Monday, August 6

Buyer Beware - Lesson #1

In the year 2000, I made four trips to Costa Rica in the last quarter of the year with each trip being over 10 days. I had decided that "one day" I wanted to live here and I wanted to buy property close to the beach and wait until I had the money to build on it. I worked with an English speaking lady that communicated with the Tico owner for this purchase and I hired an attorney for all the legal stuff.

Having a real estate license in the State of Florida for over 20 years, I thought I had my bases covered and knew what I was doing. What I didn't know is "things are not like they are in the United States". I was very diligent to have the contract interpreted so nothing would be missed. I had the property surveyed to make sure I was getting what I thought I was paying for. I even had my deposit for the property secured with Stewart Title here in Costa Rica. All my t's crossed and i's dotted, right? WRONG!

I was unaware that a contract in Costa Rica that is NOT registered with the Municipal can be changed. The owner of this property decided that he wanted $10,000 more than what we had agreed upon in the SIGNED and notarized contract. When I contacted my attorney and asked if this was possible he change the price at the last minute, my attorney said yes since I did not REGISTER the contract. I asked him why didn't he do this important final step and he said, "because you didn't ask me".

Lesson to be learned... You can read all the books but there is nothing like experience. I got mad about the whole ordeal and swore I'd never return to Costa Rica. After about a year, I realized it was my fault and I was still in love with Costa Rica regardless of this bad experience. I did get my deposit back but if it had been held in the seller's hands, well, I don't know if I would have ever seen that money again.

When I moved here in 2002 to rent until I found something to buy, the guy that wanted $10,000 more at the last minute came to me and said he felt really bad about what happened. He offered to let me build a house on part of his property to make up for it. "Fool me once...."

I did get to buy my dream house but there again, BUYER BEWARE.
That is another horror story. There is NO DISCLOSURE in Costa Rica. If anyone ever tries to help you by sharing their experiences and they have nothing to gain from your purchase, you'd better listen to them!

This blog's for you, Kim. You can check on-line at to make sure when you do purchase your property that the title was indeed changed to your name/corporation. This is very important and I had a different attorney make this check for me to guarantee that the property title on my house had in fact been changed to reflect my new purchase. People sell the same property over and over here because foreigners do not know to check. You DO NOT need a real estate license to sell real estate in Costa Rica. AND most of those selling R.E. are doing it illegally because they are not citizens of Costa Rica. "Residency" only means you don't have to leave every three months, not much else. If you are working through an agent and not dealing directly with the owner, the agent needs to be a citizen of Costa Rica.
Now that's totally something else to consider when buying property.


Anonymous said...

Been there, get it, and STILL don't have clear title to our property after 2.5 years.

TICA MACHA said...

It's unfortunate but the only people that will relate to this post are the ones that could write their own story of their mis-directed experiences in CR. NO ONE TELLS YOU ANYTHING! It's the school of hard-knocks here but we do learn WELL and we remember.

The others that are "caught up in the magic of CR" will just think I'm being negative. I DO have more stories about buying real estate in CR but I didn't want to put too big a damper on their dreams. We all learn, one way or the other.

Jen said...

AMEN! Personal blogs are invaluabel to the newbies or wanna be newbies! I wish we'd had 'good, honest' info before we were taken by a gringo, one of those without residency. When we look back all the red flags were there BUT we were in love with CR already. Yep, live and learn, and learn it really well the first time. We only took a year to regroup and have moved on as well.

It's not negative to tell the truth. It needs to be told, over and over again. Yes, Costa Rica is paradise BUT there are bad things that happen here. It's how you choose to deal with them that keeps it paradise. I can't change anyone else but I can certainly change my perceptions.

TICA MACHA said...

Thank you so much for your comment Jen. So true. I think for those that never try to purchase property or a home do not know that other side of Costa Rica. When you are on vacation, it is totally different. When you live here and try to accomplish things to move forward, well, there is where the rub comes in. They DO do things differently and we have to adjust quickly or be left behind. The one thing I have learned is tenancity and patience beyond my belief. Thank you Costa Rica. "Pura Vida" means something completely different than what I thought when I moved here. I have changed living here.

