How Property Sales Work in Costa Rica
The closing process in Costa Rica is different from the US, Canada, or Europe — but not complicated once you understand it. The biggest differences: there's no MLS (Multiple Listing Service), the notary plays a central role (more like a civil law notary than a US one), and the process is generally smoother and faster than you'd expect.
Here's every step, in order, with realistic timelines.
Letter of Intent (LOI)
The process starts with a written offer — a Letter of Intent or "Carta de Intención." This is a non-binding document (unless you specify otherwise) that outlines:
- Offered price and payment terms
- Deposit amount (typically 5–10% of purchase price)
- Due diligence period (typically 15–30 days)
- Contingencies (financing, inspection, clear title)
- Proposed closing date
The LOI opens negotiation. Expect some back-and-forth — Costa Rican sellers often counteroffer, especially in a strong market. Once both parties agree on terms, you'll move to the formal purchase agreement.
Tip: Have your attorney draft or review the LOI before submitting. Some agents use informal templates that lack important protections.
Due Diligence
This is the most important phase and where your attorney earns their fee. Due diligence should cover:
- Title Search: Verify ownership, check for liens, mortgages, easements, and annotations in the National Registry
- Survey Verification: Confirm the plano catastrado (registered survey) matches the physical property and Registry records
- Water Letter: Obtain a carta de disponibilidad from AyA or the local ASADA confirming water service availability
- Building Permits: Verify all construction was properly permitted and complies with municipal zoning
- Maritime Zone Status: Confirm whether the property is fully titled or within the concession zone
- Tax Status: Verify all property taxes and municipal fees are current
- Environmental Compliance: Check for any SETENA (environmental agency) restrictions
- HOA/Condo: If applicable, review condo bylaws, HOA financials, and outstanding assessments
Timeline: 2–4 weeks. Some items (like the water letter) can take time depending on the local utility.
Cost: Included in your attorney's fees. Some buyers also commission an independent property inspection ($300–600).
Purchase Agreement (Contrato de Compraventa)
Once due diligence is satisfactory, your attorney drafts the formal purchase agreement. This legally binding contract includes:
📄 What's in the Contract
- Full legal description of the property
- Purchase price and payment schedule
- Deposit and escrow terms
- Representations and warranties from seller
- Closing date and conditions
- Default and remedy provisions
- Inventory list (for furnished properties)
⚠️ Watch For
- Penalty clauses for buyer withdrawal (negotiate these carefully)
- Seller's obligation to deliver clear title
- What happens to the deposit if the deal falls through
- Who pays which closing costs (negotiate — it's not standardized)
- Timeline for seller to vacate (if occupied)
- Currency denomination (USD or colones — be specific)
The purchase agreement is typically bilingual (English/Spanish). The Spanish version is the legally binding one — make sure your attorney reviews both versions carefully.
Escrow
Funds are deposited into a licensed escrow account. This is a critical protection for buyers — your money is held by a neutral third party until all closing conditions are met.
How it works:
- Initial deposit (5–10%) goes into escrow upon signing the purchase agreement
- Remaining balance is wired to escrow before the closing date
- Escrow agent releases funds to the seller only after the notary confirms the transfer deed is signed and filed
Escrow providers: Use a licensed escrow company. Stewart Title, First American Title, and several local firms offer this service. Your attorney can recommend one. Cost is typically 0.25–0.5% of the purchase price.
Wire transfer note: International wire transfers to Costa Rica can take 3–5 business days and may trigger compliance reviews at your home bank. Plan ahead — don't wait until the last minute. Some US banks are nervous about large transfers to Central America; a heads-up to your bank can prevent delays.
Notary & Closing (Escritura)
In Costa Rica, the notary public (notario público) is a licensed attorney with special authority to authenticate legal documents. The notary's role is different from the US — they're essentially a public official who:
- Drafts the transfer deed (escritura de traspaso)
- Verifies the identities of buyer and seller
- Witnesses the signing
- Calculates and collects transfer taxes and stamps
- Files the deed with the National Registry
Closing can happen in person or via power of attorney (poder especial) if you can't be in Costa Rica. Many closings are done remotely — your attorney obtains a limited power of attorney to sign on your behalf.
