Costa Rica Property Investor: Assemble Your A-Team

It seems everybody has heard something about the real estate market in Costa Rica. Often described as a sort of tropical paradise gold rush where dream properties at bargain prices await any and all willing buyers, this small Central American country has become somewhat of a modern legend. Unfortunately, the clarity needed to find smart buys within the current boom has been obscured by a haze of marketing hype and distorted by bottom-liners. How do you successfully navigate through the fog? First and foremost, you need to find the right people to guide you--specifically, a real estate agent and an attorney. This article will help you find the right people for the job.

Finding a real estate agent

Real estate agents in Costa Rica are quite a diverse and plentiful group, and choosing the right one is extremely important. Your real estate agent will be a primary source of information and is responsible for helping you and the seller negotiate a price and the terms and conditions of sale.

It is important to know that real estate agents in Costa Rica do not have to be licensed and no national registry exists to reliably check the background of a particular agent. For this reason, you must be extra cautious when selecting the agent you are going to work with.

The best way to find an agent is via a reference from a satisfied client. All references are not equal, however, and there is no absolutely foolproof way to verify that the reference you received was not orchestrated by the referred agency. References from long-standing members of moderated, well-respected online discussion groups* are relatively safe, since the client’s integrity can be verified by other members of the forum.

The overwhelming majority of buyers purchase property from the first real estate agent they speak to. This is unwise. After meeting and speaking with a real estate agent, even one referred to you by a trusted source, always investigate his or her credentials. You should ask the agent for more references--a trustworthy agent will never have a problem doing this. Also check to see what other property owners say about the agent by asking around in well-respected discussion forums*. In any case, you should always speak to more than one agent if only to get a fresh perspective on things. The small amount of work that this incurs is worth the extra effort.

In most cases, your agent will be working on behalf of the seller. However, there are real estate agents who act as "buyer’s agents" and work for the buyer. It is important to know your agent’s fiduciary obligations from the beginning.

Once you begin to focus on a particular property, your real estate agent should be able to provide you with an accurate copy of the property map or "plano catastrado". Make sure and verify that the property map matches the property title and that both correspond to the physical property that the seller is advertising. If your agent cannot produce these documents in a timely manner, or if your intuition tells you something is wrong, find another agent.

Finding an attorney

Hiring a qualified attorney is recommended for all real estate buyers. Since all property transactions require the services of an attorney, it is definitely in your best interest to hire someone who works on your behalf rather than on behalf of the seller.

There are many qualified attorneys out there, but there are also many whose lack of experience and expertise may cause problems and/or delays. In order to find a good attorney, you should get a reference from someone who has bought property in the same area in which you are interested. If you do not know any property owners, you can always ask for assistance in a well-respected discussion forum*.

After you find the name of an attorney, you should check his or her disciplinary record by going to http://www.abogados.or.cr and clicking "Quejas y Suspensiones" (Complaints and Suspensions). This website will tell you if any attorney has been suspended for delinquency or disciplinary reasons.

Your attorney will be responsible for investigating the property title, investigating the seller’s company (if applicable), assisting with the necessary due diligence, drafting the purchase agreement, and preparing the transfer deed. An attorney may be needed for other tasks such as setting up a corporation to buy the property, interpreting and filing additional documents, and other legal tasks.

Conclusion

Your chances of success in purchasing property in Costa Rica will be greatly increased when you assemble the right team of professionals to help you. Of course, there are many scenarios and complexities beyond the scope of this article, such as building on your property, running a business, or purchasing property regulated by special land use laws, but by acquiring the services of a qualified real estate agent and an experienced attorney, you should be well equipped to handle such developments.