Guys In The Zone: Costa Rica Real Estate

Part I :: Part II :: Part III :: Part IV :: Part V
The deal that Ruth got involved in with respect to the Michael property is an interesting one that I think will be helpful to detail out just a bit here, before moving on to the next property that we nearly had a deposit on prior to it too unraveling.

The property needed to be segregated from the main, large piece that it was, at that time, part of. This is like taking a whole pie and cutting a slice out of it. For the purpose of the National Registry in Costa Rica, which attempts to register all property, and is where the change of owners of that property are changed, subject to a notarized transaction that we call a land deal, this slice of pie, must be measured and drawn by a certified topographer. The first draft of the drawing is called a croquis, which is an accurate drawing of the new property, but it has not yet passed through the various governmental departments charged with approving such drawings. There are ecological concerns that need to be satisfied with every drawing. Now, instead of one big property, you have two smaller ones. Both need to be drawn, and if put together, will look identical to the original property before it was divided into two. This is the same process, but on a smaller scale, that takes place with a large parcel that is bought and then subdivided.

So, with Ruth’s property, the concept was there, but the croquis had not yet been generated. It was generated by the seller, in that he hired the topographer to measure and draw the lines. The croquis was then submitted to the governmental department called Minae, and they said “no”. Here’s why.

The Costa Rican government has been working towards developing, or merely applying, laws that protect Costa Rica’s nature. There are many laws on the books that already do this, but that aren’t applied. One of the laws has to do with easements around ground water that are used as sources for drinking water. This is a variable measurement that goes from 10 meters, to 50 meters, depending on the size of the waterway. It seems to me that there is an increase of application of this rule lately. Aside from Ruth’s deal, I know of another developer that was about to close on a 7 lot deal, that all of the sudden, was a 4 lot deal, since 3 of the lots were now rendered un-developable.

This is what happened to this perfect piece of land that we found for Ruthie to purchase and then put her house on.

In both of the above stated cases, one being Ruthie’s property, and the other being the 7 to 4 lot deal, the ground water that affected the deal may not, in fact, be year round, and may not be used as a source for water by anybody. In the past they were useful as watering holes for cattle, and so they show up on the radar. But for the purpose of the law, well, these were not scenarios that the law was trying to negate. There would be no adverse affect of these properties being developed within the distance that they were from the water.

To deal with this conundrum, the seller must wait until the dry part of the year, and see of the water dries up. If it does, he will take an inspector from Minae out with him to note the fact, and he will then be able to get his plans surveyed. It is also possible that the property has an approved survey that doesn’t show the water way on it. It may be older or whatever, but this can be used to get the building permits which then gives the land owner the right to build on the property.

Now, here is the buyer beware aspect of this scenario that I’m going to share with you. Lets say that the developer that had the 7 lots under contract wants to go ahead and purchase the lots and sell them as lots. He can do this. There is no law that says he can’t sell the 3 that are inside of the ecological easement surrounding the water source. The law applies to whoever it is that decides to build on that lot. So, the developer can go ahead and make his money, but the end user will be sitting on a piece of property that they can’t build on, rendering it valueless.

This is not a scandalous scary thing though. It’s simply good to be informed.

The problem presented by this law will be discovered in the due diligence phaseof the land buying process Costa Rica, as it was in Ruthie’s case.

Lets say that you have decided on a piece of land. You should put your 10% down, into the escrow account of your lawyer. This deposit is protected by an Offer To Purchase document (OTP) that outlines the deal and is used to put the buyer and seller in agreement. With this document, the seller is re-assured that the buyer is serious and isn’t frivolously shopping around and putting lots of properties under such an agreement so that they can later on decide which one they actually want. The document also assures the buyer that if someone comes along with a better offer prior to closing, that the seller is still bound to sell to the buyer.

The document is binding, and in most cases, non-refundable. The trick of the deal in this case, is the contingency part of the document. These outline any concern that the buyer may have. This is a bit of a side note since I would venture that most of us realtors don’t have this water source easement law in mind when we draft these OTP docs up. I mention the contingencies mainly because this is really helpful to know about for when buying land in Costa Rica. If you find a property that you like, but you are unsure about something about it, say, the road access, or maybe there is a concern over an easement running through the land, or whatever. But you want the land. Tie it up with a deposit, and with a well written OTP that has as a contingency the concern in question which, if it remains un-remedied by closing, or by some time period defined in the OTP, will render the deposit refundable. In this way, you can secure your land here with the full intention of buying it, even if you are aware of a problem that needs solving.

But what about this little problem of the water source easement issue. This is a problem that you, nor your real estate agent are likely to be aware of.

