by ZEWSWhen we try to carry out the closing process of buying and selling a property in Costa Rica, one of the most important steps is the review of due diligence. Let’s see now, what exactly does this “Due Diligence” process entail and its true importance?
We, as real estate service providers and with our vast experience in Costa Rica, are going to explain to you all the steps of the due process of closing the sale of a property in the correct order in Costa Rica and at LandCo, we are here to explain to them.
Let’s understand “due diligence”
When we talk about “due diligence”, we are referring to an exhaustive investigation of everything related to the documents of a property, before a real estate purchase and sale transaction is finalized.
With this process, we ensure that the buyer fully understands everything related to the property, both its infrastructure status and any other hidden damage or liability issues in the future.
What does due diligence entail?
- Search for property titles: This is a thorough review of the property’s title history -or chain if title as commonly known- to identify any type of encumbrance that may weigh on it, check measurement, boundaries, ownership, etc.
- Property inspection: A detailed inspection of the physical condition of the property will be carried out, this includes its infrastructure, its systems providing basic services, and any type of repairs that must be made, this is to be carried out by a professional home inspector.
- Review of zoning and Permits: A study will be carried out regarding the zoning classification of the property and what is related to any permit or approval related to its habitability or its construction and to check if the property is located in a restricted area.
LandCo Due Diligence Services
We at LandCo fully understand the importance of managing “Due Diligence” within the real estate closing process. For this reason, we offer a comprehensive and detailed service in this area to our distinguished clientele.
We conduct a thorough review of the property’s history to ensure the legitimacy of the ownership and detect any liens or hidden damage charges, which may affect the transaction.
Steps to close the sale of a property in Costa Rica
As we already know the importance of due diligence, we are now going to see the steps to follow to successfully complete the process of closing a property in Costa Rica:
- Signing of the Option to Purchase and Sale Agreement (PSA or OPSA): After having established by mutual agreement the purchase and sale price of the property, the contract (PSA) will be signed.
- Down Payment: A down payment must be paid, which is usually between 10 % and 30 % of the sale price; the Down is held in escrow until closing date.
- Review of “Due Diligence” and Property Titles: It is the precise moment in which the exhaustive review of titles and the “due diligence” process is carried out.
- Signing of the Public transfer Deed: The parties involved in the process of buying and selling the property must sign the corresponding transfer deed before a notary public, officially transferring the property to the new owner.
- Delivery of Keys and tax payment: When all the requirements required by Law have been met, the buyer will make the final payment and will finally receive the keys to the property.
Ready to Invest in Costa Rica? Then protect your Investment with LandCo
Investing in a thorough review of “due diligence” is essential in the process of closing a contract for the purchase and sale of a property. By working with a trusted partner like LandCo, we can rest assured that we are making a sound investment and protecting our interests.
To learn more about our Due Diligence services and how we can help you with your Costa Rica real estate transaction, contact us just today.