I’ve seen buyers make the same mistakes over and over again. Some lose deposits. Others buy properties with legal problems that took years to resolve. Several ended up in disputes with neighbors or developers that could have been avoided.
I’m David Hernandez, founder of Magnolia Real Estate. This article is so that you don’t become one of those stories.
Mistake 1: Not Verifying the Property Title
The most common and most serious mistake. Costa Rica has a robust registration system but that doesn’t mean all properties have perfect titles.
What you should do: Request a certified search in the National Registry. This tells you exactly who owns it, whether there are liens, attachments, or limitations. Cost: $100-300 USD. Worth every penny.
Mistake 2: Assuming “Has Papers” Means “Has All the Papers”
In Costa Rica, the property may be registered in someone else’s name than who is selling it to you. It may have municipal debts. Or a demolition order for zoning violations. Or be in an environmental protection zone that limits use.
What you should do: Hire a lawyer to do complete due diligence. Don’t accept the seller’s word. Don’t accept the agent’s word. Verify everything.
Mistake 3: Not Understanding Coastal Zones (ZMT)
Costa Rica has a law protecting beaches and coasts as public heritage. Within the first 200 meters from the high tide line (Maritime Terrestrial Zone or ZMT), the State has rights.
If you buy within the ZMT, you may have use and construction limitations.
What you should do: Specifically ask if the property is within the ZMT. If it’s near the beach, this is critical.
Mistake 4: Not Budgeting for Closing Costs
First-time buyers assume the purchase price is the total cost. In Costa Rica, it’s not.
Approximate costs:
- Transfer tax: 3% of purchase price
- Notary fees: approximately 1%
- Legal fees: $1,500-$3,000 USD
- Certificate of freedom from liens: $50-100 USD
- Property registration: $100-200 USD
In total, calculate between 4% and 6% additional to the purchase price.
Mistake 5: Not Researching the Community or Development
You visit the property on a sunny Tuesday and everything looks perfect. But the development next door could be a 200-room hotel. The lot behind could have an approved project for 50 condos. The neighborhood might have water problems you don’t see during your visit.
What you should do: Ask the local municipality about approved and proposed developments. Talk to existing residents. Check environmental licenses (SETENA) for major projects.
Mistake 6: Ignoring the Water Issue
Guanacaste is the driest province in Costa Rica. Some properties have their own wells, others depend on shared wells or trucked water.
What you should do: Specifically ask about the water system. Where does it come from? Is there enough pressure in summer? Is the development connected to the municipal aqueduct? The PAACUME project ($425M) is resolving this in some areas, but not all.
Mistake 7: Buying Remotely Without Representation
I’ve seen buyers find “the perfect property” on a portal, deal directly with the developer or owner, and then have problems that a local realtor would have detected in 10 minutes.
What you should do: Use a buyer’s agent. In Costa Rica, the seller’s agent typically represents the seller — but a good realtor represents you too and is paid by the seller’s commission, not by you.
Mistake 8: Underestimating Maintenance Costs
The tropical climate is beautiful but harsh on buildings. Humidity, sun, termites — everything degrades faster than in dry climates.
Typical maintenance costs:
- Exterior painting: every 2-3 years
- Roof treatment: every 3-5 years
- Landscaping: ongoing, $200-500/month
- Pool maintenance: $150-300/month
- Property management if you rent: 20-30% of rental income
My Final Recommendation
If I could summarize everything in one phrase: don’t do anything without local representation that has no conflict of interest.
A good local realtor (who isn’t the seller’s) saves you more than they cost. A good real estate transaction lawyer protects you from problems that can cost you the investment.
Property in Costa Rica is an excellent investment — I say this after 20 years in this business. But like any significant investment, it requires the correct process.
Frequently Asked Questions
Is it safe to buy property in Costa Rica as a foreigner?
Yes. Costa Rica allows foreigners to have the same property rights as nationals. The legal system respects private property. Risks exist but are manageable with proper due diligence.
How much does property transfer cost in Costa Rica?
Approximately 4-6% of the purchase price in combined transfer tax (3%), notary fees, and legal fees.
Do I need a lawyer to buy property?
Technically no. Legally yes. A lawyer protects your interests and detects problems you wouldn’t see. The cost is insurance.
What is the ZMT (Maritime Terrestrial Zone)?
It’s the 200-meter strip from the high tide line landward. It’s public heritage. Construction within it has special restrictions and requires government permits.
What happens if I buy a property with debts?
Debts associated with the property don’t disappear with the sale. The buyer can end up responsible for them if not verified beforehand. That’s why due diligence is critical.
Want Me to Review a Specific Property?
If you’re in the process of evaluating a property, I can connect you with the legal and technical resources to do complete due diligence before you commit.
Phone Costa Rica: (506) 8847-6556
Phone US/CAN: (305) 912-3598
Email: [email protected]
Website: magnolia.cr
This article is educational and based on experience. It does not replace professional legal advice for specific transactions.
