Home Buying Mistakes
Last Updated: Apr 26, 2012
Buying a home can be a complicated process, especially in a foreign country. Avoid these common home-buying mistakes when purchasing real estate in Costa Rica.
If you find a seemingly perfect property online but cannot visit immediately, it may be tempting to put down a deposit to hold the property. Fight the urge. Costa Rican real estate differs from that in your home country, so it is very important to visit a property and inspect it thoroughly before making a commitment.
Buying After One Real Estate Seminar
Costa Rican real estate seminars are very common, especially for retirees. These info sessions can be very helpful, and often provide an overview of local markets, cost of living, and other topics. However, the goal of these seminars is to sell you property, and therefore they present you with only the best of Costa Rica. Take time to discover potential pitfalls and frustrations – and how to handle them – before you buy, and you'll be happier in your new home.
Moving too Quickly
After you've identified your ideal community, rent for at least six months to a year. This will give you time to adjust to local life, experience a full rainy and dry season, and determine whether you'd like to make the long-term commitment of purchasing a home.
Not Revisiting the Home Throughout the Day
It is very important to revisit a home throughout the day – early morning, midday, early afternoon, and nighttime. In downtown areas, where homes are close together, you'll absorb the neighborhood's sounds, sights and scents. Also take note of how much light enters the home at different times of the day; during the rainy season, you'll appreciate bright spaces and rain that angles away from the house.
Buying the Biggest Home in the Area
You don't want to purchase the largest, the most expensive, or the least protected home on the block. The most expensive home can be very challenging to resell, while the biggest or least protected home may attract burglars.
Home prices are always negotiable. Speak with your real estate agent about recent sales, the home's time on the market, the seller's motivation, and other relevant factors. Look for homes that have already seen price reductions, and don't be afraid to offer significantly lower (15% less) than the asking price. When a home has been listed many months, is expensive for the area, or the seller is anxious, you may be able to whittle 10-30% off the listing price.
Making an Unconditional Offer
Never make an offer to purchase a home with no contingencies. Common – and prudent – contingencies include making your offer subject to mortgage financing, a home inspection, and selling your current home. In Costa Rica, think about other deal-breakers, like the ability to get a phone line or high-speed Internet.
Not Putting Everything in Writing
It's fine to make a verbal agreement with the seller, but be sure that all terms are defined in a signed contract. This protects your interests and finances for the future, and makes sure there are no overlooked details, like whether the appliances were included in the sale. Have your own real estate attorney draft the purchase offer contract (POC) to ensure all your commitments are well defined and your risks minimized.
Not Having a Bilingual Attorney
All legal transactions will be conducted in Spanish, and foreign-language legalese can be difficult for even fluent speakers to master. Make sure you hire a bilingual, experienced real estate attorney to read through all relevant paperwork. Explain how you understand the contract, and ask the lawyer to clarify any misunderstandings.