We are in high season here in the southern pacific zone. The months of November through April are typically when there are more tourists here than during the rainy months.

There is another type of “high season” happening right now as well. This has more to do with world conditions. I know, those from the States are going to think that Mr. Trump is pushing many to look elsewhere. And I suspect that this is true to some extent. I think that Mr. Trump has been good for my Costa Rica real estate business. I think Mrs. Clinton would have been as well. Such is the world that we live in.

However, our property buyers here are not just from the States. We’ve got buyers from Canada, despite their currently weak currency. These people are buying property and essentially paying 30% – 40% more due to the exchange rate on their currency. One has got to wonder – why?

France, Germany, Great Britain – all are providing us here with buyers. Again: why? There are economic, political and security issues happening in various areas of the world. I suppose that greater analytical minds would come up with the cause and effect links in trying to answer the question. But I find that there is one common thread when I talk with these people.

The Reason:
Stress
is pushing, and the promise of less stress, is pulling people to consider a life in Costa Rica. Simpler living is highly attractive. Costa Rica offers this and it (simple living) seems to be the antidote to whatever may be happening in one’s home country.

Uvita, Dominical, Ojochal and the surrounding areas that make up Costa Rica’s southern pacific zone are all seeing an influx of buyers. But there is more. There are some big-money players who are making some moves here that are notable. There are condominium complexes being constructed, and sold at a good clip. There are town homes, urbanization projects and upgrades to some of the antiquated infrastructure in some of these areas.

There is some talk of giving Uvita a facelift. This is much needed. With both Dominical and Ojochal, you turn off the coastal highway and drive into the town. In Uvita, the highway passes right through the town. Up till now its growth has happened with hardly any attention to the aesthetic and it is essentially a strip-mall, Costa Rican style.

This is a pity since Uvita could really have been (or be made to be) one of the most beautiful towns on the planet. So if these well funded entities see the beautifying of the town as in their best interests, great! Although it’s hard to imagine what can be done, short of tearing the whole thing down and starting over again.

The Envision Festival is going on currently. This has become one of the largest events of the year. Kudos to the organizers. I’ve heard that 7,000 people attended last year, but that about half that number are here now.

Uvita Costa Rica's Crunchy Envision Festival

2017 Envision Festival Uvita Costa Rica

Some of the Ticos complain a bit about Envision, claiming that the drugs, nudity and general licentiousness is disrespectful to their culture. I suspect that there is some truth to these allegations, but for me, I’ve never met an Envisioner I didn’t like and the festival provides a time of some fascinating people watching.

I’ve not  personally ever attended. I can hear the music from my home well, the bass notes anyway, and I routinely provide rides to those thumbing to the grocery store and back. There is also the complaint of them being a bit odoriferous, but I can’t speak to this having lost my olfactory sense some years back. So I get along fine with them in my car and always enjoy their upbeat spirit.

So between the time of year and world conditions, sales are good here in the Zone’s real estate market.

About Property Prices:
During the recession, there was not much of a market here. It hit hard and us realtors languished waiting for the anomalous inquiry that might result in a sale. I actually got into brokering hard money loans during this time in an effort to not only make a little commission, but to also help some land owners to not lose their properties.

Prices plummeted during the recession. This was an interesting time. The pre-recession time was a “boom”. The biggest challenge for a buyer then was being able to find an available real estate agent. I felt like I should put a Baskin Robbins “take a number” device at the door. Some of these buyers were our good-old bread and butter retirees, looking to retire to Costa Rica. However, there were lots of folks who refinanced their homes and then found themselves cash-rich and wondering what to do with it. The causes of the recession helped to fuel some of that heady boom and resulted in pushing prices up to a rather silly level.

So the fall of pricing some 40% – 50% during the recession could appropriately be called a correction.

Much of our land here is still at recession pricing. There hasn’t been a big upward push on prices since then. The demand for houses is strong and so we’re starting to see some upward movement there – all very rational though. This is no heady boom. Its simply that the inventory which was glutted post-recession, is finally starting to get mopped up. This was inconceivable in the years following the recession due to the glut.

I still get asked sometimes why it seems that everything is for sale. I find this interesting since I have to really work to find properties for some of the criteria lists I build for my clients.

Yes, I suppose everything is, in fact, for sale, at some price. However, finding what you want, finding that screaming ocean view with good access and amenities nearby, and all this in your budget, can sometimes be a bit daunting.

And then there is that wonderful amenity “simplicity”. I wonder if this could be put at the top of the list. Right up there with “ocean view”. I’m thinking that this one amenity is the primary mover of the current strong market we’re seeing here in The Zone.


How To Buy… And End Up Happy 1


We had an inquiry recently that concluded in a remarkable way. This gentleman said, “I will accept defective land due to lack of funds. (I was ripped off 5 times!).” I had to ask myself, how does one experience being “ripped off 5 times” in a country where the process of buying land it quite simple?

Sky's the limit... but buy smart.

