Houses on Auction, Going Once, Twice… Sold!
One option for buying property in Costa Rica is going through one of the country s public or private banks and buying at auction. Forget the fast-talking announcer spewing what sounds like gobbledygook and banging a gavel the public banks such as Banco Nacional take bids in sealed envelopes, holding them until the time limit is up.
While banks sometimes sell their own property such as an office building it no longer needs most of what they offer are homes, plots of land, furniture or equipment that clients turned over to the bank for a variety of reasons, such as when they cannot pay off a debt or want out of a contract.
According to Luisa Ureña, who works in temporary property administration at Banco Nacional, purchasing property through a public bank offers buyers a more objective and secure process.
I cannot think of any disadvantages, she said.
A bank inspector gives the properties and goods a technical evaluation and prices them according to market value, Ureña explained. By law, the bank cannot make a profit off the sale its only goal is to recover the money it is owed, and anything beyond that amount is given to the original owner.
To peruse the bank s offerings, Ureña said, buyers can keep an eye peeled on The Tico Times every week and the daily La Nación on Mondays the two printed media where the bank advertises. In addition, Banco Nacional s Web site (www.bncr.fi.cr) makes the bank s listings available 24 hours a day for anyone with Internet access.
From the home page, click on bienes temporales, and then choose from plots (terrenos), buildings (edificaciones), furniture and equipment (mobiliario y equipo) and vehicles (vehículos).
When looking for land or buildings, potential buyers can search the properties by setting the minimum and maximum price they are willing to spend, the minimum and maximum area of land they want and the province where they would like to buy.
The bank lists its properties and goods at a base price, and bidders then have one to two months from when something is posted to look at it and make their bid.
A search on the page in early September turned up a 159-square-meter, two-bedroom home in the canton of Acosta, in the mountains south of San José, for about ¢15.7 million ($30,300), for example. In the canton of San Ramón, in the province of Alajuela, northwest of San José, the site listed a three-story, 433-square-meter home for ¢49.5 million ($95,500).
Banco Nacional has special forms for the bids and drop boxes at locations in San José; the eastern San José neighborhood of San Pedro; Cartago, east of San José; Heredia, north of San José; Alajuela, northwest of San José; and in Liberia, the capital of the northwestern province of Guanacaste.
The box remains sealed until the time limit is up. Then, in a public event to which the bidders are invited, a bank official opens the box and reads all the bids, so potential buyers can know where they stand, Ureña explained.
The winner, Ureña continued, is chosen according to standards set down by law.
The first criteria is the price, she said, adding that the highest bid gets the property.
In the case of a tie, then (the bank) considers the highest amount of implied cash whoever needs the least amount of financing.
One of the benefits of buying a property through a bank, Ureña emphasized, is that clients can purchase the home and arrange the financing through the same agency. In addition, there is special financing for bankauctioned goods, called bienes temporales, or temporary goods.
Private banks also sell property similarly, however with a different set of regulations that leave more up to each individual bank.
Scotiabank, Costa Rica s largest private bank, says that buyers can make offers on its properties in person at one of the bank s offices, electronically or by fax, according to an e-mail from the bank s legal department.
Scotiabank advertises its properties eight days before the auction in various newspapers and the government-published Official State Supplement.
The legal department also said Scotiabank has no preference between clients and nonclients when awarding the property, and does not offer any financing. Houses purchased at the auctions must be paid for in cash or with a certified check.
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