advice on the buying a home

The first red flag is why is the owner stipulating financing terms? If you need a mortgage, I understand, but if you are paying outright, why would the owner care how they get paid?? If you borrow from family or friends, or against your line of credit or retirement funds, why would the owner care? Also make sure your contract is written by YOUR lawyer, protecting YOU and make sure your deposit is refundable in the event your funding doesn't happen. Pay the deposit to your lawyer only. Sometimes the lawyer can represent both parties, but if you are not familiar with him/her, get your own. It won't cost you anything extra. Most charge 1% of the purchase price. The process is not much different than you would be used to, but no escrow or "earnest money" happens here. The buyer only gets their money when the deal closes.  HOA rules, if any, should be included in the sale contract and home insurance is the same as in North America, but if you make a claim, your deductible is a percentage of your claim.  I think this is to deter fraudulent claims.  And it only covers what you tell your agent you have in your home.  New TV?  Not covered unless you add it.  New computer?  Not covered until you add it. 

The other thing to consider, with eyes wide open, is how often will you come to the DR?  For how long?  If it is only for a month or 2 a year, you may be better off finding a rental for those times.  If it's longer than a couple of months, will you rent out your home while you are away or leave it vacant?  Both scenarios come with a whole bunch of issues, and it depends on your tolerance of spending money and having things broken, as to what you should do. 

Leaving it vacant opens it up to squatters or vandals, and lack of maintenance is a quick way to more problems.  Do you hire a property manager to look after the pool, garden and general maintenance while you're away?  The good ones are hard to tell apart from the bad ones.  Will they actually be trust worthy?  How will you pay them?  Will they be your employees, or do you hire a company to try and avoid the pitfalls of being an employer?

If you rent it out, it's different but the same.  Do you hire a property manager to rent it and maintain the pool, garden and clean the home between renters?  How will they pay you?  Hard to tell the good ones from the bad ones as well.  Short-term rental vs long-term rental needs to be considered, as there are pros and cons for each.  Will you rent it on AirBnB yourself?  Who will be the local contact for the many problems that arise?  Will you employ cleaning staff yourself, or use an agency?

These are just a few things to consider, and the area you are buying in has an effect on all of these variables.  References mean everything here, and it needs to be from someone who has used the service, not just looking for a kickback for referring you.

^^^^^ Very good questions worthy of careful consideration. We considered buying a stand alone house for part year occupation and renting it out most of the year. We dropped that idea once we realized it was risky and could be costly. It was a challenge trying to find a reliable and trustworthy property management company in Las Terreans. We choose to build here, which has its own set of headaches.

Hi UncleBuck!  Thank you so much for your reply and great support.  This is a scary process with these unknowns and I much rather pull money out of a house I own in the US than to deal with the bank process in DR,  I do not want to lose my funds.  Do you or any one in this forum know how much is the requirement to put down on deposit for contract in DR?  The home is close to the Capital not far from Boca Chica and I am need a lawyer that is good and will work on my behalf that also speaks English.  I contacted one that I found in the past and awaiting his reply for two days since the owner accepted my offer.  Is it better to buy in a corp name LLC or self?  What are the advantages of buying in my LLC?  Do I need to register my LLC there too to buy?

Hi Rocky, yes these questions are worthy of careful consideration.  The good thing about this home, it is in a community with about 20 other homes and is guarded so no one can come on site without permission.  I will not need a home caretaker to watch it.

Deposit depends on what the seller is asking. Deposit for financing is different.

Your particular circumstances should be considered before deciding which is the better way for you to go.  Besides a lawyer I will suggest you seek the advise of an accountant there.

@MyGenieintheBottle  The seller shouldn't care how you are funding the purchase! That would be a red flag to me!

Will you be living here full-time? If not, you will need someone to check on the house periodically. Security might (and I emphasize - MIGHT) not be an issue if the residencia provides security, but you will need someone to check to make sure you don't have leaks, and that there is no mold/mildew growing, then you need to oil the wood and make sure the metal is protected from corrosion, gardens and pools must be maintained, etc.  You can't close up a home here for any length of time - you have to air it out.

Ohhhh boy I will just concur with Uncle Buck. Please take a step back and thoroughly investigate this whole transaction. First off never let anyone dictate how you will finance or pay for your purchase. I would also recommend that you never want to take a mortgage from a bank in DR as the fees and interest rates are going to be astronomical. Also you stated that there is an HOA well you had better find out how much the monthly fees are also before signing anything some of these residential properties charge a hefty fee. There are way to many things for you to consider before jumping in to a home purchase in DR. Please do yourself a favor and get as much information as possible before committing yourself to something that you may regret down the line.

@MyGenieintheBottle Am I understanding correctly that you SIGNED a sales offer, and the buyer gave a counteroffer, BEFORE you consulted a lawyer? Who prepared the contract?

• Was it the owner? The Developer? In either case, I guarantee that contract does far more to protect the SELLER/BUILDER than it will you.
• I hope you haven't yet accepted the counteroffer.  The contract might actually be quite fair and balanced...but you should verify first, not just trust the very nice people who you think the world of. 
• REAL ESTATE AGENTS AND REAL ESTATE SALES ARE MINIMALLY CONTROLLED BY THE DR GOVERNMENT.  it truly is the Wild West down here!!   This is not the ordered, regulated, ethically-operated RE markets of the US or Canada.

