Recommended Hotel at Jaco Beach

Your Land For Sale

Making sure your land won’t go away

Costa Rica is the place to be right now, and you are not the only person looking for a piece of property in Costa Rica. It is very important that once you have seen the place you want to invest in, and your lawyer has given you a green light to go for it, you sign a Purchase and Sale Agreement, or a Purchase Option. This is a contract by which the Sale person will hold the property for you exclusively and will agree not to commit it to any other person for as long as the contract determines. Usually this contract has a thirty-day term, but can be more or less depending on how complex the transaction is and what you and the seller agree to. Most of the time, you are expected to give a “down payment” or “earnest money deposit” as a consideration for the agreement which is normally held until completion of the purchase. This can be refundable or not, depending on the terms of the agreement.

The deposit amount varies but is customarily in the order of 10% of the purchase price. Usually, this deposit goes directly into the Sale person pocket where he will “hold it” until the term of the contract and eventual closing of the deal.  However, new regulations of the Costa Rican Government have stated that, depending on the type of negotiation held and the nature of the parties (e.g. if the Sale person is a Construction Company), all warranties, good faith deposits and earnest money should be deposited in a third party escrow account.  This is an independent account where both parties, you and the Sale person, will give specific indications to this third party (the Escrow), regarding the way these funds will be disbursed, when and to whom this warranty will be given and under what conditions. Using an Escrow removes any potential for misunderstandings or mistrust. Both parties can proceed with confidence knowing that the funds are protected during the real estate negotiation in Costa Rica and that at the end of it, they will be distributed according to the exact conditions previously established between parties.