Thinking of buying property in Nosara? Then you should probably read this!

Posted on July 16, 2014 by admin

You’ve beat out the other offers, won the highly coveted acceptance of the seller and finally agreed on a dollar figure. It’s finally time to pull the trigger on the home of your dreams. What could possibly go wrong?

Many of the foreign clients who come to Remax Nosara share similar concerns about their Costa Rica investment plans. “What are the potential legal pitfalls of investing here?” is an issue that concerns everyone we meet. Rest assured that with the right people to guide you, the process of buying real estate should be neither intimidating or confusing. Remax Nosara has written the following property buying guide to outline the best and safest ways in which to invest with confidence so you enjoy your investment for many years to come. The following steps serve only as an informative guideline. You don’t have to be an expert on these. Remember that Remax Nosara is here to handle the hard work so you don’t have to.

Property types

Much like the US, Canada, and Europe, property types available to buyers vary. Understanding the different property types available is an essential component of the buying process. The main property types are:

A. Fee simple

This is by far the most popular way to own property in Costa Rica. The concept is the same here as it is in the US. Fee simple ownership gives the buyer total ownership of the property to enjoy as they see fit. Providing you conform to Costa Rican law, the owner may sell, lease, improve or develop the property according to their wishes. The fee simple option affords buyers a high degree of legal rights and represents the easiest and most convenient method of ownership. Interested in a fee simple lot / property or home? Click here to contact us.

B. Properties in condominium

When first time visitors to Costa Rica hear this term they often think of condominiums in the form of apartments, units or townhouses. In Costa Rica, however, “Condominium Law” exists in relation to the development of certain types of properties including condominiums, family homes, and finished lot projects. “Property in condominium” ownership is similar to “fee simple” ownership but usually carries developer-imposed restrictions designed to maintain both the integrity and aesthetic value of a property. Looking for a Nosara condominium? Click here to contact us and get your search started.

C. Time share

Much like in the US and Europe the time-share option grants ownership of the property to different individuals for certain weeks of the year. Time-share resorts represent a low cost way of owning a property and are becoming increasingly common in Costa Rica. Remax has a wide range of time share options. Click here to find out more.

D. Untitled property

This is the type of property that a smart realtor wisely steers clear of. Unless you are comfortable with the idea of a long, costly legal battle which you may ultimately lose, then our advice is simple: avoid at all costs.

E. Maritime zone

This is an area where legal issues become complex. Property within 150-200 meters of the ocean is subject to strict legislation and there are restrictions on foreign ownership. Land within the 150-200 meter zone is known as concession land. While it is possible in some cases to purchase the right to use concession land, any form of development is dependent on stringent legal measures.

Let’s assume you have finally found the home of your dreams. Now for the paperwork. The following procedures outline the steps that you must take to safely and securely purchase a Costa Rican property. But first, in order to protect yourself while negotiating the obstacle course of paperwork and potential red tape, you will need a lawyer. Technically, a lawyer is not required to purchase property in Costa Rica. However to avoid the possibility of being ripped off, then the answer is simple: find a good lawyer. Costa Rica is awash with all kinds of lawyers so finding one isn’t difficult. Finding the one that can meet your specific needs may be a little trickier. As with every stage of the buying process, Remax Nosara is here to point you in the right direction. If you choose to find a lawyer independently look for the following:

Notary: Although a lawyer (particularly a property lawyer) may also be a qualified notary this is not always the case so it is important to check beforehand. A notary is required to register the property with the Costa Rican National Registry.

Bilingual: All contracts will be in Spanish and unless you speak the language perfectly you will need a bilingual lawyer capable of word perfect contract translations.

References: Speak to people whom you trust who have previously bought property in Costa Rica. If they point you towards someone they can vouch for, ask that lawyer to produce recommendations received from previous clients.

Forming a corporation

When purchasing property in Costa Rica, Remax Nosara advises that it is done in a corporations’s name. Not only does it simplify the entire process, it can lower capital gains tax and allows for increased flexibility in future transactions and other matters. If you do not own a corporation then rest assured it is much easier than it may sound. Remax Nosara will be happy to help guide you through this process. The basics to setting up a corporation are:

Choose an original name
Appoint a board of directors consisting of a president, secretary and treasurer (Initial incorporators may occupy these positions).
Decide on the capital profits of the corporation and how that income will be divided among the incorporators.

