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SunnySoleil

What to believe about buying real estate in Costa Rica?

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We've moved to Costa Rica after spending many winters here and searching all over for what area suits us best. We are going to take the next year to slowly and cautiously look around and buy property to build a house upon. We love the Tico culture, the area we want to settle long term is a pueblo in which Ticos and Gringos intermix and mingle. We send our kids to school here with the Ticos and we have applied for residency.

 

We have worked very hard to be here for 20 years, probably like many of you, and saved to buy our little slice of heaven. So we want to be cautious and smart.

 

I am intimidated by all of the warnings I have received about buying real estate in CR. I have been warned about shady realtors, disreputable attorneys. We have been told horror stories about land that was purchased, but then the title was not in the "owner's" possession, etc. "Buyer beware!" seems to be all over the place. My understanding is there isn't a licensing agency for realtors, I've heard there's a Tico price and a Gringo price, and there is no definitive range of price comparisons.

 

In contrast, we also have friends who live here, are easy-going hippie types, and tell us to just trust the Universe and all will fall into place. lol!

 

I'm not sure whether to heed these dire warnings... or wonder if they're just spread out of fear by fearful Americans. (I also think the US can have a false sense of security in regards to buying real estate and people get taken there all the time!)

 

We really don't know what to believe!

 

Anyone have advice or links, recommendations for real estate attorneys that can set up the title transfer, and S.A. for the land?

 

We also need someone who is an expert in both USA and Costa Rica tax law?

 

Or how about a link to learn to research and learn the real story with buying real estate here?

Edited by SunnySoleil

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Since you are still relatively new to actually living here, I would advise 'wait a year' and see if the bloom is off the rose, and you can still see yourselves living here, for the long term. Your kids will have been in school and see how they have progressed during this settling in process. You may decide that CR is not for you or you may prefer another area where the education system is more to your liking.

We have lived here for nearly 13 years, and are thinking very hard about another real estate purchase. It is not an easy decision, that one wants to make, and regret in the end, hence, buyers remorse. Soooo easy to buy ... but so hard to sell.

Personally, I would advise purchasing an existing property where the kinks have been ironed out, and you can see what you are getting, rather than find it is not what you expected. Been there ... done that!

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[NOTE: I was composing this while CRF was writing hers and she posted first, just before I finished mine and then saw how similar our posts were. -pm ]

 

Hola Sunny,

 

Yet AGAIN, the advice comes forward to rent first 'til you are sure, sure, and certain that CR is for you and also that the area IS for you.

 

Give it six months to a year before you take the 'property plunge in Perez' and purchase something.

 

Like you I visited for more than twenty years off and on but when I finally moved there and started staying for half a year at a time, and renting an apartment which entailed setting up my utility and other accounts and maintaining them plus all the other things that living somewhere (not vactioning there) only then did I start to see what it meant to live in Costa Rica. And it is true.... Living there is not like visiting there!

 

Still, there is no doubt in my mind that all those visits I made over the years were helpful for me, if only in that I 'earned my way around'. But is was simply not like living there.

 

So my advice is to be patient and not rush into buying property 'til you have been there long enough. A year's cycle is a good bellwether because you get to see both seasons and how they affect where you are.

 

Best of luck with continuing to settle in there in Perez!

 

Cheers!

 

Paul M.

==

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I want to add that many times the problem is with the seller/sellers agent, not the lawyer. If the seller/agent has not been truthful in regards to the information they have provided, you cannot blame the messenger.

We were told, 'no problem accessing electricity ' Wrong!! Had to purchase adjoining land to gain access to it. $50+K .

There was a phone line running right past the shack house on the purchased second property . Wrong!! Found out later there was no space left on it for us.But eventually got someone else's line who 'moved'. $5k

No problem with the water on the (different) property. Wrong! Dry season arrives, no water, plus the water that was available, is non potable. $20+K to build a tank approved by the water company to connect with towns water supply....which of course was another 'unexpected' expense.

No phone line, again. Easy to fix, Wrong!! $18K

Now, one can exist without a land line...but it is is much better and much cheaper.

Edited by costaricafinca

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I think you also need to weigh the value of renting versus buying. I own my beach house. If we sell, I think we'll probably stick to renting & wouldn't invest again in Costa Rica. It is just too easy to find good rental prices for nice housing & much easier to move if you find out after the fact that the neighbors suck, the dogs drive you crazy, crime is bad, etc!

 

Jessica

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There is no incentive to buy property here and it ties up capital in a very non-liquid asset. Many of us grew up with the "American Dream" story of owning a house and prices will go up forever.That was a lie and many people learned it the hard way. You also won't get any tax subsidies by owning a house and probably will have to pay cash.

 

I have lived here for over 2-1/2 years and there are plenty of SE VENDE signs that were here when I arrived.

 

T

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Good point, Tom. For us, we're renting a house in Escazú that is also for sale. Asking price is $229,000, rental price is $900 a month. I could rent it for over 20 years & still not pay the asking price for it. :)

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There is no incentive to buy property here and it ties up capital in a very non-liquid asset. Many of us grew up with the "American Dream" story of owning a house and prices will go up forever.That was a lie and many people learned it the hard way. You also won't get any tax subsidies by owning a house and probably will have to pay cash.

 

I have lived here for over 2-1/2 years and there are plenty of SE VENDE signs that were here when I arrived.

 

T

I HAD been thinking that we might have made the wrong choice in buying, but was reminded by a friend of a time not too long ago when you could not find anything to rent as things were going crazy and rents were very high. So, keep in mind that one of the reasons to buy (instead of renting) is to provide a stable situation. Always a tough call, but not a decision you need to rush.

 

Jim

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I looked at the topic headline: What to believe about buying real estate in Costa Rica? And my immediate answer was: Nothing. Believe nothing - especially not from realtors.

 

You should have A) Lots of experience in Costa Rica and a few really good Costa Rican friends you can depend on - and - B - the ability to jump over alligators resting in a pond like James Bond did and C) in your mind - be really really really really sure that it is what you want to do and it won't be a problem if you decide to sell your property and can't.

Edited by eleanorcr

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Another thing to take into consideration, is that you, Sunny, voiced that you were unhappy with "...every mechanical thing I have seen here is of poor quality" and that choices were not necessarily available where you presently live. After a time, this alone could cause you to rethink your location.

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That aspect is definitely a very minor concern for me. Big sky, nature, time with my family and a community I love far outweigh material things for me, always have. I'm sorry if you got that impression about me from the previous comment.

Edited by SunnySoleil

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The adage seems to be that it is easy to buy but hard to buy in CR. So, if you buy and are prepared to possibly never be able to sell the property or are willing to take a serious lose in the event you need to move than you are going into buying with open eyes. With such a glut of real estate it is important to shake the US notion that your home is an investment ( an asset that appreciates).

 

It just seems like with all the absent property owners fearing squatters will take their property that you would be able to negotiate a good rent.

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Good point, Tom. For us, we're renting a house in Escazú that is also for sale. Asking price is $229,000, rental price is $900 a month. I could rent it for over 20 years & still not pay the asking price for it. :)

 

While not perfect since it uses US data ... the break even point for you is 26 years.

 

http://www.nytimes.com/interactive/business/buy-rent-calculator.html

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