Escrow Process

If you are purchasing a property in Costa Rica, you may hear the term “escrow” used in relation to the transaction. Escrow is a process that can provide both the buyer and seller with additional security and peace of mind during a real estate transaction. Here’s what you need to know about the escrow process in Costa Rica. What is Escrow? Escrow is a process in which a neutral third party holds funds and documents related to a real estate transaction until all conditions of the sale have been met. The third party, known as the escrow agent or escrow company, acts as a facilitator between the buyer and seller, ensuring that all parties meet their obligations before the sale is finalized. How Does Escrow Work in Costa Rica? The escrow process in Costa Rica typically involves the following steps:

1. Agreement: The buyer and seller agree to use an escrow agent to handle the transaction.
2. Opening the Escrow: The buyer deposits the funds for the purchase into an escrow account held by the escrow agent. The agent also collects any necessary documents, such as the property title and any permits or licenses required for the sale.
3. Review and Verification: The escrow agent reviews the documents and ensures that all conditions of the sale have been met, such as the completion of any required inspections or repairs.
4. Closing the Escrow: Once all conditions have been met, the escrow agent releases the funds to the seller and transfers ownership of the property to the buyer.
5. Final Steps: The escrow agent prepares and files any necessary paperwork, such as the new property deed, and ensures that any outstanding bills or liens on the property are paid.

Why Use Escrow? Escrow can provide several benefits to both the buyer and seller. For the buyer, escrow provides assurance that the seller will not receive payment until all conditions of the sale have been met. For the seller, escrow ensures that they will receive payment once all conditions have been met and that the buyer has the necessary funds available. Additionally, escrow provides a neutral third party to handle the transaction, which can help to prevent disputes between the buyer and seller. In summary, if you are purchasing a property in Costa Rica, using an escrow agent can provide additional security and peace of mind throughout the transaction. Be sure to work with a reputable escrow agent who is familiar with local laws and customs to ensure a smooth and successful transaction.