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I have some home purchase advice that I’m sure you’ll like. My wife and I learned a lot when we bought our home in Costa Rica, and I’d like to share this advice with you.
I am TicoNuevo and moved to Costa Rica in 2013. This is one of the many blogs I’ve written for GoDutch Realty, and they’re meant to show others a few of my own home purchase experiences. I thought it was time for an update.
This is what happened:
I got a pen and paper and made a list of repair, improvement, and additional projects. Those projects, in our minds, would elevate the house we decided to purchase to “dream home” status. I put my best estimate of a cost beside each item. However, I had no idea of local construction costs and had used a wild#%*guestimate. So, I was looking for expert home purchase advice.
I called on the husband of our realtor in those days, Isabelle Jones. Howard built about ten homes in Atenas, and he could function as a sounding board to help verify my cost figures. Once my numbers penciled out, we reached our decision point.
Armed with assurances and data, we decided to make an offer on the house we liked best. Negotiations continued for a short while. Then, we felt an agreement was reached that was low enough to afford to bring the home and property up to our standards. We also wanted to tackle the projects we felt would have it approach “dream home” status. More on the actual purchase process later. But I will mention that we had a way out of the purchase if the pending inspection uncovered a deal-killing structural defect or another flaw.
No Multiple Listing Service
I pause now to explain that, unlike real estate in North America, Costa Rica has no multiple-listing service, no government-sanctioned real estate agent training or testing, and real estate licenses are gained by paying a fee to the only existing real estate board. Testing is not part of the deal. No preconceived concepts about requirements, customs, or observed standards about realtors, real estate agencies, or the Costa Rica real estate industry exist in Costa Rica. This makes the search for homes for sale not so easy.
There are few government-required forms, industry disclaimers, health and safety tests, forms, clearances, inspections, assurances, or protections associated with purchasing a property. This is changing slowly with reputable real estate agencies like GoDutch Realty. But it is still a bit like the Wild West. It is a “be on your guard” and a “buyer beware” environment when buying a home.
Don’t go on your own
With many differences, language differences, potential pitfalls, and obstacles for the novice homebuyer in Costa Rica, having experts in your corner is a real advantage. It certainly helps give peace of mind.
Having gone through the process personally, my home purchase advice is not to attempt it on your own.
On the buyer’s side, there is no additional expense for hiring an agent when buying a home. And my advice would be to avoid the “For Sale By Owner” properties. Unless you’ve successfully made several property purchases in Costa Rica and speak their language.
Here’s an example of what I’m trying to explain. I read that the Costa Rican National Registry, which tracks and records titles for all properties, shows titles for about 5-10-% more land than what exists. This means that there is definitely some title overlap. This could definitely affect your real estate purchase and having a clear title down the road. So, home purchase advice from a surveyor can also be a must.
Home inspection
We contacted the gringo building inspector/contractor recommended by GoDutch Realty for our home inspection. As I mentioned in my last blog, there aren’t many home inspectors. And even fewer are qualified to inspect with an eye to North American building standards. Oh, and you want to communicate and have your report in English? We negotiated by phone and email. We wound up paying an extra travel fee to get him out of his normal territory to perform the inspection. I remember the entire home inspection, including travel fees, was $450.
I must digress slightly to explain the limitations of even a “thorough” home inspection. Any inspection, even in the U.S., is limited to a visual surface observation, and what home functions and mechanics can be tested with limited access and time. Only suppositions about what is inside a wall or under the ground can be made from observations about what is on the surface. Or with the aid of architectural drawings if they are available. Also, building standards and construction methods are very different here than in North America.
For Example
The house has two attics, one on each side of a high-ceilinged central room, but only one attic has access. It sounds crazy that anyone would build an attic without access, but it is probably not that unusual by Costa Rican standards. Based on observations made inside the other, the inspector had to make suppositions about the sealed attic space. Running a water pump for a few minutes doesn’t prove how it will operate under continuous use or how rusted and worn inside the pump may be.
The report
The inspection took half a day, and we received what, I would say, was a very full report of many pages with color photos. The inspector had a checklist of things to be checked. We also had already informed him of our structural concerns, the roof, etc. All needed and suggested repairs were itemized and detailed with photos. The inspector’s other concerns were noted and detailed with photos where applicable. What wasn’t mentioned were several other surprises, some of which will be a topic of later blogs. So, keep track of my stories in the future.
The green light
The inspection basically gave us the green light to proceed with the purchase. Armed with a purchase agreement, we gave the okay to continue with closing. This agreement showed repairs and improvements allowed. Now we had assurances from an architect, a contractor, and a North American building inspector that there were no major structural issues. We’re delighted we got all this home purchase advice that made us comfortable moving forward with our purchase.
The Author
The author of this blog, Ticonuevo, is a US expat who moved to Costa Rica and used the services of GoDutch Realty to purchase a property here. In his blogs, Ticonuevo describes his experiences of moving to Costa Rica, buying a house, and starting a new life.