Saratica said...

Don't shoot me but I'm getting ready to start selling real estate here. I need a job, this is what I know how to do. At least I know how to work with customers. I have an excellent teacher/"broker" (broker as we know it in the states doesn't mean the same thing here) and looking forward to learning the ways of the land. Maybe I can help someone avoid the dangers - that would be satisfying.

There are actually (I've just learned) a couple of good places to hire to close the sale. One is First Costa Rica Title. They are affiliated with First American Title in the states, one of if not THE biggest title companies in the states. You don't need title insurance here - doesn't do any good - but these attorneys are by every reference I've heard from people I consider trustworthy... trustworthy. If you are buying property here and want assurances, I wouldn't do it without either a trusted attorney WHO KNOWS WHAT THEY ARE DOING and WILLING TO GUIDE YOU BY THE HAND (instead of waiting for you, the ignorant gringo/a to ask... what b.s.) Or call these guys (

So, tica teri, IF you ever really do come to San Jose, OR next time I'm coming your way, we need to have lunch and you can fill my pretty little head with all the ugly stories... part of my training.

Pura vida!

TICA MACHA said...

You'd make an excellent "Scout" and you are a person that CARES about people. You will be great, like a dog with a bone. I hope you can find a way around the system and help others to find their "dream".
I tried R.E. here but I stayed too paranoid that some other guy would get pissed and turn me into immigration and I'd get deported for 10 years.
I also feel "if you like Costa Rica, don't tell anyone". We have too many foreigners here already. The locals are starting to turn on us around Jaco. Just like living in Naples, FL and being invaded by Northerners with tons of money. I couldn't afford to live there anymore. I'm beginning to wonder how long I will be able to afford living here with the prices escalating to Gringo prices (plus the cost of the learning curve).

Saratica said...

Foreigners will stop coming to Costa Rica for investment pretty soon because it's starting to make less and less sense. I have complete faith that the market will dictate how many people come here and stay here. But as long as the US continues on its current path, US citizens will continue to run away if they can.

I can do a job under my corporation. I believe the defining difference is getting a salary. My corporation can pay me dividends. It's not the actual physicality of working: it's how I'm paid. I cannot take a salary from an employer. I am looking for the verification of this. If it's not as I believe, forget it.

I am only going to sell to people moving here. Not selling to speculators or to developers. Developers who live here and will live in the development are ok by me. Walking the walk shows a level of commitment and confidence that is inspiring.

WolfieCR said...

This is REALLY major weird........contract registered ????? wth!

I have NEVER heard of this and my family owns quite a few piece of land down here.....

I am not sure if I am raising a false alarm here but I would ask a second attorney about this...just for fun since you already got your may already have in which case I will then ask two lawyers on my side to see whats going on :(

TICA MACHA said...

Wolfie, I'd appreciate that since I don't do the "diablo abogado" visits much anymore.
I'm pretty much pleased with how it all worked out. At that time, I could barely afford the property and would have been acting on faith. A year later, developers came in and bought my whole street in Naple$. I held out for the "best price" to afford my CR dream and I got it.
Things have a way of working out if you let them. I still see the guy that upped the price and I'm friends with the entire family. Money is money. I don't really blame him for trying to get more.
I did wonder about the contract having to be registered in the local Muni. Made sense to me since THIS IS COSTA RICA!

