Frequently Asked Questions about Buying in the DR
What is the Real Estate Market like these days?
Good! The market is alive and well. We have several New Construction Projects in the area that make for very Solid Investments for either personal use or for Income Generation. The Real Estate Market is holding it's own and values are pretty stable, but it's possible to find that seller who is in need of quick cash, so let us know if you are looking for a deal and we'll present them to you. Some of the best opportunities are not listed due to seller's discretion, so ask us and we can share what we have with you.
How does the Buying Process work?
Very simple. First you make an offer. It's a 1-page document with only the highlights of the transaction (i.e Name, Property Location, Price, Terms, Initial Deposit etc). Typically this comes with a separation fee of anywhere from US$5,000 up to 30% depending on the Seller/Developer and the stage of the project. &Once both parties have signed the offer the Buyer hires their lawyer. Even if a development offers you to use their lawyers for little or no cost we always recommend our buyers to hire their own counsel to work for them, represent, them and defend them. This also avoids the risk of a "Conflict of Interest" if there is a question down the line. Keller Williams can recommend lawyers who are tried and true with a great track record of representing buyers. A formal contract follows within a couple of weeks once the lawyer has completed due diligence. It is in Spanish since this is a Spanish-speaking country. If you do not speak Spanish we recommend to use an online translater. We have heard good things about Google Translate and it is cost-effective. If necessary Keller Williams can provide contacts for you to have your contract formally translated by a Court Tranlsator. Once the contract is signed the buyer can take posession of the property and assume liability for the property. If the contract situplates subsequent payments they are scheduled to be made according to the agreement. When the property is paid-in full you will sign a final contract stating this and the lawyer works for the transfer of title from the seller's name to the your name.
Do I have to Hire a Lawyer?
Yes, but not at the very beginning.First you will work with us at Keller Williams to find the home you are looking to buy. Then we write the offer and secure agreement from the seller. Once we have reached an agreement, THEN you will hire your lawyer. Lawyers in the Dominican Republic also serve as notaries and contracts have to be notarized to be legal. The lawyer can also help with the title transfer process if you do not hire Stewart Title. You can use Stewart Title in lieu of hiring a lawyer since they have lawyers on staff who can complete all necessary functions of the contract and title transfer process. Ask us if you'd like some recommendations or would like a free consultation from a Dominican lawyer who specializes in real estate.
What are the Fees for Buying a Property?
There are very few fees involved with buying a property in the DR. Generally, plan for up to 5% of the purchase price for Closing Costs. It wouldn't be any more, but could be less. This estimate is complete and entails lawyers fees, title transfer fees including a one-time land transfer tax, notaries, stamps, checks, and any other miscellaneous closing costs associated with the purchase to get the title in your name.
What are the Property Taxes like?
Very good.You will pay taxes on the value of your property that exceeds RD$7,200,000 at a rate of 1% annually of that value that exceeds the threshhold, based on the purchase price.
What are the Condo Fees and what do they cover?
Condo fees can vary depending on the particular community. Generally they run anywhere from US$ 80-270/mo for a 1 br, US $110-360/mo for a 2 br, and US$ 125-500/ for a 3 br. The fee includes landscaping, pool maintenance, 24-hour security, water, common area electricity, pool furniture, wifi, and maintenance of the beach (if applicable). In some cases this fee includes Insurance, but that depends on the budget and voting during Annual General body Meeting (AGM) or Home Owner's Association (HOA) meetings. This information may be found in the Property Listings of you can ask your Keller Williams Agent for the fees for the community you are interested in. Aside from your monthly or quarterly HOA fees you will need to pay for your condo's electricity usage, cable TV service, and private internet if you choose to have your own individual service.
Is there Financing?
Yes.With a minimum credit bureau score of 640 you can get up to 80% loan-to-value for about 7% APR, but it can vary greatly based credit score, on loan amount, and term, etc. Please see our or contact your Keller Williams Agent for up to date information on Local Financing in the area.
Can I Rent my Property when I’m not there? What are the Fees?
Of course. We at Keller Williams Punta Cana would be happy to refer you to a reputable management company to manage your rental for you when you are not here. Rental fees are 1 months' rent for an annual contract to place the tenant, then 10% monthly for the management fee. A 6-month lease will cost half a month's rent for the tenant and the property management fees are the same, plus miscellaneous expenses such as cleaning and maintenance, which are nominal.
Variable depending on who you hire and your participation with the process. Management companies vary in their services and offerings, but generally plan to pay 25-30% of the income to your property manager.
Why don’t all Properties have Title? and What is a “Mother” Title?
New construction communities generally do not have titles until the construction is near completion. A “mother” title is title to land that is being constructed on.Developers have to clear this title in order to get the permits to build.They keep this title until the structures are built, at which time they file to have the “mother” title divided into multiple individual condo titles that will eventually be transfered to the names of the buyers. Once the structures are built a surveyor comes to the project, to take actual measurements, verify the plans and certify compliance so the individual titles can be issued.
Can I get financing without a title?
No.The bank needs this collateral in order to approve the loan.
And what about Insurance?
Insurance can be purchased for about .8% of the purchase price (including tax). This includes coverage for hurricanes, fire, electronic devices, and liability.You can purchase property insurance at any stage of construction from raw land to the finished home. Contact your Keller Williams agent for more information and/or a quote for the property you are going to buy.