Here is Randy's story:
In 2002, my wife and I sold our business in Minnesota (five years ahead of projections), sold our house, packed our bags and hopped a plane for anew life in Costa Rica!
Of course the trip and move were not without hundreds of hours study and correspondence about the country, its people and customs. And since our oldest daughter had married a Tico, we assumed we had a head start.
Our first priority was a home. We had spent days on the internet pricing land, homes and examining different areas of the country (of course, it didn't matter that we had never visited these towns - pictures don't lie!).
Our first night in Costa Rica was at a small hotel at the edge of Alajuela, just minutes away from the airport and next morning we met Tom, a broker we had talked with about a home he had listed on the internet.
We spent about an hour driving over mountains with narrow roads and no shoulders to a small town named Puriscal. The home we were about to see was "3BR, 2 bath, completely updated, with terraces, balconies, three acres of beautifully manicured land complete with fruit trees and magnificent views, for only US$120,000".
What we saw was a stucco home with mold on the walls, no appliances whatsoever, non-functional bathrooms and bare light bulbs for lighting. The upper level had an uneven floor completely covered in something resembling Contac paper. The 'yard' had no grass and three shriveled up orange trees.
And the view? The side of a mountain with other 'similar fine homes'. Our first foray into the Costa Rican real estate market!
The broker assured us, of course, that the price was negotiable. And our response was that we would not live in the home if it were given to us! On
the way back to the hotel, Tom assured us he would be definitely be able to find "something" for under US$100,000. Absolutely no doubt in his mind.
We never heard from him again... and calls to other brokers whose Websites we had studied went unanswered.
So, we took matters into our own hands. We contacted a local tour guide and drew a circle around San Jose resembling what we thought was an hour from the city. We then plotted our itinerary and within a week we had seen it all.
Narrowing our search to the northwest Central Valley, we ended up falling in love with the town of Grecia, not only because of its reputation as "the cleanest city in Latin America" but also because of its climate, friendliness, medical facilities and we loved the fact that this rural town was nearly crime-free.
The next step was finding a house suitable for purchase. However, even in a town of 50,000 there were zero homes we would consider purchasing (at least within our budget). We later found this problem is not unique - there is really very little for sale in terms of existing homes anywhere outside San Jose.
So, we went back to the drawing board, talked to our Costa Rican familia and as many ex-pats as we could find. After days of endless listening, the consensus (among the Ticos only) was clear: building was the only sensible and prudent thing to do!
So we made our decision that even though we knew absolutely nothing about land values or anything whatsoever about building in Costa Rica, we would forge ahead.
Buying land in Costa Rica in no way resembles the structured and regulated real estate markets of the US. Property sales in Costa Rica still, in almost 99% of all transactions, take place exactly as it has for decades. However, not fully understanding the market here, we thought that a full week to look at various properties and conclude our transaction would be sufficient. Because we spoke virtually no Spanish we relied heavily upon our Tica family for help. We found there was no central location or real estate office to go to for assistance in Grecia.
We began by simply knocking on doors, looking for SE VENDE (For Sale) signs, and in short, asking nearly everyone if they knew of property for sale. We quickly found that everyone knew someone who had property for sale!
We also found very quickly that buying and selling property, at least in the more rural areas (which is probably still 85% of the country) is a highly ritualized process ... at least for Costa Ricans. (See Eric Liljenstolpe's The Culture of Closing a Costa Rica Real Estate Deal for Costa Rican cultural traits.)
An interest in a property involved formal introductions, coffee or fruit drinks, followed by conversation which eventually led to discussions of price and an ultimate sale. Before this, however, the first asking price had to be discussed with family members with lots more coffee and fruit juice.
To make a long story short, we consummated our purchase within two weeks (and later found out that we overpaid by a good margin!) And yes, we made certain that the land we purchased was exactly as represented and had a good local attorney check the title.