The following contains the practical steps prior to signing. If you have by this time hired a reputable lawyer then you can feel confident that the following aspects of the buying process will be handled efficiently by them.

Title search: Each property carries with it something called a ‘folio real’ number. This number is specific to one property and is an essential requirement when researching whether the property is free of debt or liens and is not subject to dispute.
Compare the plano (land survey document) with the information turned up by the title search to make sure the details are verifiable.

The building of a structure on your land requires a ‘use of land’ (suelo) letter from the local municipality indicating this is legally possible.
Check whether the land or property comes with basic utilities such as electricity, telephone and running water.
Submit an offer taking into account the items present on your last visit to the property. This will ensure that any verbal agreements concerning exactly what is included are adhered to. Often an offer may be written up with a minimal ‘good faith’ deposit that may be be raised to 10% within a month.
The offer must be submitted on a genuine Costa Rican legal document.
Make sure the legal purchase details includes the following:

Full names of buyer and seller.
A detailed schedule of all closing costs
Terms and conditions of sale
A due diligence schedule including provisions regarding what happens if the property fails the due diligence. Lay out clearly the due diligence period and provisions if it fails to pass.
Full payment schedule including amounts to be credited and withdrawn from from the escrow accounts on the agreed dates
Legal description of the property

Before closing:

The seller is obliged to show receipt of payment of any fees attached to the property including:

Any applicable fees such as condominium or HOA.
Receipts showing that utilities have been paid.
Receipts showing that utilities have been paid.

During closing:

The signing of the legally drafted Transfer Deed takes place.
Buyer makes payment as per the agreement of purchase .
In order to update the property tax record, the buyer’s attorney must advise the Municipal Government of the transfer.

After closing:

Buyer’s attorney records the Transfer Deed in the public registry.
When registered, official ownership documents are delivered to the buyer.
Buyer informs the municipal government of the property transfer so that they may update the municipal property tax record.

So why Re/Max?

In a market where the number of self proclaimed real estate ‘professionals’ is increasing at an alarming rate it is crucial that you choose one who truly has your best interests at heart. Remax Nosara understands that the purchase of a new property represents one of the biggest decisions you will ever make. We stand by our commitment to help you find your perfect property within a timeline and a price that exceeds your expectations. We look forward to assisting you with each and every step of the way. If you’re ready to make the move on the home you always dreamed of contact us now and find out just how good we are at making dreams come true.

The must-read guide to selling property in Nosara

Posted on July 8, 2014 by admin

So you’ve decided to sell your property in Costa Rica – what next?

How will you trust a real estate agency to sell your Nosara property? In whom do you put your faith to provide you with the right care and to secure the highest possible sales price? Remax Nosara’s commitment to fully meeting these needs reflects why its reputation with both buyers and sellers is unparalleled. We are here to handle the stress so you don’t have to. However, even with the support of the best in the business, sellers often overlook a plain fact: whether it be land, a house, condo or commercial space, unless your property is the bargain of the century, selling it can be an involved process. This requires first rate management from experienced professionals with excellent communication skills.

Despite the Costa Rican property market exhibiting encouraging signs that the effects of the 2008 financial crisis are now in the rear view mirror, memory persists. Buyers still remain selective about where they choose to invest their life savings. Additionally, at Remax we often find that sellers have the same questions and concerns, and frequently make identical mistakes during the selling process. In order to address this we have put together the following simple guide for those about to place their property on the market. While reading this, also know that the Remax staff is always on hand to assist you directly at any point during the period in which your property is listed with us.

So you’ve decided to sell your Costa Rican property. What next?

Let’s kickoff by highlighting some of the mistakes that we see recurring most frequently, and more importantly, how to avoid them. Some may seem obvious but we feel their inclusion is beneficial to all, particularly first time sellers.