Important: The notary is typically chosen by mutual agreement. Some buyers use their own attorney as the notary; others prefer an independent notary. Either way, make sure your attorney reviews the escritura before signing.
National Registry Transfer (Registro Nacional)
After the notary files the deed, the Registro Nacional processes the transfer. This is the final step — once recorded, you are the legal owner.
Timeline: Registry processing typically takes 1–2 weeks. Your attorney can track the status online through the Registro Nacional's digital system.
What you receive:
- Registered deed (escritura inscrita) — your proof of ownership
- Updated title folio showing your name (or your corporation's name)
- Updated plano catastrado (if any boundary changes were made)
Once the transfer is recorded, you can obtain a certified copy of your title from the National Registry at any time. This is your most important document — store it safely and keep digital copies.
Closing Costs — The Full Breakdown
Budget 3.5–4.5% of the purchase price for total closing costs. Here's where every dollar goes.
🏛️ Transfer Tax (Impuesto de Traspaso)
1.5% of the registered value or sale price (whichever is higher). Split 50/50 between buyer and seller by custom, though this is negotiable. Collected by the notary and remitted to the government.
⚖️ Legal Fees
1–1.5% of purchase price (minimum $1,500–2,500). Covers your attorney's work: due diligence, contract drafting, closing coordination, and post-closing follow-up. This is money well spent.
📑 Stamps & Registration
~0.5% combined. Includes fiscal stamps (timbres fiscales), municipal stamps, national archive stamps, bar association stamps, and National Registry filing fees. Your notary handles all of this.
📋 Notary Fees
Variable — often included in legal fees. If using a separate notary, expect $500–1,500 depending on complexity. The notary is responsible for the escritura, tax calculations, and registry filing.
🔒 Escrow Fees
0.25–0.5% of purchase price. Paid to the escrow company for holding and disbursing funds. Some escrow companies charge a flat fee ($500–1,500) instead of a percentage.
🛡️ Title Insurance (Optional)
0.5–0.75% of purchase price. One-time premium. Recommended for purchases over $200K and strongly recommended for maritime zone properties. Not required by law.
What you don't pay: There's no buyer's agent commission in Costa Rica — the seller pays the real estate agent's commission (typically 5–6% of the sale price). This is a significant advantage for buyers compared to markets where the buyer covers agent fees.
Example: Closing a $400,000 Condo
Purchase Price: $400,000
Transfer Tax (1.5%): $6,000 (split: $3,000 buyer / $3,000 seller)
Legal Fees (1.25%): $5,000
Stamps & Registration (0.5%): $2,000
Escrow (0.35%): $1,400
Title Insurance (0.5%): $2,000
Total Buyer Closing Costs: ~$13,400 (~3.35%)
Without title insurance: ~$11,400 (~2.85%)
Pro Tips for a Smooth Closing
Start your wire transfer early
International wires to Costa Rica can take 3–5 business days and may trigger compliance reviews. Tell your bank in advance that you're purchasing real estate in Costa Rica. Have the escrow account details ready before you need them.
Get a power of attorney
If there's any chance you won't be in Costa Rica for closing, set up a limited power of attorney (poder especial) early. This allows your attorney to sign on your behalf. It needs to be notarized and, if signed abroad, apostilled.
Don't skip the inspection
Costa Rica doesn't have the same inspection culture as the US. But especially for resale properties, an independent inspection ($300–600) can reveal structural issues, plumbing problems, or unpermitted additions that could cost you thousands later.
Negotiate closing cost splits
The 50/50 split on transfer tax is custom, not law. In a buyer's market, you may be able to negotiate the seller paying a larger share. Everything is negotiable — including who pays for escrow and notary fees.
What Comes After Closing?
If you're planning to rent your property, our rental income guide covers occupancy rates, management options, and realistic yield projections. Still have questions about the legal side? Check our buyer FAQ.