Starting from the time that you put your deposit down, there is a due diligence period, where your legal counsel will work your property in a legal sense, making sure that you are not buying a piece that has a lien or some other encumbrance. Your lawyer will also make sure that you can use the property for the purpose which you intend to use it. It is in this process that the ecological easement can be discovered. I have seen it work, so no worries, but now you know and can be that much more secure as you move through the process of buying land in Costa Rica )

Part I :: Part II :: Part III :: Part IV :: Part V So we set up a viewing of the lot that we seem to be homing in on. It is located up in Lagunas which is one of the more developed areas of Dominical Costa Rica. Lagunas is a large ridge that runs parallel to the ocean. You get to it by driving from the coast towards San Isidro just 5 or so minutes, and then turning and going up in altitude along this ridge. There are numerous houses up there and quite a number of permanent residents there.

When we get to the property, Michael shows us around. It is, in a word, perfect. There is a lovely view of to the north with lots of white water. You can see up to Manuel Antonio that juts out into the Pacific like a dock out on the horizon.

Ruthie is excited and proceeds to start designing her house on the lot. Michael is excited because he is going to be able to bypass the whole speculation cycle and get the house into contract before he has even broken ground. Just one problem, the lot needs to be segregated from the main property. Well, this really isn’t a problem, it just needed to be done. I have personally done quite a few deals where the lot wasn’t yet registered, or as in this case, hadn’t even been drawn yet.

I’m no expert in law but, it seems to me that legally speaking, 2 people can agree to anything. Now, in this case where the buyer can stand on a property and see what it is, and the seller is desirous of selling that property, there is a legal means whereby the two parties can achieve this objective. The buyer wants to tie up the seller so that they can’t take another and perhaps better offer in the future, and the seller wants to know definitively that the that buyer isn’t going anywhere. Such are numerous land purchase agreements in the Domincal Costa Rica area, especially since our land boom started here. It is interesting to note though that in a legal sense, the property does not exist yet. So the relationship is pretty much conceptual, although it is based upon existing dirt, or as we say, real estate.

Actually, it wasn’t these concerns that caused the eventual unravelling of this seemingly perfect deal. Neither of the parties involved in this deal had any problem with the fact that the property didn’t yet exist and the process was started with our well seasoned attorney here to contract to buy the soon-to-exist lot.

What did end up killing this deal was a concern that resulted from a recent law change. Actually, it may have been more of a decision on the part of Minae, the Costa Rican land use agency, to start applying the law, I’m not sure which. Again, I’m not an authority on law. But the new arrangement had to do with increasing the easements around an existing water source. Below the lot in question there is a creek, that in the past had been used as a water source. Since then, things have changed and for half of the year the creek doesn’t even have water in it, but the law was still being applied to it. This hurt Michael in his objective to segregate his lot, although I understand that he now has it worked out and is going forward with his speculation plans. It also pushed Ruthie out of her comfort zone so she pulled out and went back to the drawing board.

Deals are fragile here, as I guess they are anywhere. But in the effort to make sure that everything is in order: the roads, the water systems, the electrical, the easements and so on, we frequently are called on to do a considerable amount of legwork into Costa Rica’s registration system. In this case its too bad that things couldn’t be worked out since there was a great synergy between the parties.

But Ruthie remained undaunted and off we went to look at more houses, and we found one.

Stay tuned…

The ongoing account of a 70+ year old woman as she buys land in Costa Rica, builds, and relocates.

Part I :: Part II :: Part III :: Part IV :: Part V
Well, the next day we are having lunch at what was to become Ruth’s favorite lunch place in Domincal, La Parcela. La Parcela sits out on the point of Punta Dominicalito, so you are nearly surrounded by wave sounds, but you are high enough above them to where they effect a perfect background to conversation, with is the way Ruth likes it since she is the gran maestra of conversation.

So there we sit, enjoying a lovely lunch of Tuna, slightly seared on a bed of pasta with some kinda seasoning that my palette finds most agreeable, but with not nearly enough wasabi for this heat seeking tongue of mine. They were all to happy to bring me an extra serving of the green fire to further enhance my dining pleasure. Ruth is saying that she feels that maybe finding a house isn’t going to work for her and that she is going to have to build, and that since that is the case, she would like for Michael, the recurring builder that we had run into the day before, to build it for her. She liked him, and his work.

So whats available in lots that allow for a house to be built and stays within the budget. No worries there. We’ve got a number of options that fit this criterion, more so now that we are liberated from the “already built” restriction… when in walks… guess who… Michael the builder.

“Serendipitous” is the way Ruthie put it.