WolfieCR said...

like you said , if it all worked out then everyone's happy

but look at it this way, in CR verbal contracts ARE legally binding in certain areas (like labor code)

I have made bunches of contracts and I bet you that if I show up at the municipality to register they will say "que??????" and give me that look (you know what I am talking about), besides, in which municipality do we register it, the one where the lawyer is, or the seller or the land? ;)

in this case what could have happened is that you say "no way , thanks and goodbye" the other guy says "waittttt I changed my mind"

or you say "no way" he says "ok forget it" at this point you could try to enforce your contract and THAT will take time, say 2-6 years or may be more (my family is up to 8 with a legal fight about a huge piece of land in Santa Ana...)

glad to hear you got out of the real state market when you did, I bet you are having fun watching CNBC and all the stuff about stock/mortages etc

I am myself waiting as my wife wants to buy a home back in her hometown in the her area the prices cant possibly go any lower than what they are (its in MI)

Suerte :)

TICA MACHA said...

I think the seller ended up getting WAY more than the final $60k he wanted from me BUT it was "the principle" for me. I felt if I let him up the price then others would stand in line to screw the blonde gringa. I just cancelled the deal and walked (flew) away. The guy later told me that he didn't realize I was flying here everytime he saw me. He thought by how frequent he saw me, I was living here. Come to find out, he spoke English too but hide behind only speaking Spanish.

The one consistent thing about Costa Rica is it's inconsistency!

Yep, watch CNBC off and on ALL DAY.
That's all I hear is about the troubled mortgage lenders and I can't help but think what big trouble CR will be in a few years from now offering all this credit to people that really don't understand how it works. Lots of Ticos are using their NEW credit cards for everything. Thank YOU GOD, I have no debt anymore and never will again.
"I'm free to do what I want any old time" Rolling Stones

WolfieCR said...

You are soooooo right about the credit cards, to get credit in CR for houses you need to show the bank a mountain of paperwork to prove it (I thought it was like that all over until I discover the "no money down" or "interest only" or "stated loans" ) so in the mortage front we are ok but in the cc............

the other day I was watching cnbc while running on the threadmill and this guy Cramer from Mad Money really got on my may be just me but he sounded like a total "bulls***er" , now its all "you are in trouble" but I bet you 3 years ago these exotic mortages where "best thing since sliced bread!"

TICA MACHA said...

I'm a Cramer groupie for years now and YES, HE GETS ON MY NERVES with his "displays of enthusiasm" but I watch "Mad Money" everyday (at 4pm or 9pm) and I think Ole Ben heard his outcry during that interview on "Stop Trading" with Arron Barnett and he left the rates "as is" for now.
Jim's right, what the hell is Fanny Mae for if not to help people refinance without huge penalties. I watch "On the Money" (7pm) too, everyday. I've been a Miss "Chicken Little" and missed out on some real gains in the stocket market lately.
Yea, Jim's a madman but he is a good stockpicker and has been around the block more than a few times (maybe that's why he's so crazy). I have his older book, Real Money.

TICA MACHA said...

Correction - It's not "On The Money", it's FAST MONEY at 6pm channel 28. Four guys and Dylan Ratigan, rapid fire exchange.
Jim Cramer (Mad Money) is the one that started this kind of "educational" programming and God bless him and his odd ways to make it understandable.
Living in Costa Rica, I am not in touch with what's hot except what I see on t.v. CNBC is my lifeline to the stock market.

CostaRicaNaturally said...

Just for reference, most of the purchase options done in Costa Rica are not registered and are private documents. We've purchased a few properties ourselves and had never heard of any such thing, but when our friends were about to make a purchase option document and a 5% deposit on a property that was worth $220,000 our lawyer told us about this little known fact - they opted not to register it like most people - why? The cost for registering the purchase option/ down payment is about the same as transfering title! (about 3.75% including lawyer fees, taxes, stamps)

TICA MACHA said...

THANK YOU for validating that this does exist. I was told in the year 2000 that it was around $50 (?).
...Ask three people, get three different answers.
But at least, there is a way to "lock in" a deal and the contract price can not be changed.
I understand negotiation and Ticos really don't know what it's worth. When someone jumps on their price, of course they think they asked too little. I've felt like that before myself. There aren't accurate appraisels or "comps" like with MLS.
Yo-Yo (You're On Your Own)