The answer I came up with is… he didn’t have a good realtor.  I understand that there is this idea that you don’t need a realtor in Costa Rica.  It’s not a regulated industry.  The CCBR certification, which both Ben and I obtained in 2009, only means the agent is a resident and sat through four 8-hour days of Costa Rica real estate 101.  I understand the allure to buying direct– from a Tico, or from Craig’s List, or direct from a developer—as a way to save money.   In some cases that strategy works.  In other cases, like the original example above, it ends up costing you much more than the 6-8% a realtor earns in commission.

Your Purpose For Buying

You’d be surprised how many people don’t have a clear idea why they are investing in Costa Rica real estate.

The prospective buyer says, “We’re looking for a house.”

Ben and Rod ask, “Great.  Are you going to use it as a vacation rental?”

The prospective buyer responds, “Oh…. we didn’t consider that.”

The same clarity is required when looking for a raw land, be it residential or commercial.  I’m not going to talk specifically about commercial in this article, as most buyers are looking for a home or a lot to build a home. If you’re going to build a house, you should really have an idea of when you are going to build, and what the area and neighborhood will look like in 5-10 years.  And once again, are you planning on retiring in this new house or probably going to use it as a second home/vacation rental?  Are you going to have a caretaker/gardener/security guard?  Where is that valuable employee going to live?

Usually, these questions are asked and answered before our prospective buyer arrives in Costa Rica. Once they are here, we take them out to view property. I’m going to make a long story short and simply say, when buyers stand on the right property… it resonates with them.  Most of the time, they feel it even before they get out of the car.  This phenomenon is the product of clarity prior to driving around.

The Zone is small, and by that I mean it has a small town feel. News travels fast.  Like a few realtors in this area, we have accumulated a vast database of fact and fiction over our 20 years, collectively.  This is one of the biggest benefits to using an experienced realtor.  We know the history of X or Y development or property, and we disclose it. In fact, there are some developments that we simply do not represent and for good reasons. Also, we don’t over-hype things like the International Airport to get you to buy.

Contracts and Lawyers?

Ok, so you find your dream property. The next step is to write up an Offer to Purchase or a Letter of Intent.  These documents signify the buyer’s desire to purchase the property and outlines the price, deposit, due diligence period, escrow, and contingencies.  A contingency is the fulfillment of specific condition (e.g.- clear title, legal access to water, stable soil determined by a soil test, etc.). If a contingency cannot be satisfied or resolved, the buyer can get their deposit back.  The seller reviews the Offer Letter and often makes a Counter Offer.  Eventually you agree on a price, and we present the Offer Letter to your lawyer. Only problem is… you don’t have a lawyer yet.

This is one of the ways your realtor can save you money.  We recommend experienced, bilingual lawyers that actually return your email and/or phone call in a timely many. I sleep well at night knowing my clients are taken care of by one of these local legal professionals, because I have years of positive experience supporting this recommendation.

The lawyer then turns the Offer into a Purchase and Sale Agreement.  It is usually written in English, and then translated to Spanish to be submitted into the National Registry. All of the details are included in the document and it is reviewed by Ben and I, the seller’s lawyer, and seller.  Once the contract is signed, an escrow account is established.  I will be writing a separate article on escrow in the near future, but this is now required for all property transactions especially for those transferring monies from outside of Costa Rica.

Finally, the lawyer starts on the “due diligence” or discovery phase of the process.  If there is a problem with the title or an easement registered against the property, this is the point in which the lawyer will uncover it. Most of the time these discoveries are either acceptable or can be resolved by the seller.  (In the event that the problem is a deal-breaker, the buyer receives their deposit back.) Once everyone is clear and desirous to move forward, the final deposit (usually a wire transfer to the escrow account) is made. It usually takes 3-5 business days for monies to arrive in the escrow account.

A final closing statement is generated by the closing lawyer.  For more information on closing costs, click here.

Corporations

There is one intermediary step involved in the Costa Rica real estate process that is missing in a U.S.-Canadian-European real estate transaction– setting up a corporation. Virtually everyone owns their property (and automobile) in a corporation in Costa Rica. It’s a legal entity, recognized by the government, that stands on its own. There are two main types of corporations used for real estate in Costa Rica— the Sociedad Anonima (S.A.) and the Sociedad de Responsibilidad Limitada (SRL).  They are similar in function, but here are the main differences–

The S.A. has multiple uses and is a bit more flexible. It must have a Treasurer, Secretary, and President, who are separate people. It must have three registered directors and a controller, who is often the attorney who set the S.A. up and manages the associated protocol books.

The structure of a SRL is similar to the S.A except the shares cannot be transferred to a third party without the consent of the other shareholders who can have first right to buy those shares. An SRL can only have one manager administrator which is very appealing if you don’t want your name to appear in the registry, as it will on the S.A. This is the popular choice for investors who do not have more than 3 partners.

Our favorite part... the closing!

Closing

The last step in the process is my favorite part; the closing.  You, the buyer, fly down to Costa Rica and arrive at the lawyer’s office and sign the final deed and protocol book that gets logged into the National Registry.

Congratulations!  With your solid team of professionals supporting your clear desire, you are the proud owner of property in Costa Rica.

We have great deals in every property category, so please feel free to browse our listings.  The Guys… are here to help.


About Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.


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