Short answer: two tracks run in parallel. On the seller side, an asset is put under mandate, valued, prepared and reduced to a blind teaser before anyone sees it. On the buyer side, a mandate is written, the buyer is registered and qualified, teasers are matched, an NDA opens the file, and a visit precedes an offer. The tracks meet at the letter of intent.
Buyers ask how long it takes. The honest answer is that the buyer track is fast and the seller track is not, and almost all lost time sits on the seller side, in documents. This is why a properly prepared asset is worth more than an identical unprepared one.
Track one: what happens before an asset is ever shown
Step 1. First conversation and confidentiality
An owner makes contact, usually through a lawyer, an accountant or someone in the trade. Nothing is discussed in detail until confidentiality runs in both directions. At this stage the asset does not exist externally.
Step 2. Mandate
A written mandate authorising representation. Non exclusive is normal in Costa Rica and works well, provided every introduction is documented. The mandate fixes the fee, the term, the confidentiality controls and what the advisor may and may not disclose. Without it there is no process, only a rumour.
Step 3. Reference code
The asset receives a permanent code and from that moment is identified externally by that code, never by its name. Not in a teaser, not in an email subject line, not in a file name. This discipline is what allows an owner to sell without their tour operators, their staff or their competitors finding out.
Step 4. Value diagnostic
Before a price is set, the business is examined as a business. Mixed family accounts are normalised into a defensible operating profit. Occupancy, average daily rate and revenue per available room are pulled from the property management system rather than from memory. The distribution mix is mapped: how much revenue arrives through tour operators, wholesalers and agencies, how concentrated it is, and how much of it is personal to the owner rather than contractual.
Two things come out of this. A value range the owner can defend, and a list of everything the file is missing.
Step 5. Preparation
The missing list is closed: registry study, cadastral plan, encumbrances, corporate documents, permits and licences, water availability letter, tax filings, payroll and social security position, debt schedule, distribution contracts. Where the asset needs work before it is shown, that work happens now, not during a buyer’s due diligence.
This stage is where months are won or lost. An asset that arrives at a buyer with a complete file closes; an asset that discovers an unpermitted building during diligence does not.
Step 6. Blind teaser
One or two pages: category, scale, destination, revenue model, the thesis, and nothing that identifies the property. The teaser is tested against the confidentiality controls before release, including the combinations of small details that together give an asset away. If a reader can name the property from the teaser, the teaser has failed.
Only now does the asset exist externally, as a code.
Track two: what the buyer does
Step 1. Buying mandate
One page: asset type and size, region or flexibility, budget and how it is funded, operating intent, timeline, deal breakers. This is what an advisor matches against the register. An anonymous enquiry cannot be matched, so it is not.
Step 2. Qualification and registration
Identity, acquisition vehicle, source and availability of funds, advisors appointed, timeline. Costa Rican escrow and closing are subject to anti money laundering supervision, so this is required eventually; doing it early prevents a delay at closing. Registration also documents your introduction to each asset, which protects you from a later dispute about who brought whom.
Step 3. Blind teasers
Matched against your mandate and released under code. You read them as a filter and decide which justify an NDA.
Step 4. NDA, per asset
Confidentiality is granted asset by asset, not once for everything. You sign for the specific code and name the entities and affiliates through which you might acquire.
Step 5. The file
Normalised financials, tax filings, payroll and social security position, registry study, cadastral plan, encumbrances, permits, operating data, debt schedule, distribution contracts. Prepared once, answered once, with the missing items disclosed rather than discovered.
Step 6. Questions, then the visit
Written questions first, so the visit is spent on what documents cannot show. Visits are arranged as ordinary guest stays. No announcement to staff, no clipboards, no introductions as the prospective buyer. This is a condition of the mandate, not a courtesy.
Step 7. Indication, then offer
An indicative range first, which costs nothing and tells the seller whether a conversation exists. Then a written offer covering price, structure, what is included, and the terms that matter beyond price: timeline, conditions, staff continuity, the founder’s handover, use of the name.
Step 8. Letter of intent
Where the tracks meet. A good letter of intent in Costa Rican hospitality sets out:
- Price and structure, and whether shares or assets are being acquired.
- What is included: real estate, company, furniture and equipment, brand, domain, guest database, forward bookings and the deposits attached to them.
- Exclusivity, and for how long.
- The diligence scope and calendar, and who pays for what.
- Conditions precedent: lender consents, municipal approvals, concession transfer where relevant, resolution of any identified permitting gap.
- Treatment of the accrued labour position.
- Continuity commitments on staff and, where the seller cares about it, on concept.
- Handover: how long the outgoing owner stays and how trade relationships are introduced.
- Escrow arrangements and the closing mechanism.
- Confidentiality through to closing, including how and when staff and trade partners are told.
The letter of intent is normally non binding on price and binding on exclusivity, confidentiality and costs. Read which clauses bind before you sign.
How long each stage takes
There is no standard timetable, and anyone offering one is guessing. What is predictable is the shape.
Fast: buyer registration and NDA, days. Teaser matching, days. Data room release once the NDA is signed, immediate if the file was prepared.
Medium: buyer questions and the first visit, a few weeks, governed mostly by travel. Indication to letter of intent, a few weeks once both sides are serious.
Slow, and always on the seller side: normalising mixed accounts, obtaining a water availability letter, resolving a permitting gap, clarifying a concession position, correcting a payroll that does not match the actual headcount.
This is the whole argument for preparation. The buyer track can run in weeks. The seller track, done badly, adds months and then costs the seller price when the gaps surface during diligence.
What happens after the letter of intent
Confirmatory due diligence, legal, financial, labour, environmental and technical, run in parallel under an agreed calendar. Then the definitive agreements, escrow, notarial transfer or share transfer, and a planned handover of operations, systems, contracts and forward bookings. Staff and trade partners learn about the change once, after closing, in a way agreed between buyer and seller.
Frequently asked questions
Who pays the advisor?
In a sell-side mandate the seller pays a success fee, agreed in writing at the mandate stage and settled through escrow at closing. Ask any intermediary to put their arrangement in writing before you engage with their inventory.
Is exclusivity required from the seller?
Not necessarily. Non exclusive mandates are normal in Costa Rica and work provided introductions are documented. Exclusivity matters more at the letter of intent stage, where the buyer is spending real money on diligence.
Can I make an offer before visiting?
An indicative range, yes, and it is often the efficient move. A binding offer without a visit is unwise in a business where condition and team are half the value.
What if the file has gaps?
Most files have gaps. What matters is that they are disclosed, priced, and either closed before signing or reflected in the terms. A gap you find yourself is a renegotiation; a gap you were told about is a term.
How much of this can happen remotely?
Almost everything up to the visit. The visit itself should not be delegated.
Further reading: How to Get Access to Off Market Hotels in Costa Rica.
CHN Hospitality Partners is an intermediary in hospitality businesses in Costa Rica, not a real estate agency. We work in hospitality only: operating hotels, lodges and resorts, non-operating hotel properties, commercial development land for hospitality projects, and joint venture opportunities. No houses, no vacation rentals. Every asset on our register appears at invest-costarica.com under its CHN reference code: public listings show the destination and the verified facts the owner allows, silent listings show only a key count and a regional pin. The property’s identity is disclosed only after buyer registration and a signed NDA for that specific asset. Register at invest-costarica.com, or write to tara@invest-costarica.com.
General orientation only. Not legal, tax or investment advice.
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