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Seller Financing Saves The Day

Costa Rica real estate is typically a cash market for foreign investors.  The main reason is Costa Rican banks lend money at a significantly higher interest rate than the Prime rate, which has been cut to historically low level since January of 2009.  However, you don’t have to give up the dream of owning your own piece of paradise, because there are two elements working in your favor—lower prices and seller financing.

Pricing After The Downturn

Whether you desire a luxury home or an ocean view lot, there’s never been a better time to buy Costa Rica real estate.  Land values are down by 50-60% from the peak in 2008. Houses have held their value a bit more, but even these turnkey options are lower.

Seller Financing Is Easy

Before the downturn, most foreign buyers—Americans, Canadians, Europeans—traveled to Costa Rica with cash to invest.  Then, the downturn hit and property values around the world decreased… dramatically in some areas.  Equity in their home dried up along with previously abundant lines of credit.  This is where property owners in Costa Rica got creative.

In fact, “holding paper” in the form of a registered mortgage, became more than an option, it quickly became common.  “Holding paper” means the seller is willing to take a portion of the purchase price up front and hold a note in the form of a trust or mortgage.  Your lawyers set up a trust or a mortgage here in Costa Rica.

Here’s the security for the seller… If the buyer defaults on the terms of the trust or mortgage (usually by missing payments), the seller can initiate the foreclosure process.


Generally speaking, we see certain deal points common to the seller financing deals (e.g., approx.. half of the purchase price down, a term of less than 5 years).  While other details like interest rates, ballon payments, and monthly/annual payments vary greatly.

Cash is still king in the Costa Rica real estate market, remates en Costa Rica (Costa Rica foreclosures) is also a popular segment.  If you, as a cash investor, have been sitting on the sidelines waiting for the right time to buy your dream property in the tropics, your time is now.  You have the maximum buying power with the maximum inventory of ocean view land.

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