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Buying Real Estate in Costa Rica

Costa Rica is a land of sunshine, educated and friendly Ticos (as the Costa Ricans are called), and affordable prices for real estate and cost of living. The country offers its residents 23 distinct climates to choose from, one of the highest standards of living in Latin America, and an amazing natural exuberance which includes: 1) more bird species than the US and Canada combined, 2) beautiful tropical plants littered about the land, 3) exotic tropical wildlife popping up when you least expect it, and 4) incredible sunset, ocean and mountain views around every corner.

All of these attributes have led many businesses, retirees and professionals to relocate here and enjoy the ‘pura vida’ (pure life) that Costa Rica offers. If you are considering relocating overseas or investing in real estate in a foreign country, here are some steps you can take to make your purchase a success and to avoid the most common traps.Sunshine Syndrome

This is the number ONE mistake people make. They visit a tropical paradise on vacation and start thinking how great it would be to live like this. So they stop in the hotel lobby or duck into a real estate office where they see flashy presentations, smooth salesmen, get a lot of promises made and end up making a purchase that they regret. While I personally know couples who have seen a property, bought it the same day and are as happy as the people in a toothpaste commercial, not every purchase works out that well.

Here are some thoughts to think that will help you avoid falling into the sunshine syndrome:

1) ‘If it’s too good to be true…’ This is not just a cliche, it is a hard fact. Real estate has a particular value because of location and many other factors. If the price is unbelievably cheap, there must be a reason. Make sure you compare apples to apples!

2) ‘A special price for today only’ ‘I have another buyer in the wings (offer on the table, this won’t last very long at this price)’ You must take a fatalistic approach to buying real estate, particularly in a foreign country or vacation area. If it is really true, then so be it, it just wasn’t meant to be. Take the view that the Universe is working in your favor and that property wasn’t right for you or your ‘karmic destiny’. You almost certainly can find another comparable property elsewhere. This is particularly important if you have not looked at any other properties! When you have looked at your market and are ready to make a well informed purchase, you will be able to make a snap decision (if necessary) without any pressure from the seller or salesperson.

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3) ‘Vacation – by definition – is an escape from reality’ This is vitally important. Who hasn’t vacationed at a lovely hotel on the beach and fantasized about living like that? Well, unless you are going to move into the hotel, you have to keep in mind that vacationing on the beach and living on the beach are two entirely different circumstances. That’s not to say that living on the beach is not a blast, it is! It’s just that you can’t think that it is the same as going to the beach on vacation. You have many pros and cons and you have to know what they are and how you will be able to cope with them. That means that you have to take time to do your homework and make an informed decision, this is true whether you move to Costa Rica or another country and whether you intend to live on the beach or in the mountains or in the city or in the country. Following are some of the steps and considerations that doing your homework involves.

Choose your area well

This involves carefully analyzing your wants and needs. Maybe living in the jungle sounds romantic, but can you really do without cable TV, Internet, electricity and neighbors? Owning that remote shack on the beach just won’t be possible if you have kids that need to go to school. Are you relocating for retirement, business or to immerse yourself in a new culture? What kind of climate are you interested in? Most areas outside of Escazu, Santa Ana & San Jose tend to have small expatriate communities, so the atmosphere is very much like a small town. You need to know the expatriates in a particular area to see if they share your interests and outlook. For example, if a particular beach town is full of ex-hippies reliving the 1960s, and you are a Mormon evangelist, then that situation probably will not work out no matter how much you like the home for sale there.

Prices – Tico Homes vs. Gringo homes

Old adages: ‘You get what you pay for’ ‘There’s no such thing as a free lunch’. If you read a bit of Spanish you can look in the local papers and find inexpensive properties for sale, say from $50,000 to $100,000. If you look in the English language papers and on the Internet you will find that most homes run from $90,000 to $ 350,000 and more. This has led to the misconception that there are ‘Tico’ prices and ‘Gringo’ prices. While it isn’t unknown for locals to raise the price once a buyer appears, or when they hear a foreign accent, the real price difference comes from the features in the home and the market it was built for.

A simple example is that most ‘Gringo’ homes have a hot water tank and hot or cold water taps in every sink. Most ‘Tico’ homes have cold water everywhere except for the shower (many ‘Tico’ homes also do not have a single bath tub either, only shower stalls). Obviously running heat resistant piping throughout the home is more expensive. If you go and look at the homes you find in the local papers you will spend a lot of time looking at homes that don’t have a lot of features you see as indispensable, or worse you will actually buy one only to find out what is missing later. This is a great reason to use a realtor who is used to helping foreigners relocate to Costa Rica.

Use a Realtor – Judge the seller

Don’t rely on the seller to tell you what the neighbors are like, what the building codes are and so on. Once you narrow down the field you should spend time at the property on different days of the week and times of day. Be certain to judge carefully who the seller is and why they are selling.

A reputable Realtor is a real bonus when you buy property in Costa Rica. Most homes are custom built and they know the builders in their area and what kind of homes they build. They can explain to you the sometimes confusing building codes, and help you determine what area and kind of property suits your needs, budget and personality. A good Realtor will have a ready network of people you will need to know in order to make your relocation go as smoothly as possible, such as a good mover and customs broker for bringing your household items into the country. You will save time finding the property of your dreams, and your Realtor can help you save money in the closing and negotiating phase too.

If you would like more information about real estate in Costa Rica, or would like to see properties available for sale, visit www.american-european.net

Submitted by Russ Martin, American-European Real Estate Costa Rica.

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