He’s decided he’s definitely going to move to Costa Rica… he’s sitting in a coffee shop and a young Costa Rican approaches him and, in broken English, informs him that his uncle is selling a property ‘with a beautiful view’ and ‘a really low price.” He then explains that you’ll be able to save “big bucks” because you’re buying directly from the family and you won’t have to pay a commission.

Too good to be true? Try telling this story to any “gringo” living in Costa Rica and you’ll get knowing smiles and nods.

This scenario and countless similar variations play out every day in Costa Rica… and the saddest part of the story is that most buyers don’t know until years later how much they have overpaid for their property.

The above example can almost be laughable because who among us would not try to get as much as they could for their property if a group of wealthy foreigners descended on their neighborhood? Almost everyone reading this will know that there are no government or local regulations regarding the purchase or sale of real estate in Costa Rica. In other words, it’s CAVEAT EMPTOR (buyer beware) and “anything goes.” You are truly alone.

This is not to say that there aren’t honest real estate people in Costa Rica…there are…but how can you find an honest real estate person AND get the best value for your purchase? Although Costa Rican real estate may be among the most beautiful in the world, none of us like to feel taken advantage of.

Most “gringos”, when buying real estate in Costa Rica, assume:

1. The real estate system in Costa Rica is VERY similar to that of the United States or Canada.

2. Houses are readily available to buy in Costa Rica and although they may be a bit different, they can be easily remodeled.

3. How different can the US and Canadian real estate system be if there are real estate firms like ReMax and Century21 in Costa Rica?

4. The Internet is a true and valid representation of real estate and prices in Costa Rica.

5. The full range of services, such as electricity, telephone, internet and water, are available almost everywhere in Costa Rica.

6. Title insurance and fraud protection are easily obtained. The SAD truth of all of the above is that they are all fake!

Reality:

1. The real estate system in Costa Rica is “open wide”

2. There are no “comparable” ones here, so you never know if you’re paying a fair price.

3. There is practically no protection against fraud and misrepresentation in Costa Rica.

4. It’s more expensive to remodel an existing home than it is to build…and there really isn’t much protection against builder fraud…unless you take certain steps.

5. Real estate franchises mean nothing here as they are not subject to strict rules and regulations like in the United States or Canada. Here they are used purely as a marketing tool.

6. Public services and all ancillary services and common infrastructure services are not readily available in all areas of the country. Even in some of the more prosperous areas of Costa Rica, it is common for power and water to be “off” for several hours three or four times a week. Phones in some areas can literally take years to become available. Building permits are denied in some areas because the local infrastructure cannot support the increase in population. In some beach areas, the issuance of building permits may NEVER be resumed, as the infrastructure simply cannot handle the number of incoming “gringos”. DO NOT ASSUME THAT EVERYTHING IS THE SAME… DO NOT GIVE ANYTHING BY SENSE!

7. Approximately 40% of all gringos who settle in Costa Rica return “home” within five years… and more than 55% of all gringos who settle in beach areas year-round return in the same period of time.

8. Real estate fraud is common, even with title insurance. Suppose you will need a lawyer to control your first lawyer! (Really…)

“Okay, you have my attention. How do I know if I’m not overpaying for real estate?”

Unfortunately, it is impossible to know if you are getting a good price or not. The vast majority of real estate agencies show their ads at the price requested by the owner. But the most important thing to know about Costa Rica real estate is: Costa Rica real estate is a two-tier market: a price for Ticos (locals) and a price for gringos (foreigners).

So… the question then is “how can I, a gringo, get Tico prices?” ….Or… “Why should I believe you? Are you trying to get more business for yourself?”

Let’s address the last question first. My company operates in a very, very small geographic area of ​​Costa Rica…probably less than 5% of the country. We have more business than we can handle.
Our firm has several Tico “scouts” who speak daily with potential property sellers in our area. We do not list every property we find for sale because 90% of the properties or homes we list are overpriced. Remember, the old cliché of “almost everything in Costa Rica is for sale at the right price” really does have some validity. (Look at it this way: If someone offered you twice what your house is worth, you’d probably consider selling and buying another one and pocketing the difference, right?) Because we see so many properties, we are aware of what is a fair value and price. Most people, including the locals, are not.

If you take a look at the many advertised websites selling Costa Rica real estate, you will often find literally hundreds of houses and properties for sale AND will refer to an MLS that exists in Costa Rica. TRANSLATION: This means that these listings are collected from other websites and are claimed as their own. There are practically no exclusive listings in Costa Rica. These firms have categorically not discussed all of these listings and claim them as their own. In fact, 99% of all real estate transactions in Costa Rica take place exactly as they have for decades…mainly through word of mouth.
mouth.

