Public Auction Foreclosures in Costa Rica
Foreclosure properties in Costa Rica are sold at public auction. The foreclosure listings which we offer on CostaRicaRealEstatePages.com are an English list of all public auction foreclosure properties and include the location, land size, starting bid, and auction date. In addition the listings include reference numbers which you can use to locate the title documents and land plans in the public registry.
Hire a Perito to Value the Property
The title documents of the foreclosure property must be interpreted, and any encumbrances analyzed for risk. The property plans must be compared to the physical property and analyzed for inconsistencies. Then if all looks good, the market value of the foreclosure property must be determined to calculate potential ROI. A Perito will do this research and provide the official valuation of the property for you.
Finances
Once you have found a property you are interested in, you will need to deposit around 30% (this percentage varies) of the base auction price into a government escrow account in order to participate in the auction. If you win the bid, you will need to deposit the remainder of the payment within 3 days in order to obtain ownership rights to the foreclosure property.
From start to finish this is a fast paced deal, so you need to be ready to act when the opportunity comes along. In Costa Rica the property foreclosures are announced nationally about a month before the auction date. This small window of opportunity doesn’t leave much time for arranging legal documents and transferring funds, so it is important to be ready to act when a good deal comes along.
Set up a Corporation
It is highly recommended that you set up a corporation in Costa Rica under which to buy the foreclosure property. This allows you limited liability, and provides an in-Country entity under which to manage all your legal and accounting needs. As a perk, you can also write off all your Costa Rica travel expenses while you are in the country.
Setting up a corporation is easy and can be done as a foreigner without residency. You can register a corporation for as little as $500 but it may take several months to finalize the documents. The other option is to purchase a pre-registered corporation and simply have it transferred to you.
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