The next stages involved finding an architect, followed by site preparation and getting building permits. This whole process went amazingly well because all three were done simultaneously and involved very little input from us except for the house design, which was handled by my wife. An architect or civil engineer must be used, by law, in Costa Rica. Normal fees are between 8% to 16% of the total construction costs, depending on how involved the architect is at the construction stage, and are paid in previously agreed installments.
Our choice of architect was based upon referral and examination of one of the homes he had built. Of course, it didn't hurt that he was bilingual. It is very important to note here that, unless you have had prior experience dealing with Ticos you retain an architect who has experience dealing with Americans. Ticos simply do not have the same sense of time as gringos. Since we were not living in Costa Rica at that stage, it was like pulling teeth to have our architect email or fax details of the site preparation and initial plans.
As mentioned previously, I more or less gave my wife a free hand to design the home. It is extremely important at this stage of planning to assume nothing. For example, most Ticos have no 220V power, most Ticos are smaller than gringos and are used to smaller living spaces, doorways and ceilings, and they don't demand hot water.
Thus we had to request specifics such as hot water, (either a hot water heater or on demand heater), higher-than-normal ceilings, upgraded lighting, upgraded kitchen cabinets and countertops. If my wife had not been in charge, I would have gone completely insane.
The next item of business, once the architect's plans were complete, was to find a competent builder. Our Tica family provided us with introductions to three different builders in the area. We gave each contractor (all three were Tied) a set of the architectural plans and asked for bids.
We also examined at least two homes each had recently built. (At this point it felt like we were courting heart attacks and nervous breakdowns because we had committed ourselves financially and still really had no firm idea what to expect.)
After two full weeks, one builder would not even bid because it was too 'complicated' for him and the other two submitted their bids.
One was 25% higher than the other so the choice was actually made for us. (Note: The bid for a two-storey home on a terraced hillside with living space on the upper level of about 1,400 ft2, [126 m2] three bedrooms, two baths, high wood ceilings, an atrium, a spiral staircase, metal roof, adobe-and-block construction reinforced with rebar and steel with upgraded fixtures and hot water; the lower level with a drive-in garage, laundry room and space for extra bathroom produced a final bid slightly less than US$40K.)
Needless to say, we were elated that the bid was do-able for us but obviously we were still on prns and needles not knowing what, specifically, to expect.
Before actually starting construction, a legally binding contract was drawn up between us and our builder for the agreed amount. We also specified a completion date. We found later that most Ticos are not normally this formal because their builders are usually neighbors and friends.  But our Builder had no problem with the contract formality.
The building process could take up an entire book in itself; however, suffice it to say that we encountered absolutely no problems whatsoever. The architect was bilingual and helped us to interface with the builder (who spoke no English). However, as time progressed we began to understand each other more and the architect more or less faded into the background (except for weekly inspections).
If this summation implies that we were totally at ease during the construction process please remember, we were still in a foreign country, spoke virtually no Spanish and still did not know what to expect. My wife was relatively calm. I, on the other hand, being more of a 'Type A' personality, wanted to know absolutely everything that was transpiring with the process.
The end result? We were (and still are) absolutely delighted with the outcome. Of course there were minor changes and corrections that took place along the way, but that is normal in the course of any new construction anywhere. Would we do it again? Absolutely! Without question or hesitation.
Is it for everyone? Probably not... but it definitely should be an option for everyone to consider. Because there is a marked shortage of existing housing in Costa Rica, it is becoming increasingly more difficult to find satisfactory homes to purchase. And simple economics dictate that if there is a shortage, prices will rise.
The simplest way to illustrate the pricing disparity is to go to the internet, select a home that interests you and then compare it to the cost of buying the land and building.
This is what I found:
1. Grecia - a three-bedroom home for sale with 425 m2 (4,573 ft2), two baths, remodeled, outside tiled garage, custom woodwork, 213 m2 (2,292 ft2) land with fenced area and gate US$135,000.
2. Compared to:
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