If you are a foreigner in the country of Costa Rica and decide you would like to purchase real estate, you may think that a traditional loan from the bank is the way to go. However, once you begin looking into this type of financing you will likely discover a dizzying maze of complex requirements and documentation that makes the process virtually impossible. If you are considering making a foreign real estate investment in Costa Rica, it may be in your best interest to look into seller financing.
The Option of Seller Financing
This is one of the best options if you are coming from another country and want to make an investment in Costa Rica real estate. Not only is this a popular option for buyers, many sellers prefer this option, now, as well. The best way to approach this method of lending is by finding the property you would like to purchase and then speaking with the seller about carrying some of the purchase price. You can work with the seller to set up terms that work for both parties.
Details of Seller Financing
This is somewhat of a creative process that is guided by the specific needs of each party involved in the deal. While describing a “typical” seller-financed deal is somewhat difficult, you may find something that includes the following terms:
- Down payment of 40 percent of the total purchase price
- Interest of eight percent on the balance (typically negotiated between six and 10 percent)
- Two-year term for complete payment
- Every six months interest only payments are required
This is just an example of the terms that you may have when seeking seller financing. Of course, most of this is negotiable and will be worked out according to your needs and the seller’s needs. However, in most cases, opting for seller financing is going to be a much easier option that securing a mortgage from a bank or other traditional lender in Costa Rica.
