skip to Main Content
  • English
  • Español

Don’t Gamble with Your Down Payments in Costa Rica

Down payment in Costa Rica should not be a gamble.

If you’re planning to invest in a property in Costa Rica, make sure you don’t gamble with your down payments. This is a true story of a woman who lost a significant amount of money due to a mistake she made serves as a reminder of how important it is to be careful when dealing with real estate transactions.

The Property

A potential development on one of Costa Rica’s premier beaches caught a borrower’s attention, who contacted us for help. The property was fully permitted, had a ton of direct beachfront property with gorgeous views, was quite large, and was shovel-ready. It was undoubtedly worth its weight in gold.

The Down Payment

The borrower had already put down 25% of the purchase price on the property and had the other 25% in her bank account. She came to Gap to provide the balance to complete the purchase. We agreed to help and scheduled a meeting with the borrower to discuss her options.

The Mistake

At the meeting, we discovered that the borrower’s purchase agreement had expired a week before. When asked if she had an extension, she said, “no.” We then asked if she still had the 25% in her bank account. The borrower revealed that she had sent the money directly to the landowner earlier that day, thinking it would buy her more time.

The Consequences

Without a proper extension of her purchase agreement or an escrow account, the borrower had left herself at the mercy of the landowner. Within half an hour of leaving the meeting, she started sending text messages stating that there was a problem, and she now knew she was screwed. The amount of money transferred to the landowner without an escrow account and no extension on the purchase agreement was more than $30 million, and the borrower was Costa Rican.

The Lesson

This story highlights the importance of using common sense, a good lawyer, an agent you can trust, and doing proper due diligence when investing in real estate in Costa Rica. Never put any money down on a property unless you are sure you will get the majority of your deposit back if you cannot complete the purchase. It’s crucial to seek advice from experts who know the ins and outs of Costa Rican real estate transactions and money lending.

Understanding Down Payments

A down payment is a portion of the total purchase price you pay upfront when buying a home. This payment demonstrates your commitment to the purchase and helps reduce the amount you need to finance through a mortgage.

The amount of the down payment varies depending on the type of loan and the seller’s requirements but typically ranges from 10 to 20 percent of the total purchase price.

Why Down Payments are Important in Costa Rica

Down payments are an important aspect of home buying in Costa Rica for several reasons:

  1. They reduce the amount you need to finance, which can lower your monthly mortgage payments and interest charges over the life of the loan.
  2. They demonstrate your financial stability and commitment to the purchase, which can increase your chances of obtaining a loan from a lender.
  3. They can also act as a bargaining chip during negotiations with the seller, as a higher down payment can indicate a stronger offer.

Types of Down Payments in Costa Rica

There are several options for down payments in Costa Rica, including:

  1. Cash: This is the most straightforward option, as you pay the down payment in cash.
  2. Personal Loan: If you don’t have cash, you can take out a personal loan to cover the down payment.
  3. Gift Funds: You can also receive gifts from a family member or friend to cover the down payment.
  4. 401(k) Loan: If you have a 401(k) retirement account, you can take out a loan from the account to cover the down payment.
  5. Home Equity Loan: If you have equity in your current home, you can use it as collateral for a home equity loan to cover the down payment.

Choosing the Right Down Payment Option for You

The right down payment option for you will depend on several factors, including your financial situation, the type of loan you’re obtaining, and the seller’s requirements.

It’s important to consider your monthly budget and a larger down payment’s impact on your financial stability. When deciding, you should also consider the cost of borrowing funds, such as interest rates and loan fees.

Tips for Saving for Your Down Payment

  1. Create a budget: Create a budget that considers all your monthly expenses, including your expected mortgage payment.
  2. Set a savings goal: Determine how much you need to save for your down payment and set a timeline for achieving this goal.
  3. Cut unnecessary expenses: Look for areas where you can reduce spending, such as eating out less or cutting cable TV.
  4. Increase your income: Consider taking on a part-time job or freelance work to boost your income and reach your savings goal faster.
  5. Automate your savings: Set up automatic transfers from your checking account to your savings account to make saving for your down payment a priority.


This story is a cautionary tale for anyone considering a down payment on a property in Costa Rica. It’s important to exercise caution, use common sense, and enlist the help of trustworthy professionals. Always ensure that your down payment is secure and protected through an escrow account or a secure funding source, and never take unnecessary risks. By following these guidelines, you can avoid the potential pitfalls of down payments in Costa Rica and enjoy a smooth, stress-free real estate transaction.

-Written by Glenn Tellier (Founder of Grupo Gap)



*Loan Request Form

    Your Information

    How Did You Hear About Us?


    Referral Name:

    Your Name:

    Your Email Address:

    Your Phone (if possible, include both home and mobile numbers)

    Loan Request

    Amount Requested:


    Use of Funds:

    Collateral Property Details

    Property Location: Please include Province, Town, and District

    Approx. Land Area: (pick square meters or square feet)

    Approx. Construction Area M2: (pick square meters or square feet)

    Property Value:


    Property Description: Please include the age and condition of the property

    What is/are your Land Survey (plano catastrado) or Lot number(s)? (optional)



    Frequently Asked Questions

    What is a down payment in Costa Rica?

    A down payment in Costa Rica is the initial amount of money a buyer pays when purchasing a property.

    Is a down payment required when buying property in Costa Rica?

    Yes, a down payment is typically required when buying property in Costa Rica. The amount of the down payment may vary depending on the type of property and the seller’s requirements.

    Can I get my down payment back if I cannot complete the purchase?

    It depends on the terms of your purchase agreement. If the agreement includes a contingency clause allowing you to receive your deposit back in case you cannot complete the purchase, you can get your down payment back.

    Should I use an escrow account for my down payment in Costa Rica?

    Yes, using an escrow account for your down payment in Costa Rica is highly recommended. This provides a secure way to hold and transfer funds during the transaction.

    Can the landowner hold my down payment without an escrow account?

    Trusting the landowner to hold your down payment without an escrow account is not recommended. Doing so exposes you to significant risks, as there is no guarantee that you will receive your deposit back if the transaction falls through.

    Do I need a lawyer to handle my down payment in Costa Rica?

    Yes, hiring a qualified and experienced lawyer to handle your down payment in Costa Rica is highly recommended. A lawyer can help ensure that the transaction is legally sound and that your interests are protected.

    What should I do if I encounter issues with my down payment in Costa Rica?

    If you encounter issues with your down payment in Costa Rica, consult a qualified legal professional as soon as possible. They can help you navigate the situation and work towards a favorable resolution.



     Contact us for more information, or fill out a loan request now!




    Need Residency status in Costa Rica? – Click HERE.
    Looking for Real Estate? – Click HERE.
    Want to invest? – Click HERE.

    This Post Has 0 Comments

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Back To Top