By Ivo Henfling
A Costa Rica real estate closing can be a nerve wrecking issue if you don’t know what you are doing or if you’re not in the good hands of a knowledgeable realtor when you purchase Costa Rica real estate. I just went through the nicest real estate closing of my life as described in part I and part II. The long and tedious closing process of filling out documents and more documents after that to apply for a Costa Rica bank mortgage is just like driving a bad Costarican road, it is full of potholes. And going through an even more nerve wrecking Costa Rica bank appraisal and even a home inspection done by the same appraiser will get anyone heartburn.
The home inspection
As you can read in my other blogs, the BAC San José’s appraiser did not only an appraisal but also a home inspection.
Now I appreciate all the work our home inspector Tom Rosenberger does and he charges half for 5 times as much work than this appraiser did for the bank. The appraisal, even though the buyer was getting a bargain, came out much lower than the sales price, mainly because they took 50% of the value because they thought the house is around 25 years old.
Even appraisal of 1/3rd of the property at $6/m2 because the slope is too steep to build on (he has never been in California), which is a price I haven’t seen for a building lot in Escazu since I arrived to Costa Rica, didn’t help. I still don’t know where appraisers get their property prices because we do not have any comps in Costa Rica.
The closing turned out to be pretty easy, since this was a transfer of shares of the Limited corporation, because I had made sure that the constituting attorney first wrote the necessary information in the companies´ books, which he should have done years ago and after we got certification from the CCSS and had the gardener sign off on his workers´ comp to make sure there would be any claims after the closing.
Important to know is that if the buyer really wants to make sure he will end up owning the property, it is the buyer’s attorney who should do the transfer of the shares, the board of directors (in case of an S.A.) and the powers of attorney because the bank does NOT care about all this and they won’t even do it for you. The bank’s attorneys only look out for getting the mortgage lien slapped on the property and that is as far as they go. The bank only cares about the fact that the mortgage gets registered on the property, no matter who OWNS the property or who owns the SA that owns the property.
This was not an easy closing because it had a lot of small details and the bank was asking for a lot more additional paperwork and extra work to be done, to be produced by buyer and seller in record time. Both are my heroes and I am looking forward to the next real estate closing like this, I hope it will be soon.
In the case you are looking for a mortgage with Scotiabank, I have had buyers lose their earnest money as they did NOT get the loan after being pre-qualified and recently, hitting my face on a wall of non existing customer service, they went from 1st place to the 20th place in my book for anything to do with banking. The day they start loving us again as a client, which they say they do, I will recommend them again with my clients.
If you enjoyed this article, you should also read part 1 and part 2 of this series as they are complementary to each other.
Ivo Henfling is your Costa Rica real estate agent who can help you find the property for sale you are looking for and is not scared to get his hands dirty and work hard for his real estate commission. Ivo offers great listings in Escazu, Santa Ana and other beautiful places in Costa Rica.