Michael joined us and we got acquainted, which only served to further bond Ruthie to him. In the course of the conversation, and as Ruthie’s plight came into focus for Michael, he mentioned that he has a lot that he had intended to build on as a speculation for resale. It sounded like it was the right size, we knew the location to be perfect for Ruthie’s needs, and it seemed as though the price that Michael had in mind was right in there where it needed to be for Ruthie.

One of the reasons that I wanted to write this account of Ruthie buying here is that, these sorts of seemingly chance happenings, are the way things work here. It helps having someone like Ruthie along since she is definitely “game”. I think that her motto must be “lets go!”. But really, it is simply a good way to live and get along in Costa Rica. Give it a try, expose yourself to the system and see what comes up.

In my former life as an art dealer, I used to love an ad that showed a guy from the back left side, standing holding a rain coat open with bare legs poking out below the bottom of the coat, standing in front of a piece of public art, a sculpture in a park, with the words “Expose yourself to art” in the caption. Well, in the same way, this is a good way of viewing a move to Costa Rica, starting with the real estate acquisition process. Expose yourself to it. Put yourself out there and see what happens.

Now, this story is, as I type, in progress. We have not totally resolved Ruthie’s land needs as of yet, but almost.

Stay tuned.

This the account of a 70+ year old woman, buying a property in Costa Rica and building on it.

Part I :: Part II :: Part III :: Part IV :: Part V
The hope is that the details of this tale will help others who wish to do something similar, but are in the dark as to how to proceed. You can start the series by clicking “Ruthies Project”, then “Ruthie’s Project II, and so on, in the menu to the right.Before going into the second phase of Ruth’s Sojourn, I wanted to expound a bit on the jaunt that we took up into the Guapil Estates development on day one. I think that this merits mention since readers of this account will hopefully be able to glean some helpful pointers on a project here that they might want to embark on.

Guapil Estates is one of the finest developments in the Dominical area. It was conceived of, and developed prior to the land boom here. As is the custom with real estate booms in Costa Rica, and elsewhere I’d imagine, the lot sizes have gotten smaller and smaller. Guapil Estates was done at a time when the lot sizes were large. I’d say that 12 acres is the average up in there. The views are screaming northerly views – white water all the way up to Manuel Antonio. So, I’ve got two listings up in there that we looked at in a downpour. I remember Ruth out in her pancho. I gotta tell ya, I’m impressed.

Anyway, the short story of it is that Ruth has decided to go with an existing house. But we didn’t know this at that time.

Day 2: All along the way we are talking, of course. I know that I can talk, but after meet Ruth, I don’t think so any more. Ruth doesn’t let the conversation die. What’s cool about this for me is that, Ruth has a bunch of years on this planet, observing and participating, with an emphasis on the participating aspect. Ruth has concluded that her particular part of Florida has died as respects nature. She also is quite certain that the political situation is on the outs as well. This is getting to be a constant feature in my conversations with people who visit from the States. They say that it is a sad state of affairs there, but boy has it been good for my business.

So, with our ever clarifying focus, we now are feeling like a community would be good, and that an existing house would be good, although we are not opposed to building, should all things point to it.

The Lagunas area beckoned more than anything. Although, I felt that there were a couple of properties along the way between Dominical and San Isidro that would serve Ruthie’s needs as well. I felt that being near to San Isidro made good sense with respect to proximity of services and medical facilities. Lagunas is a well developed enclave of foreigners, with many being full time residents. It is also the area that has the largest selection of built houses.

So, off we went to Bill’s house, up in Lagunas. Bill’s house is a 3 bedroom, 3 bath, single level house that reflects Bills affinity for, and capability with, fine wood working.

While we were there Michael came in. Michael built Bill’s house and was stopping by to do some maintenance. Ruth and Michael hit it off immediately. They talked quite a bit and Michael was all too happy to share the quality secrets with which he had built the house. Parting company was sad but we finally managed. As we drove on to the next house, Ruth expressed her desire to use Michael to build her house should she end up building a house in Costa Rica.

Continuing on, we went to Sunrise Glory. A lovely home on a large piece of land with a teacup view of the ocean, and Ruthie loved it but… it wasn’t for her. While we were there, the contractor who had built the house showed up. Sounds like a coincidence doesn’t it? Well it was, especially since the contractor on this house was the same as the contractor on the last one – that’s right – it was Michael. Ruth felt this to be rather serendipitous. So, after a bit more chit chat, off we went to see what else there was to see.

