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Due Diligence: Inspections and Appraisals

As we have previously mentioned, whenever you are looking to buy real estate, it is important to undergo a process that allows the buyer to review the property, providing them with the opportunity to identify

As we have previously mentioned, whenever you are looking to buy real estate, it is important to undergo a process that allows the buyer to review the property, providing them with the opportunity to identify potential issues or problems that could impact the purchase. This process is known as Due Diligence, which requires several issues to be assessed.

We will examine two of the main steps of the Due Diligence process.

The Inspection

The purpose of a property inspection is for the buyer to understand the physical condition of the property that will be purchased.

Depending on the location of the land, the age of the building or other unforeseen issues related to the property, inspection requirements can vary and will be determined on a case-by-case basis.

Inspections are used for a variety of reasons such as: evaluating the condition of the property; determining possible environmental issues and geologic conditions; establishing property lines, area and boundaries; deciding on necessary improvements; evaluating building structure and foundation; finding leaks, determining the condition of the plumbing as well as electrical, heating and air conditioning systems; assessing electric installations as well as becoming familiar with any other circumstances that could impact the decision of the buyer to purchase the property.

Inspections are important since they can reveal both minor and major defects that buyer and seller may not have foreseen during the negotiation. Even though the inspection is not performed so as to lead to a renegotiation, it is expected that the seller will make all necessary repairs before closing. 

It is always a good idea to order an inspection if you’re thinking about selling so that any necesary maintenance can be carried out in advance. An initial visual inspection is advisable, while a more thorough inspection by an expert could be required based on the findings of the first visit.


Appraisals are occasionally necessary in order to determine the proper market value of a property so as to ensure that the seller does not overpay for it. 

It is easy to get an idea of how much to pay for a property simply by comparing prices on properties around the same area with similar characteristics. However, this approach might not be the most accurate as the value of a real estate property might not always be the same as that of close by properties. Factors such as age, quality of structures, maintenance, layout of land and zoning use can have a direct impact on the fair price.

Despite all the above, it is important for the seller to agree to perform an appraisal and share the results in order to avoid any conflict.

This tool is particularly important for sellers that want to make sure they’re offering a fair price and for people who will be requesting a loan to complete the purchase. But it is also, more generally, an excellent tool for sellers to define a price and establish a point of negotiation.


Due to the topography of Costa Rica, it is not advisable to accept purchase agreements that call for the property to be accepted in an “as is” condition. A Due Diligence process is always recommended.

It is also important to clarify that the seller is not required to do intensive inspections, nor are they required to accept an appraisal. Even though it is expected that they will disclose any visible or known issues, not all sellers will be completely open regarding the standing of their asset. Additionally, it is also possible for the seller to be unaware of some pre-existing issues.

On the other hand, it is the buyer’s responsibility to be diligent and ensure they take all proper measures to guarantee they are buying what they are being offered by discovering defects and making their concerns known.

We will share other aspects of the Due Diligence process in our next entry. Do not hesitate to contact us should you need additional information about these processes.



Senior manager with more than ten years’ experience in regional roles coordination, global immigration, taxes, and corporate law. Has established two start-ups in the region while effectively leading teams to high success standards.

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