If my interpretation of your post is correct...DO NOT ACCEPT THE COUNTEROFFER. Decline it, and FIRST find your own lawyer and have him review the contract.

• I've learned enough about DR laws and RE to know that you MUST have your own very good lawyer review EVERYTHING before you sign ANYTHING.
• Heck, some recommend you take a a lawyer with you to even open a bank account here.  I wouldn't go that far...but I understand the viewpoint.

I don't mean to be rude...and perhaps I misinterpreted your post. I'm just concerned that you not put the cart before the horse.

Any decision is, of course, yours.  This is only my advice, and only you know the true situation.

Jim

ExpatRusher

Another good point is the lack of  clear  conflict of interest rules  or guidelines here.  A lawyer can represent ALL the parties here. So which one do they protect?? A real estate agent here  can also represent ALL the parties. So which one do they look out for? 

@planner Yep first thing I asked was who do you represent! Brea Guzman of the firm Guzman Ariza assured us he is our lawyer and doesn't

represent anyone other than us for any legal stuff we require now or in the future! Cant ask for more than that I guess!

@UncleBuck

hello, I just wanted to ask, maybe I’m more inclined to rent a property instead of buying since it’ll be a couple of years before I retire and move down there. Having so much trouble working with lawyers trying to find a place to rent. They are also asking me for copy of my passport and financial statement information which I assume is required. I was hoping to get this done in two weeks. Also, my Spanish is limited. What would you suggest?

@MyGenieintheBottle

Dear person

Well, its already almost April, how are you with this situation?  All of us here for any length of time will tell you there are issues  here  you need to look at.  I have said it before, so have others, come here and look and stay near where you want to be, then you can find out more and decide what you want.  If you have not, I would stop this because you may be headed for a big disaster and nobody wants that for anyone.  Not you either even though we dont know each other. 

@scs4834 o yes I'm renting out also I can give you my realtor number if you would like to see the place I'll give her number and mu number *** that's my number and realtor number is ***

@scs4834

Hello, you may want to start a different topic.

Renting here is my preferred option. You need a passport or cedula for everything you do here, so thats normal. If you want someone to help you, I find there are some honest people but hard to find. Keep in mind if they want you to rent for a year, which is often the case in Punta Cana area, they will also ask for you to pay 3 months rent before giving you the apartment. One is for the first month rent and they will tell you, 2 is for the deposit (for the furniture etc.) which you will get back if you are lucky, In reality, one month of rent goes to the broker or agent that showed you the property.

So this is how it tends to happen but let me say, this still is alot cheaper than putting down $200k or more on a purchase to find out something has gone wrong and you cant get back the money or get your purchase.  Or now you have to go to court to try and get it back and this can take years.  The courts are filled with corruption even though the president is trying hard to change this.   I dont want to be negative, I just want you all to be careful and it starts with understanding things that can occur.

@janinecrenshaw

Who are you?

@scs4834 Renting all depends on where you are.  We've rented without a deposit, only ID.  No contract.  In other places, you'd need 6 months pre-payment, references, financial statements and more.  You may need to find a local friend to help you out.

The process of renting very much depends where you are. Tourist or shorter term stays are more expensive but a bit easier. Longer term rentals in non tourist areas require more proof and a guarantor! 

Lawyers rarely help find rentals.  They will do the contracts, investigations and get a fee on behalf of the owner.

Thank you, all for the great information. I will start a new thread on this topic. I have already been and stayed in several cities in DR and decided that Santo Domingo suits me best

I am in SD if you need anything

Hello wonderful people. I am just seeing your kind messages and concern expressed.  Thank you so much. I never signed anything yet.  We were working on pricing verbally before contacts could be drawn.  I have a lawyer, but I need another one that works in RE sales often.  The contact came without any information.  It was only 3 pages.  Is that common for DR?  Does anyone have a great lawyer for RE sales they can refer me to there in DR?  Also, this bank is very slow.  For 4 weeks now they have sent me a authorization form to sign to run my credit to date they still have not run it and keep asking me to send the form that I keep sending back after I reach out to them over and over to confirm receipt of the doc they write back a week later to request it again and then confirm receipt only to ask me for the same form again.  I do not understand this.  DR loan processing seems very disorganized.  Can anyone with a great experience with the bank there recommend me a good banker please? Again, thanks to everyone here offering support. 

Bank loans here are very difficult to obtain, the terms aren’t as long as we are used to in the US, and the interest rates are higher.

As said above, the owner shouldn’t care how you are finding the purchase! If you have the funds without getting a loan, go that route. If the owner won’t proceed with the sale unless you have a bank loan, walk away!

Be sure you have a solid attorney doing due diligence on the property to ensure the rightful owner and that a title and deslínde are available.  We had a friend here in LT look at a home for purchase, but when her attorney had a surveyor check the property, the title wasn’t for the same land the home was built on!

Guzman Ariza is a very reputable law

firm. They are not the cheapest, but you don’t want to cut corners on something as important as a home investment.

