By Ivo Henfling
Serious Costa Rica real estate agents will write up an offer to purchase – sale agreement on the Costa Rica property for sale, showing what the buyer and the seller agreed on like sales price, closing date, home inspection, who will pay the legal fees, the real estate commission and any other occurrences from both sides of the negotiations.
All GoDutch Realty agents do it this way, so there won’t be any surprises and you can have a smooth real estate closing.
Once there is an agreement between buyer and seller, the offer should be sent by the real estate agent representing the buyer to the buyer’s attorney who will write up the option to purchase –sale agreement, to make it official, and when signed by both parties the buyer will usually put earnest money in escrow with his/her attorney or with a title company. The earnest money is usually 10% of the agreed on sales price but percentage depends on the negotiations.
If you want to get your Costa Rica real estate closing to be a success and bring it to the finish line, do a walk through before the closing, just to make sure that everything is ok with the Costa Rica property. I have seen sellers take electrical plugs, toilet seat, lamps and the water pump. I have had sellers leave the windows open and when the buyer moved in the house was flooded with rain water.
So I ALWAYS do a walk-through of the property before closing, even if the sellers get mad at me because the believe I don’t trust them, just to cover my own and my buyer’s behind. So in the closing attorney’s office, when the closing papers are signed, the buyer will receive ALL the keys to doors and gates, the remote controls of all gates, the alarm code and all paid utility receipts and the seller will go elsewhere after closing.
So yes, the seller should have moved out of the property at this point. But there are always exceptions. So why do we have to worry about the seller moving out or not before closing? Once in a while, when we have a cash deal, we go straight to closing, without doing any option to purchase –sale agreement and there is no money down. This is what happened a few weeks ago and that’s why I am writing this blog today about it.
On the day I was leaving for the International Living conference in Cancun a couple of months ago, we received an offer on a condo for sale in Escazu. While on the way to the airport, we finalized the offers and counter offers over the phone and I asked my son Andres to take care of the offer to purchase – sale agreement.
It turned out that the buyer had already left the country and left power of attorney with his lawyer to close on his behalve and they wanted to go straight to closing as soon as the corporate papers were shown to be in order for a transfer of the shares, which would be more or less a week. To their opinion the time was too short to do a formal option to purchase – sale agreement with earnest money in escrow and I wasn’t there to discuss this matter.
We did not have any agreement on paper between parties and the buyer could have walked at any time, not particularly a situation I like to be in. My seller was going back to the US the next Monday and time was running out. The seller had some real nice art in her condo and needed to ship it back to the US. But were we going to allow her to ship it back without having secured her sale? Of course not.
But what can you do with a seller staying in a Costa Rica condo until after the closing and then does not move out? It will take you at least 3 months to evict anybody from any Costa Rica property. In Costa Rica the rental law allows a tenant a minimum of 3 years, so a lease is no good in a situation like this. The only solution is a gentlemen’s agreement to allow the seller to stay in the sold Costa Rica property for a couple of days to be able to ship everything and then return the property to the buyer. That is what we did in this case, though it was not the correct legal way.
If we would have done this legally correct, we would have had to do an option to purchase – sale agreement with a 30 day closing or before. That would have given the seller enough time to ship back the art and even give someone a power of attorney to close for her. She could have travelled when was ready and we could have closed after that or any time before the 30 days were over.
I was back in time from the International Living conference for closing and the sale of this property had a very happy ending. Stick with GoDutch Realty as your buyers' agent and you will enjoy your next real estate closing even more.
By Ivo Henfling, your experienced real estate agent on the west side of the Central Valley. Contact Ivo now for more information on our Costa property for sale.