Once a buyer has seen a property of interest, the next step is to understand what the process of acquiring the property may entail. The following are the basic steps that a purchaser must follows when buying a property.

Step 1: Sign a Purchase/Sale Contract with seller
Step 2: Contact the Escrow Agent to protect the funds.
Step 3: Title research performed and Title Commitment issued (review if property is free and clear of defects)
Step 4: Closing – Execution of Transfer Deed or Endorsement of Shares.
Step 5: Record new transfer deed with the Public Registry
Step 6: Receive official Title Guaranty

Basic Terminology – while the purchase process may seem very simple, there are some key words which a buyer should be familiar with. The following are the most common terms used in real estate transactions in Costa Rica:

Folio Real: This is the property´s identification number. It is a unique number assigned to each recorded property to identify it and distinguish it from others. This number is comprised of three parts where the first number indicates the province, the second is the number of the property itself and the last group of numbers indicates how many owners the property has or has had. Properties with folio real numbers are recorded at the Public Registry but should be checked for recorded and un recorded, liens, annotations, encumbrances and others, but most importantly hidden liens or vices in the chain of title.

Transfer Deed: (escritura de traspaso): This is the document that contains all of the stipulations regarding the transfer of real estate. This document must be prepared and by a Public Notary in his or her´s official Notary Book and then submitted by the Notary to the Public Registry to record the transfser of ownership of the property.

Power of Attorney: (Poder): This document authorizes a person to act on behalf of another to perform specific actions such as the purchase of property. This is especially useful for clients that wish to close on their property without returning to Costa Rica. There are several aspects involved and should ask Stewart Title and[/or your real estate attorney.

Survey Plan (Plano Catastro): Except for certain minor exceptions, each recorded and titled property has a survey plan outlining the property and showing boundaries, size and ownership of the property. This survey must be validated through an approval process at the Public Registry as well as by the municipality in which the property is located in order for it to be valid and binding.

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