The Costa Rica Real Estate Purchase Process
I get asked this all the time:
“How does buying property in Costa Rica compare to the U.S. or Canada?”
Short answer:
There are similarities… but there are also some very important differences.
After more than two decades living here and helping clients through the process, I like to break it down into 4 simple steps.
Step 1 – The Offer (LOI)
In Costa Rica, offers are usually made through something called a Letter of Intent (LOI).
This is not a formal contract—it’s more like a written handshake that outlines:
- Price and terms
- Earnest money (typically 10%)
- Due diligence timeline
- Closing timeline
There’s no standardized form like in the U.S., and no deposit is made at this stage.
Important to know:
👉 The LOI is generally not legally binding
👉 The property may or may not come off the market at this point
It’s simply the step that gets the deal moving toward a formal contract. However, it is backed by the "good faith" of the parties and should not be entered into lightly.
Step 2 – Contract & Escrow (SPA)
Once the LOI is agreed upon, an attorney chosen by the buyer drafts the Sales & Purchase Agreement (SPA).
This is the real contract—and it is enforceable.
At this stage:
- The buyer sets up an escrow account
- The earnest money deposit (usually 10%) is wired into escrow
- The due diligence period begins (typically 30–45 days)
Escrow is essential in Costa Rica—not just for security, but also for compliance with banking regulations. Buyers will need to show documentation on the source of funds.
Step 3 – Due Diligence
This is where you verify everything before committing.
Typical items include:
- Home inspection (if there’s a house)
- Survey verification
- Title check by your attorney
During this period:
👉 The buyer can walk away for any "legitimate" reason and receive their deposit back
👉 Once due diligence is completed and approved, the deposit becomes non-refundable (“goes hard”)
If issues come up, they’re negotiated—repairs, price adjustments, delays, or sometimes the deal is canceled.
Step 4 – Closing
After due diligence, closing usually happens within about 2 weeks.
During this time:
- The remaining funds are wired into escrow
- The closing attorney prepares the deed (“escritura”)
- The transaction is finalized and recorded in the National Registry
Costa Rica closings are actually simpler than in the U.S.—typically just:
- The escritura (deed)
- Escrow disbursement instructions
What About Closing Costs?
A good rule of thumb:
👉 Around 4% of the purchase price in closing costs (transfer tax, stamps, notary fees).
This is usually split 50/50 between buyer and seller, but it’s negotiable.
Buyers should also budget for due diligence costs (roughly another ~0.5%).
Final Thoughts
Every deal has its own nuances—but this is the general roadmap.
The key isn’t just understanding the steps…
It’s knowing how to navigate them correctly in Costa Rica.
That’s where experience really matters.
👉 If you’re thinking about buying here and want help mapping out a smart approach, feel free to reach out to me directly on WhatsApp.
Happy to point you in the right direction!