“So…what’s next? How do I find my ideal property…and at the right price?”

In my opinion, your initial assumption should be: “all real estate in Costa Rica is overvalued.”
Then, step two: Spend time finding an area or city that you absolutely love and “feel right.” Spend time there. Talk to local gringos about prices, utilities, infrastructure… all the items on your “check list.” These people live there. They should be able to tell you the pros and cons of life there.

Now comes the hard part… WHAT and WHERE and AT WHAT PRICE?
Chances are there are areas within your personal “chosen area” that will be more expensive than others… Greece, for example, has a specific area (San Isidro de Grecia) that has a preponderance of gringos and has a minimum price 50% higher than surrounding properties? Why?…

who can tell. In my opinion, it’s not worth it. But the point here is:
make sure you see ALL of the surrounding areas, not just one, or your decision-making will suffer. In many areas there are simply no “well known” real estate firms or firms that advertise on the internet OR even speak English. (Note that “everyone” is a real estate agent in Costa Rica, or at least knows someone who sells property.) But it is imperative that to find the best price you need SOMEONE who knows the area and can at least find good prices.

Several important points:
1. Ticos prefer to live on a main road. Not everyone has a car and generally prefers to buy something smaller and on a bus line. (Smaller properties, i.e. those under 5000 square meters, can only be legally purchased if they are on a main or main street.)

2. The average Costa Rican family earns between $500 and $700 per month. Most Ticos can’t afford the same properties as gringos. This should be pretty self explanatory, except most gringos don’t even consider it when they think of buying.

3. 95% of gringos prefer properties that offer privacy and, at the same time, comfort and security… and of course, we all want a view AND a river! And certainly at least an acre or two. Be specific with your wish list. Make sure you know exactly how much a new road or new power lines will cost for your dream property. It has to be taken into account. When my wife and I were looking for a property and discovered that it would be almost impossible to find an existing house to buy… we used the services of a local tour guide to help find a property. We didn’t find out until later that we overpaid for our property by almost double. We’re still not sure who got the difference between the sale price and which SHOULD be the real price.
been… and at this point it doesn’t matter except to serve as an illustration and warning to others in the same position.

4. Don’t be in a hurry to buy. Rent if possible and get to know the area.

5. Ultimately, you will need to hire someone to help you find a property. But… (and this is crucial) be sure to let this person know that you know the seller will likely give “his employee of his” a commission and that you’ll expect to be able to verify the exact selling price. You can even tell this person that your attorney will need to verify the price. It is imperative that your employee knows that you know exactly how the system works. It won’t guarantee that games won’t play, but it will help.

6. Talk to local gringos and ask for help. Find one or two local attorneys and do the same. Talk to the president of the local bank. You will slowly get an idea of ​​the local pricing structure. Unless you are lucky enough to find a real estate company that you have complete confidence in… you will definitely need to use locals to be your “scouts”. And it is crucial that you point out to them that sellers do NOT know that a gringo is interested in buying. (If you use more than one “explorer”, you will quickly see the gap between Gringo and Tico prices and the disparity that is always here. And if you don’t… then something is wrong with your explorers’ findings.)

A few more comments…..
-if you plan to live in an efficient gringo community or a popular beach area… it will be even more difficult to find a good price and value. Demand and prices have become almost stratospheric. It will take luck or perseverance to get true “value” near the ocean or in a more expensive gated community. The above is mainly for the purchase of raw land. The following should be used as a rough guide when purchasing land with an existing home:

Construction costs (including architect’s fees, utilities, landscaping and all extras):
Central Valley: between $38 and 42 per m2. football.
Sea or beach: between $48 and 60 per square meter. football
Gated or development areas: the sky is the limit
You will be the only one to determine how much of the premium you are willing to pay. And remember that when calculating replacement value, Ticos include ALL tile areas in their size estimates. You must not. (For example, a tiled exterior porch doesn’t cost as much as an interior portion of the house…estimate about a third.) If at the end of your search you find your “perfect” property… DON’T FORGET YOUR CHECKLIST! And lastly… make sure you get the services of a good lawyer (and make sure he or she is bilingual and has all your documents translated). Ask for referrals to local gringos or other Tico professionals. And, if you’re still concerned about fraud or accuracy… hire another attorney to verify the first one’s work. It may be worth the extra $50 it will cost.

Good luck!