Banks take months to do loans and mortgages. Rates are high and service sucks.

I do not have a real estate specific lawyer to recommend. Sorry

Thank you both DDM and Planner!  Yes this process is not so great here.  OMG.. I agree Planner .  Also DDM I am seeking another lawyer and have been in touch with one recently. I am asking them questions now to make sure they are skilled in this area to protect me.  Next, Yes the owner asked for a bank loan because her lawyer told her that DR has a high rate now in money laundering and they are not wanting to take cash. I told her I was going to send a bank check not pay with a trash bag full of money...lol.. Anyway I will keep trying with a loan and if not I will try to pay via US fund wired to her bank after all title matters are cleared and ownership is verified as well as land/lot verification at this villa complex. 

PS is is better to buy a home in DR as an individual or in my company name?  I will be there living for some portion of the year and use the home for business when not there AirBnB and such the like. What are the benefits and issues, what protections does it offer if any, what about taxes each year, do I save them with a business title opposed to a ind title of ownership?  Thanks !! HUGS!!

sP

@MyGenieintheBottle

I wish you luck on your purchase , but I wouldn’t transfer money to anyone’s account , when I bought my house I brought a bank check from the US made out to the person I was buying from and handed it to them after them signing over the house and all paperwork “my “ lawyer had written up and  with my lawyer present  ,this way you have a witness…my bank informed me I could always bring it ( ck ) back to them if the transaction didn’t transpire…….. just think if you transferred the money to an account and the person wants to back out , how would you go about getting your money back…🤔……….

" just think if you transferred the money to an account and the person wants to back out , how would you go about getting your money back…🤔………."

Really really good point. They up and grab a flight to Europe or elsewhere.  Can't find them; but if you do then what? This has happened plenty of times here. Be really careful. Can't say it enough,

Even if they don’t flee … how long before you get the courts to do anything and how much money is left in the bank by the time they do and then the arguments you pulled out , he pulled out , she pulled out…etc who’s side will the court take….🙄

TIppj and Rockie , Yes you are so correct about people running off with the money.  I would send it to the lawyer for escrow like in America. The owners cannot touch it if the deal fell apart or we did not close.  However, If DR does not work that way,  then I would bring a check.  How long ago was your transaction with a bank certified check? Thanks so much for trying to help me. Also did anyone use a bank loan from DR for any portion of the payment?  What banks are good there with good rates and follow up and communication to close the deal?  Does anyone here have a contact?

There is a thread or two about mortgages. Lots of info there already

Thank you Planner!  How do I find thread and topics on this site dear?

I just went to Forum and scrolled down and saw a lot of topics. Is there also away to plug in subjects on this site and if not that is also fine. I will scroll down to see the topics in this wonderful group and learn additional information along the way. HUGS

Yes hon use the search function,  On the right hand side of the Forum main page, about  25% down there is a box, in light grey it says - search the Dominican Republic forum.  And there is a magnifying glass beside it.   My guess is  put in "mortgage" and see what come up!

also try other terms, financing, loans  etc. 

AND if you do not find what you are looking for, start a topic honey!  We will all weigh in,  give it a title like - how to get a mortgage!

@MyGenieintheBottle

   Hi Genie  , i hope you’re search is going well but as far as sending money to your attorney , there is no escrow accounts here , I  know of people here getting fleece by their attorneys here also so if I were you I would keep the check in your pocket until the signing of the contract …. Whatever you know about how it’s done in the states , throw those rules out the window…. Keep everyone that’s the process here at arms length , and make sure you have 2 contracts , one in Spanish and one in English so you know their not selling your attorney the property

@Tippj"Keep everyone that's the process here at arms length , and make sure you have 2 contracts , one in Spanish and one in English so you know their not selling your attorney the property".  Not bad advice, but be aware, the English copy doesn't mean a thing here, as it is not the official document.  You need to read and understand the Spanish contract, as that one is legally binding, regardless.  And if you don't trust your lawyer, from many recommendations and a long history of doing business, you have the wrong attorney.

@scs4834 How has this journey been thus far? I am in San Diego and I frequent Santiago at least twice a year and I have been doing so for about 10 years now. Ive gone to many places in the DR but I settled on buying a stand alone home in Santiago. Plus my wife family is close by. I say in about 15 years I plan on retiring so I made sure to pick a spot that I wouldn't mind living in which was Los Reyes, Next to Jardin Botinico. Anyway, while im not there, I am renting it out in through air bnb and I must say, Its been about 80 percent booked for about a year straight now. Im still adjusting the prices to find a "sweet spot" on how much I should charge daily but the money that I am generating on it, I am able to pay about 90 percent of my mortgage each month. Im not making a profit but at least its paying for itself and I will have a home that paid up in about 15-20 years.

Welcome to the forums. Great first post!

Thanks for your advice...

@UncleBuck

Thank you! We are buying down in Sosua now and backed out of an offer because they would not accept a financing contingency clause that gave us 80% of our deposit back if our funding fell thru. Do you have any suggestions for realtors and lawyers in area that are honest and reliable?

Thanks!

@Mdcf5  I'll send you a PM.