Navigating the real estate buying process in Costa Rica can be simplified into five essential steps. Each step is crucial to ensure a smooth and legally sound transaction. Let’s delve into the details of this comprehensive process:
Step 1: Submitting the Offer to Purchase
Role of the Real Estate Agent:
Initial Agreement: Once you’ve identified the right property with your real estate agent, they will submit an Offer to Purchase (Letter of Intent) to the Seller or the Seller’s listing agent. This document outlines the proposed sales price and basic terms, serving as the initial agreement.
Negotiation and Acceptance:
Crucial Terms: The negotiation process begins as the Seller reviews the offer. Upon mutual agreement on the sales price and essential terms, the offer is accepted, marking the initiation of the formal transaction.
Step 2: Drafting the Sale and Purchase Agreement
Involvement of the Costa Rica Attorney:
Legal Binding Document: With the accepted offer in hand, you consult your Costa Rica attorney. They play a pivotal role in drafting the formal Sale and Purchase Agreement, a legally binding document. This agreement clearly outlines all conditions essential for the successful transfer of the property’s deed.
Ensuring Legal Clarity:
Conditions and Transfer Details: The Sale and Purchase Agreement covers critical aspects, ensuring legal clarity on the transfer process. This includes the identification of any contingencies, the agreed-upon purchase price, and the specifics of the property.
Step 3: Due Diligence Period
Complete Legal Research:
Property Verification: The Due Diligence period involves thorough legal research of the property. This aims to verify the absence of liens, contingencies, and legal issues, ensuring the property holds absolute fee simple title.
Professional Inspections:
Comprehensive Studies: Surveys, soil tests, home inspections, and other professional services are conducted during this period to provide a comprehensive understanding of the property’s condition and potential concerns.
Step 4: The Closing Process
Conveyance Before a Public Notary:
Deed Transfer: The Closing, or the conveyance of the deed, takes place before a Costa Rican Public Notary. The Public Notary ensures the property is registered under the new owner or company.
Shares Transfer Agreement (if applicable):
Company Ownership Changes: If the property is purchased with an existing company, the Shares Transfer Agreement facilitates the transfer of company shares. The Notary Public updates the company’s ownership details in the National Registry accordingly.
Step 5: Property Declaration for Tax Purposes
Municipality Declaration:
Tax Registration: The final step involves declaring the property before the corresponding Municipality for tax purposes. This is done by completing a simple form and submitting it, along with required documents, either personally or through your attorney.
Tax Compliance:
Ensuring Compliance: This step ensures compliance with property tax regulations, contributing to a smooth transition of ownership without any tax-related complications.
By following these five comprehensive steps, you ensure a transparent and legally secure real estate acquisition process in Costa Rica. Each phase is designed to safeguard your interests and provide a thorough understanding of the property’s legal and physical aspects.