Costa Rica Real Estate Escrow Rules Explained for Foreign Buyers
There is a big difference between an escrow contract and a trust contract. In the escrow contract one party places certain funds in the hands of the escrow company for a variety of purposes, such as: a means to show good faith and real intent to purchase a property or some other important item. Those funds can be an initial earnest money deposit, which is a small portion of the total price, with the purpose of locking in the price of the transaction and having a privileged position to purchase. The initial deposit can be anywhere from 3% (the usual custom in the USA) to 10% (the usual custom here in Costa Rica, but still just a custom that can be negotiated). This type of contract can have an important practical use in places where there is a large demand for property and the buyer must lock the price in before it increases or he loses the property to another buyer. Escrow contracts can be used for many different purposes, not only property purchases. A contract of trust is also the ...