1)  Once a formal agreement has been reached between buyer and seller regarding price and conditions, a Letter of Intention is signed.  Normally an small deposit is made at the time of signing the Letter of Intent.  We call it a good faith deposit, which is refundable in case due diligence shows that the property has any legal problems. 

2)  Once the Letter of Intent  is signed, it is sent to the lawyers and the buyer´s lawyer prepares the  Reciprocal Purchasing Agreement which is a more formal document containing all due dates, conditions and terms of the sale in detail.    A 5% to 10% down payment is made to an escrow account at owner´s lawyer´s escrow account, at the time of signing the Purchasing Agreement and the deposit made at the time of signing the Letter of Intent is applied to this down  payment.   Sometimes the down payment can be considerably high, depending on the agreement reached during the negotiation.  A larger down payment in a negotiation,  can lead to a lower final closing price.  It all depends on how the negotiation is handled and the needs and priorities of the seller.  To some seller the amount of the down payment does not make any difference and buyer would then prefer to attach to the lower figure.

3)  Once the Reciprocal Purchasing Agreement is signed, the lawyers proceed to do the due diligence of the property in  order to prepare the deed for the closing to take place according to the terms of the Agreement. 

4)  Buyer´s lawyer is responsible for making sure that the property is free and clear and duly registered and titled, by making an study at the Public Registry of Property.  This process can take from 1 week to a month, depending on the terms of the purchasing agreement regarding the closing date.

5)  Once the due diligence is completed and all issues regarding the legal situation of the property have been duly disclosed to buyer, then buyer´s lawyer prepares the draft deed contract and sends it to Owner´s lawyer for review and approval.

6)  Once the deed contract has been reviewed and approved by owner´s lawyer, and once the termination date is being reached for closing to take place, then owner and buyer (or their legal representatives) meet at buyer´s lawyer´s office for signature of the deed of transfer and payment of the balance of the operation.   Any pending mortgages on top of the property have to be cancelled at closing, and lawyers are responsible to take care of this cancellation and making sure the property is transferred free and clear.

7)  All legal fees, attorney´s fees and broker´s fees are paid at the time of closing.  Legal and attorney´s fees are paid 50-50 between buyer and seller.  Broker´s fees are paid by owner and come out of the total payment of the transaction by a separate check or wire transfer authorized by owner.  Broker fees 

Prepared by:  Yalile Alpizar, Costa Rica Luxury Estate