Over-pricing the property:

Granted, it may seem silly to mention, but the fact is too many properties simply aren’t priced correctly these days. Contrary to popular belief, any realtor worth his/her salt knows that their job is not to “sell” a property, and often won’t waste everyone’s time showing it if they consider it overpriced. Another myth is clients with the necessary disposable income to be able to buy a second property are inherently savvy. Often even these people are nervous about buying a home in a foreign country. A great realtor knows that their primary role is to win the respect and trust of clients and allow them to make informed decisions with confidence. Your property needs to sell itself. The first and most important step towards this is ensuring that it comes with the appropriate number attached. Methods of valuation include the following:

Owner’s Value: What the owner thinks it’s worth.
Investment / Income Value: This is determined by the current value of future income from the property and incorporates it into the price an investor would be willing to pay.
Comparative / Market Value: Numbers stemming from data collected on recently sold properties with similar characteristics.
Actual Value: The old adage “It’s only worth what someone is willing to pay for it” applies here. The price reflects the dollar number that a willing seller receives from a willing buyer. In simple terms the price for which the property is sold.
Replacement / Cost Value: This is determined by analyzing the site as a whole. How much is the land worth and what would it cost to build a similar structure (minus depreciation).

If you want to sell your property (as opposed to merely having the property for sale) then pricing it appropriately cannot be overemphasized. Rest assured that Remax Nosara is here not only to help you with a realistic valuation but also to show you how to effectively maximize that value.

Ensure the paperwork is in order

Selling a property requires a number of correct documents. If any of these documents contain errors or ambiguities then administrative problems will occur. When a prospective seller approaches Remax to list with us, we request the following:

The plano
The title deed to ensure the property is free and clear and is not subject to legal dispute.
The original building plans or permits (particularly for new or recent builds).
Municipality declarations. These must be updated every 5 years.
Receipts proving that land taxes have been paid.
Receipts proving that corporation taxes have been paid if the property is held by a corporation.

Unmarked boundaries

While the problem of a property without clearly marked boundaries is a relatively minor one, it is significant enough to deserve a mention here. When viewing a potential property, buyers like to see exactly what it is they may be purchasing. Costa Rican law states that a property must be marked with a fence yet this is often overlooked. As part of the due diligence process, Remax Nosara uses experienced surveyors to mark property boundaries according to GPS data. In a number of cases the GPS data highlights a discrepancy between what the owner thinks the borders are and what the law states they are. Correct title deeds and documented proof of exact border dimensions save time and money.

Basic maintenance

Paramount in the sale of any property is the buyers’ first impression of the place. The frequency with which we receive properties that are a total mess still surprises us. Inexpensive things like paint, varnish and even cleaning are all too often overlooked. The priority for most of our clients is good value, however the way a property makes them feel is also of great importance. In today’s market only a small portion of potential buyers can look past their emotions far enough to envision the future potential of a property. Instead of worrying about how long it will take to paint or wondering why the yard is still filled with junk from previously messy renters, the buyer needs to be admiring the view and picturing themselves enjoying their new life in a fresh, clean environment. The visual appeal of a well-maintained property infinitely outweighs that of one in need of repair. While we receive some properties that require extensive improvements, often we receive many that are are simply in need of some basic, inexpensive TLC. Fixing up a property before listing it is truly one of the best investments you can make and pays real dividends when it comes to selling.

Commissions

While this may seem self-serving to include here, the fact is a number of smart sellers have begun to offer slightly higher realtor commissions than the standard 6%. At Remax Nosara we treat every client with the same high levels of care and attention. However if the possibility exists whereby we may make a little more money from a higher commission on a sale then it follows that those properties will be pushed and promoted that much harder. If your property has been on the market longer than you would like, then a wise alternative to lowering the price may be offering the realtors a higher commission. Showing us that you appreciate our time and efforts is surefire way to guarantee that we will put in the extra effort for you.

So why Remax?

The alarming number of self proclaimed “professionals” emerging to add to the already overabundant supply of Nosara realtors can be overwhelming. Never before has your choice regarding who oversees the sale of your property been more crucial. Remax Nosara understands that the sale of your land or investment property is one of the most vitally important decisions you may ever make. We pride ourselves on ensuring that the selling experience is a positive one for all. We work tirelessly to provide our clients with the necessary edge by offering a level of service that far exceeds our competitors. We consider a relationship built on trust essential to ensuring the satisfaction of all with whom we deal. We take these relationships very seriously and promise you the following:

To follow the instructions you have given us based on the best available information we have given you.
To convey any and all offers made on your property.
To provide honest market appraisals.
To keep you informed at all times.
To maintain full confidentiality.
To always act in your best interests.

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