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This type of a transaction was not covered because it was practically unheard of in Costa Rica until a couple of years ago when a few Americans started buying and selling land to people and ‘helping’ them with their payments.
They probably call it “in-house financing” do they?
I would NOT recommend this at all and unfortunately there are now dozens of ‘developers’, many of whom do not seem to have any experience ‘developing’ offering similar ‘deals’…
Why don’t we recommend this?
Please tell me! If a company like this decides to leave the country anytime within the next two years for whatever reason, what exactly will you have to show for the monies that you have been paying them all that time?
Scott Oliver
WeLoveCostaRica.comHi:
I did ask if I could purchase the lots outright without extending payments for two years. I would feel more secure in this type of transaction becaue as Scott mentioned, should the developer decided to pack up and leave town, at least I would have a piece of property registered in my name. The road may not be paved and the water may not be completly installed…at least that piece of dirt is mine.
To answer your question, Costa Developers hesitantly agreed to accept payment in full, however I was made to feel as though I was insane for asking such a question.
Don’t get me wrong this outfit may prove be a good developer, time will tell. However since they do not own this property coupled with the possibility that something could go array within two years; I’m either going to either opt out of the deal or purchase this property outright. We’ll see what my attorney recommends.
NERA
Sorry! But I’m not sure if I am reading this right …
You are buying property that you won’t legally own for at least two years from people that don’t actually own the property they are trying to sell you?
Is that right?
Does that sound like a good idea?
Scott Oliver
You beat me to this one, Scott. I was going to say the same thing. How can someone purchase something from someone who doesn’t own it? Come on, you wouldn’t buy a piece of property this way in the States. Imagine buying a house and the seller says, “sure you can give me the money for the house but I don’t really own it. I’ll give you a piece of paper though that says YOU now own it even though you bought it from someone who never owned it, but you can sort it out later.” Well, the bottom line is that you won’t own it either! you’re waiting for the developer to “prove” itself — hellllloooooooo? And what if the worst case scenario happens and the develops takes off without improving the property and you “may” own a piece of land that nobody can get to with no water or roads or electricity — how much do you think that property will be worth??? Zero? Less than zero? (I’m sitting here shaking my head in disbelief.)
Nera, Scott:
I received from Costa Developers a property search documentation (in English and Spanis) and (in Spanish only) what CD calls a “certificate from the National Registry that certifies the purchase of the property by Costa Estirellos Estates SA.” which is signed by Arnaldo Bonilla Quesada (CD attorney..), Notario Publico and has a stamp of Registro Nacional.
I sent these documents to Mr. Fernandez for his opinion.
Scott, could you please release Nera’s and mine e-mail addresses to each of us? This is an important decision for both of us, and I am hesitant to release certain legal docs etc on a public forum.
We will still advise others on the outcome and a justification for any decisions we make.
Thank you.
Violetta
Yes; in answer to your question Scott.
However it’s important to note that Mr. Fernandez mentioned that the “property in question does not pose any major concern to a possible buyer.” However he did add that the buyer must exercise care and complete the necessary steps in order to secure title.
Any additional thoughts, comments and or personal experiences would be appreciated.
NERA
Hello Maravilla,
I understand what you are saying but I feel as though I’m being looked at like some idiot who has no business purchasing property outside their own neighborhood.
But just for the record I am certain that in the US, there are numerious land developers who sell properties without owning one square inch of dirt. I don’t understand the mechanics of such dealings but one case in point is Pelican Bay near Naples Florida. From it’s conception in 1973 one company owned the entire 10 square miles of this development. Many developers competed for the right to build in different sections of this community. And my folks ended up purchasing their home from such a developer who in turn gained release of title from the owner company upon closing.
Does the US work the same way as CR? Absolutly not! That’s why I am on the forum trying to gain as much knowledge as possible prior to making such a big decision.
NERA
By the way property in Pelican Bay goes from $600,000 US to well over 35,000,000.
and who will you sue in costa rica if this doesn’t pan out and you lose your money? i don;t care about pelican bay or any other such deal; costa rica is not the us and you will have little recourse if this goes belly up, but no, i don’t think you’re an idiot, but i cannot imagine buying anything from someone in a foreign country who doesn'[t own the item outright. that is just common sense, which doesn’t seem to apply in any of these land deals.
A question I would pose to anyone trying to sell me a piece of property is whether it is registered in the National Registry. Also, is it free of any liens? I know competent real estate agents who have spent years trying (so far unsuccessfully) to get a plot registered for the first time. It’s not a shoo-in. What if, for some reason, it never gets registered? Then what will it be worth? You won’t be able to build on it; you won’t be able to sell it; and you won’t have a registered property to even register ownership of in your name.
Better to give this company a small deposit to obtain an option to purchase, at a stated price, pending registration in the National Registry by a stated date. At least this minimizes your exposure.
Or, you might shop for a plot that’s available to sell right now. There’s no shortage of them.
Good point David about a purchase option pending registration. The Property we’re discussing has selling documents pending in the National Registry. If I understand correctly the transfer documents have been annotated and are going through the process of registration.
However as was mentioned previously in this forum, the developer could cease development of the property and leave the buyer with nothing prior to making the finial payment in two years. Any thoughts?
NERA
Is there something especially appealing, something unique about this property or this development? Is there no other similar property in the area? While I’m not conversant in all the real estate developments in Costa Rica, everything I read suggests that there are plenty of options. Why not focus some attention on the competition?
Please bear in mind that an honest, competent attorney can prepare registration documents and submit them in good faith but that does not assure that they will actually be registered or that they’ll be registered anytime soon. And the verbal assurances of the developer’s representative are just that — hot air. What backs them up?
Odd, too, that you’re being encouraged not to purchase this property outright. Is there an ulterior motive for that? I can think of at least one . . .
Jill. Scott, Nera, et. al.
I have been getting the “boiler room” pressure from Ellaine Geller at Costa. Any of you have more up to date info to share? My gut tells me to forget it. When they put so much pressure on you, something usually smells.
Denny
I think you should listen to your gut but, that’s just my opinion.
There is no shortage of land for sale in Costa Rica.
Scott Oliver
WeLoveCostaRica.comHello Denny,
Can’t say anything smells just yet. I firmly agree their sales staff are persistant and do put a lot of pressure on perspective buyers. However, their saleries for the most part based on commission so I wont fault them for trying to earn a buck. The real question is: what is going on at the Esterillos project?
When I was there at the end of July the roads inside the development were graded (not paved) and some drainage was currently in place. I was promised monthly updates via e mail but only received one to date. Hopefully the project is progressing at a steady pace regardless of the weather. To be honest, I’ll feel a little more at ease when the water lines are installed to individual lots (not the front enterence) of the development. I’m not certain if this work has been started to date (Question to ask). What about electricity and telephone? Haven’t got any info yet, although it may not be scheduled until later this year or next. (I’ll look at my sales contract tonight and get the construction schedule they signed when I made my purchase)
One important question you may want to ask your boiler room buddy: I was told that Costa Developers was in the process of purchasing 1 hector of beachfront property for construction of a recreation center excusively for residence only. The contract for sale was to be finalized NL than August 18th. To date I have received no confirmation either way of the pending sale. This is an important facet because having access to the beach with ammenities such as changing rooms/showers and a place to eat is very important. (demand the folio number)
I’ve been out of town for a while and havent had much of a chance to follow up on progress at the site. If you get any additional info please pass it along, I would greatly appreciate it.
NERA
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