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We are looking to sell our house here in CR and have heard a lot of sellers have been offering seller financing.
This is such a foreign concept to me, I have never heard of anything like this in the US, and was wondering how it works down here?
-Do you ask higher than bank interest rates?
-Do you have a very fast time to foreclosure in case of problems?
-Does anyone have experience with this, good or bad?Thanks so much
Mattxmattkx..hi, I have been a Realtor for 30+ years, and yes owner carry notes are done all the time. Obviously there are risks but there are pluses. 1. you can often get more for your house as you do not have to worry about an appraisal and you will attract many buyers (ie)U.S. who may not be able to get a loan there. 2 you are likely to get a better interest rate than the bank because buyers understand the risks you are taking. Yes, do have an Real Estate Attorney draw up contracts AND notes to protect your interests. Here in Texas My Attorney did not put in a late payment provision and when the buyer was late I was MAD but I called my attorney and he said you have to understand that it is a “late payment priviledge” not penalty..it is ok to be late just pay more..with NO late payment it was Due and forcloseable on the 2nd….I told my buyers this and they were never late again…..Get all the financial background, credit reports,job info, income etc…and GET AN Attorney.
Terry From TexasWhat Terry said . . .
Be sure to consider the implications of having this contract expressed in U.S. dollars or colones. Banks charge lower interest rates for dollar mortgages on the presumption that the colon will devalue and the higher interest on the colon will compensate for its declining value. Since the colon was allowed to float against the dollar last November(?), the exchange rates have been virtually unchanged.
I think you should have a plan, too, for just how the monthly payments will be made, to whom, and what will happen if they’re not. A short foreclosure window, as Terry described, can be a strong incentive to pay. In light of a sufficiently convincing sob story, you can always relent, but it’s hard to go from liberal terms to more restrictive ones.
Hi Terry from Texas!
I have some land for sale that the buyer would like me to finance for 24 months. It’s ok for me financially to do it, but I don’t like the idea of chasing after someone for money if they default. You mentioned a short foreclosure if they didn’t pay be the second…
How can you enforce a foreclosure on a property that’s in Costa Rica? Is your contract written up that if they don’t pay by the second, nor rectify the back balance within 30 days, the contract is default and the property and all payments they have made are yours?
I’m such a rookie at this. I sure do appreciate your information.
Josie in Texas 🙂Josie….That is a very good legal question and While I have 30+ years as a Realtor here in Texas it would be impossible to know what the Rules of C.R. are. As Scott says get a good C.R. real estate attorney NOT just any plain ol attorney and you might even check with 2 to be sure if you feel unsure with the first ones answer..
Rules in CR. are Totally different. Owner carry can work and to your benifit but make sure you do everything to protect you.
Sorry I can not (and Scott would Kill me if I gave any other advice)
Terry From TexasScott and Mayra have us up here-
https://www.welovecostarica.com/public/1394.cfm
We have a lot of pics here:
http://www.pbase.com/xmattkx/pictures_of_the_orchid_lodge
This is our website:
http://www.theorchidlodge.comMatt
You can legally lend as much money as you want here and if you have real estate assets that you are comfortable with as collateral, you’re protected. As long as you do not enter into mortgage or lease agreements you’ve got the advantage and you can negotiate an attractive interest rate. When you sell a property with financing you can increase your ROI by offering financing in the form of an option to purchase. If they default on the option you keep the property and do not have any foreclosure or eviction proceedings. It’s all very simple and legal. I know this sounds crazy and you may wonder why a purchaser would enter into this type of agreement, but in the old days there was very little mortgage money available here and this is the way the Latinos grew up doing business.
My lawyer of 12 years has arranged various loans at attractive interest rates to local businesses that needed cash. This works well as long as you have legal counsel that protects you. My lawyer introduced me to a friend of his who was a young Tico with a growing construction company that needed $100K to complete the infrastructure in a land development project some years back. The property to be developed was several parcels of land in the hills of Santa Ana that had great appreciation potential. The construction company that owned the land had already begun to sell lots in the first phase. To complete the loan transaction the lawyer transferred one of the adjacent undeveloped parcels of land, valued at hundreds of thousands of dollars into the name of a company controlled by the lender. At closing an “option contract” was endorsed that stated the borrower could purchase that company within the 24 month term of the contract if they paid the principal loan amount plus accumulative interest of 12% on the 24th month. If they defaulted, they lost the option and the contract expired.
There are several legal methods to sell your property with terms and protect yourself at the same time. Do yourself a favor and hire an experienced attorney who specializes in real estate law to structure the terms in your sales contract.Thank you Tomasino. I have begun to not trust my “real estate attorney” for multiple reasons. I like that you’ve been with your attorney 12 years. Would you be kind enough to recommend him to me? I’d be forever grateful. Josie
I am happy to share my lawyers contact info with you. He has become very popular and represents large developers now and has an additional office in Playa Hermosa. His level of service has always been consistent and honorable. His office in San Jose is a family practice with his father, brothers and sister as well as other lawyers with expertise in specific areas of law. Interlex, Carlos Echeverria Alfaro, Barrio Dent, San Jose, office 524-0717, Playa Hermosa office, 670-1165. Cellular, 830-5432. cecheverria@bufeteecheverria.com
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