Tips on Buying Real Estate in Costa Rica
This was the golden age of real estate in Costa Rica when the economy was at its peak and people where fighting to buy properties as a retirement investment.
Today, the market is a bit tougher as the price of home in Costa Rica has gone up and most of the bargains are over.
The current economy however is now giving potential property buyers a silver lining in the horizon as the price are getting lower and fire sales are becoming more common. The prices of Costa Rica real estate will never get back to its golden age ones but with the lowered prices, they will certainly make the properties more attractive to potential buyers once again.
Using the following information, anyone will be able to breathe a bit easier when it comes time to buy a home in Costa Rica.
How do figure out how much a house is worth in Costa Rica?
Credit: stockphotosThere is no accurate way to portray how much the house you are trying to buy in Costa Rica is worth. Like anywhere else in the world, a home is worth what a buyer is willing to pay for it.
A real estate broker in Costa Rica and the seller are just placing the price of the property based on the price of the other houses in the area and how much they money they have put in the house.
If you were in the U.S. determining the value of the home would be a bit more accurate as they are many sources you can go to get an estimate of the value of the house like banks which help determine the value of the house for you when you try to get a home loan. Banks usually will use the following items to determine the value of a property:
- Square footage of the home
- Construction quality
- Home design
- Your home’s floor plan
- The neighborhood
- Availability of transportation, shopping and schools
- Lot size, topography, view and landscaping
In Costa Rica However, things are very different. In Costa Rica, the real estate agent places a price on a home based on sales of comparable homes in the area which is more of a comparative market analysis.
The home appraisal in set by a bank in Costa Rica does not help at all in figuring out the value of the home because in Costa Rica, a home worth over $180,000 are taxed on a progressive scale where properties were evaluated by their area with certain adjustments for depreciation.
The land figure was based on a square-meter value reported by the municipality with adjustments for the slope of the land.
This does not help at all since it basically means that a beach property that is similar to a property in the middle of nowhere would have the same value.
In the end, it’s up to you to determine the worth of a house.
Credit: meAs anywhere else in the world, sellers will try anything to make their homes more attractive with simple cosmetic jobs as home buyers are obviously more attracted to a nice clean house that looks good with lots of open space.
Here are some of the ways that people will make their house look more attractive
- Trim and clean the yard
- Repaint the house
- Plant flowers
- Show pictures of the house in perfect sunny weather
- Open all drapes to make the house look brighter
In most cases, these cosmetic changes will not add any real value to the property per say but what it does is keep the buyer from raising any issues to take the price down.
What you really want to look for as a buyer when you see such a house that looks too good to be true are wear and tear spots like water marks and such to look for real structural damage.
Furnished or Unfurnished
Some houses for sale in Costa Rica offer a fully furnished home in order to increase the value of the home or just so they can unload their furniture on you so they can buy new one for their new house.
Buying a house in Costa Rica that comes with furniture has its ups and downs but one of the bigger advantages will depend on the type of furniture that comes with the house.
Since Costa Rica is not an island, buying furniture is not expensive. However, if the furniture is imported from overseas like Europe, it may be worth considering paying the extra price.
The main problem is that in most cases, you may love the house and want to buy it but you do not want the furniture and the owner wants to sell the house as is.
Getting a Costa Rica Real Estate Broker or Not
Credit: stockphotoIn the United States, it is not necessary to use a real estate broker as the laws are pretty straightforward and you can find out for yourself about any lien against the house and have your own appraiser check out the house.
In Costa Rica however, buying real estate property is not as cut and dry.
Finding out anything about the house yourself is very time consuming and frustrating as you still end up having to hire a lawyer to find out any dirty secrets the property may have.
It is best to use a real estate broker in Costa Rica for three simple reasons.
· They do all of the paperwork
· They check to make sure the property papers are clean
· All of this is included in the commission fee
If you do decide to use a Costa Rica real estate broker, please make sure that they are well qualified and have been in business for longer than a year.
Also, check with the Costa Rica Real Estate Brokers Board as they will be able to let you know whether certain brokers have good ratings or not.