Preparing to Buy
Before you start shopping for a property in Costa Rica as a foreign buyer, it’s essential to prepare thoroughly to navigate the unique aspects of the local real estate market.
Build Your Green File.
A green file compiles all your critical financial documents, which are necessary to prove your ability to purchase property in Costa Rica. As a foreign buyer, you may need to provide additional documentation to comply with local regulations or facilitate the transaction. Your green file should include:
- Financial statements (translated into Spanish, if required)
- Bank account statements (including international accounts)
- Investment portfolio details
- Credit card statements
- Auto or personal loan documents
- Recent pay stubs or proof of income (e.g., pension or business income)
- Tax returns for the past two years (U.S., Canadian, or other relevant jurisdictions)
- Copies of leases for any investment or rental properties you own
- Retirement account statements (e.g., 401K, IRA), life insurance, stocks, bonds, or mutual fund account details.
Having these documents organized, and if necessary, notarized or translated, will streamline the purchasing process, especially when working with Costa Rican banks, attorneys, or escrow services.
Verify Your Financial Capacity.
As a foreign buyer, financing through Costa Rican banks can be challenging, as local lenders typically prioritize residents or require significant documentation and higher down payments. Instead, most foreign buyers purchase property with cash or secure financing in their home country (e.g., through a home equity loan or private lender). It’s advisable to consult with a financial advisor or an experienced international real estate professional to assess your purchasing power and explore options like seller financing or developer-backed loans, which are sometimes available in Costa Rica. We can recommend trusted professionals familiar with assisting foreign buyers in purchasing residential, vacation, or investment properties.
Be Careful With Your Finances.
Financial stability is critical when purchasing property in Costa Rica as a foreign buyer. Avoid sudden career changes, large purchases, or significant financial moves that could impact your liquidity. Many transactions in Costa Rica require substantial deposits or full cash payments upfront, along with additional costs like legal fees, transfer taxes, and escrow arrangements. Maintaining a strong financial position will help you navigate the process smoothly and meet local requirements.