Fast forwarding now to the next day, we are having lunch out on the point at Punta Dominical. The restaurant is called La Parcela. This came to be Ruthie’s favorite lunch spot. It is a nice place. I could tell that Ruthie was starting to wonder if she was going to be able to find anything. So as we are there, taking it all in and discussing where to go now, she didn’t feel that any of the houses on the market at the moment were for her, so we were stalled. In that conversation she said “I guess I’ll have to build. Lets find a property and then I’ll see if Michael is available to build on it for me.”.

Within 5 minutes, Michael walks into the restaurant.

Now Ruthie is sure that this is a meant to be kind of thing. Even me, a definitely not a “meant to be” kinda guy, started to wonder about these chance happenings. Michael and I have lived down here for years and hardly know each other due to running in different circles. 3 times in 24 hours? Hmmmm.

So we invite Michael to join us. He had overheard some of our conversation with respect to Ruthie’s plight. Buying and existing house in Costa Rica was not turning out to be such an easy thing. There just isn’t that much to pick from, at least not in the Dominical area.

Michael sort of sheepishly mentions that he has a property that he is getting ready to build a spec home on (a home built on the speculation that it’ll sell). The property and house would likely be in the price range of Ruthie’s budget. Well, needless to say, Ruthie is now excited, once again.

To be continued

A step by step account of a single, older, woman’s project of buying land in Costa Rica, and then re-locating to that land.

Part I :: Part II :: Part III :: Part IV :: Part V
Living in Costa Rica has been such a life enriching experience in so many ways. Socially, culturally, spiritually, family, and even in a business sense. Of course all of these “life’s categories” have blurry borders and tend to run together like watercolor. But it helps to sort my thoughts out when talking about my experiences here to put things into categories. This is perhaps a strange pre-amble to the account about Ruth and her search for real estate in Costa Rica, an account that I am about to relate, but its what hits me, so there you have it.

Costa Rica is a marvel in itself, and one can write about it’s wonders. Something as mundane as seeing a toucan for the first time, it can touch the soul to see something so strange. Sloths, waterfalls, life-altering sunsets, Costa Rica offers them all. The thing though that I find the most wonderful, strange, fascinating – is being in a part of the world where people come visit, and feel that it is what they have been looking for all of their life. Making the move to Costa Rica involves knowledge. The knowledge comes from research, study, and talking with those who have made the move themselves and are willing to share their experiences. This makes for never-a-dull-moment kind of living, and one that I find intensely rewarding.

One day, I get an e-mail from Ruth. She, like so many others that I correspond with, would like to re-locate to Costa Rica. The unique thing about Ruth, is that she is 71 years old, and single, a widow. I am quickly impressed with the lucid intelligence that Ruth brings to the project of buying land in Costa Rica. She started with the blank canvas of the idea to relocate to Costa Rica, and has proceeded with the initial broad strokes, that of researching, at great length, the Internet’s resources for guidance on buying land here. She then made contact with me as a result of Domincal.biz, and then with no hesitation whatsoever, came down to Costa Rica to put her feet on the properties.

Where we are at currently with her project is, a very ambitious pre-construction deal. It may be that, as the drama unfolds, there will be some twists and turns along the way, and that we end up in a totally different destination than what we currently predict as happening. I, and Ruth, are hopeful that in the relating of this account as it unfolds we can provide information that others find helpful in their efforts to buy land in Costa Rica.

Ruth had originally hoped to find an existing house, which in our particular market is not so easy. There is not a lot of inventory to choose from with respect to built houses. So, via e-mail we considered what there was, and decided that there were a couple to consider, but it was starting to lean towards Ruth buying some raw land, and then contracting for the construction of her house for her. It should be noted that Ruth has a health limitation that dictates that she have a single level home. So, this almost demands a custom solution for her when it comes to the “right” house for her.

Ruth and I met at her hotel in Manuel Antonio and headed out to lunch where there was a non-stop stream of conversation about the project at hand, as well as initial considerations of the various facets of moving to Costa Rica. Insurances, health care, cars, importing, phone service, and residency – the topics flew.

We set off for the drive back to Dominical, which we punctuated with visits to various properties along the way. The road is a bumpy affair, but it is currently, as I type this, being repaired and so it is in the best condition that I have ever seen it, but still a ways from being paved. We stopped off at the Hills of Portalon development. Then we stopped by a couple of other options all along the way that feature monster views up to Manuel Antonio, white water, lots of hills and valleys – great views. Ruth decided that these properties were a bit remote or that the accesses were too long for her needs. We felt that having community around was a prudent guideline for her particular situation.

So, with no further ado, I took Ruth to her hotel, Villas Rio Mar, where she discovered that, despite the bristly sheets, and her accelerated level of excitement at having found this part of the world, and the prospect of making it her home, she had a good night’s sleep.

To be continued …