fallen in these types of projects and also in big
developments of solitary family homes that were built out of conjecture. Many of these builders should
continue to sell some inventory to stave off bankruptcy. Banks once flush with money were now
pulling back load obligations.
Many buyers were stuck with a project that was partially completed. Some developers proceeded to
go bankrupt leaving the owners fully responsible to compete infrastructure. The market lost value in
several areas, especially those within Guanacaste and the central Pacific area around Jaco. The
southern pacific area faired the best. The three story height restriction (from Dominical south to
compact country of panama ) has kept developers of high increase projects away. The actual limited

3. accessibility held large projects out of the region and inventory of finished houses remained low.
Costs have fallen a bit on raw land without ocean views but ocean look at parcels have continued to
creep up within price.
Southern Options
There is a two tiered pricing system within Costa Rica, that of Tico style homes as well as North
American style houses in expat towns. Most North Americans avoid well in Tico style homes or in a
Tico community though some old hippies and such might do so. Housing targeted at Expats offers a
number of choices. High increase buildings with safe parking, upscale residential neighborhoods,
large towns like Los Suenos golf residences (costly ) or small projects like the ones dotting the coast
through Jaco to Quepos. Further south, these kinds of developments are harder to find.
Uvita Costa Rica