Costa Rica Real Estate, from Coast to Coast, the Right Way!!!

By Ivo Henfling for The Easy Times

You are ready to purchase Costa Rica real estate and you want to take the property off the market by depositing the earnest money. Where do you deposit that money? Does it work the same as it does back home? In another article about the use of escrow services when buying Costa Rica real estate, I pointed out that you have several options of using escrow in Costa Rica (or trust account) when you have made the choice of the property you plan to purchase. Some real estate agents in Costa Rica has a different opinion about what should happen with the earnest money when the buyer and the seller sign a reciprocal purchase – sale agreement, but I’ll leave it to you, the buyer to make the right decisions. These articles are only meant as a guideline for the buyers and sellers alike, in a country where there are no defined rules and licensed real estate is not obligatory.

What are your options when you have to choose your escrow agent?

Escrow agent – real estate attorney

Most attorneys and notary public in Costa Rica do all kinds of law and few specialize in real estate. Of course they will all tell you they can close your real estate purchase. It's like a a heart surgeon also doing skin replacement. My suggestion is to find an attorney who specializes in Costa Rica real estate and one who speaks English, unless you speak Spanish well. Your AE real estate agent will be able to give you a list of attorneys to choose from.

Many real estate attorneys in today’s market try to stay away from keeping an escrow account for their buyers and sellers. The reason is that SUGEF, the organization in charge of controlling the financial sector of the country, wants “those” who keep an escrow account, to file a lot of paperwork and go through a lot of red tape. With “those” I mean, real estate attorneys, real estate agencies, title companies and Costarican banks and financial institutions.

These controls are mainly in place because of money laundering. Real estate agents and real estate attorney don’t want to be held responsible where your funds came from. So you will need to show a nice a clean paper trail where your money came from, which no doubt you will be able to do with no efforts. It is just a matter of knowing who you are and where you got the money to pay for the property.

Escrow agent - Title Companies

In all my years of working as a real estate agent, every time I work with a title company, it’s a bummer. For some reason, title companies in Costa Rica don’t understand the importance of the client nor the real estate agent involved, at least in my experience. Last time I had to deal with a title company in Costa Rica was because the closing attorney didn’t want to get involved in keeping a client’s money and we were sent to Stewart Title. They did everything right until they had to return the leftover money to the buyer. The buyer was not happy. I wasn’t either because they charged me $25 for my commission check. When I confronted the manager with this and asked her if she paid $25 to get her pay check every month, I never got an answer.

Escrow agent – real estate agent

I have seen many real estate agencies hold escrow, especially Remax in Costa Rica and some Century21 Costa Rica offices. I personally feel you shouldn’t give your real estate agent any money because you need an uninvolved third party when you run into differences between buyer and seller.

Most companies will charge somewhere between $250 and $1,000 for escrow services, but I have even seen some title companies charge 1%.

Feel free to leave any questions or comments on this article.

Written by Ivo Henfling, your Costa Rica real estate broker in the Central Valley. If you are looking to buy a home in Escazu or Santa Ana or invest in a condo anywhere in the Central Valley, you should call me. I would like those who are reading my articles are aware of the reason I write them: to transfer as much of my knowledge to the buyer of Costa Rica real estate and have them hire me or one of the American European Real estate group as a buyer's agent as appreciation for sharing my knowledge.

I have been selling real estate in Costa Rica for over 20 years and can show you hundreds of happy buyers of real estate in Escazu and other areas.

In my opinion, a deal is not a good deal unless both buyer and seller are happy. Feel free to contact me.