Frequently Asked Questions about Buying in the DR
What is the Real Estate Market like these days?
Good! No, it's not like it was a few years ago, but the market is stable. This is because the DR is primarily a cash market with very few mortgages, so we are less subject to loan defaults and foreclosures. 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 share some with you. All 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). 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. A formal contract follows within a couple of weeks. It is in Spanish since this is a Spanish-speaking country. My office can provide contacts for you to have your contract translated if needed. At this point a second deposit is usually expected according to the purchase offer. After the contract you simply continue paying according to the agreements and when the property is paid-in full you will get a final contract stating this and you will get the keys and can move into your home!
Do I have to Hire a Lawyer?
Yes, but not at the very beginning. First you will work with us at REMAX Tropical 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. There are only lawyers fees and title transfer fees. is a 3% in one-time land transfer tax based on the purchase price. This includes attorney’s fees, title registration, and government transfer tax.
What are the Property Taxes like?
Very good. You will pay taxes on every dollar above RD$5,000,000 at a rate of about 1% per year. Please calculate for the exchange rate of approximately 39:1. For example, if you purchase for $RD 5,500,000 you will be responsible for paying taxes on the $RD 500,000. Using the 39:1 exchange rate you would be paying 1% on approximately US$12,820 or $1,282 per year.
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$80-175/mo for a 1 br , US$110-260/mo for a 2 br , and US$125-360 for a 3 br. The fee includes maintenance of the grounds, pools, 24-hour security, water, maintenance of the beach, etc.
Is there Financing?
Yes. With a minimum credit bureau score of 640 you can get up to 80% loan-to-value for about 8.5% APR, but it can vary based on loan amount and term, etc.
Can I Rent my Property when I’m not there? What are the Fees?
Of course. We at DR4Sale would be happy 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.
Can I hold Title to Property?
Sure you can. One of the largest UStitle companies, Stewart Title, has offices in all major cities in the Dominican Republic, including Punta Cana. They can provide title and closing services for your DR investment. Contact us for more details.
Why don’t all Properties have Title? and
What is a “Mother” Title?
New construction communities do not come with individual titles until some time AFTER the project is complete. 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 construction is complete, at which time they file to have the “mother” title divided into multiple individual condo titles that will be in the names of the buyers. The reason this process takes time is because the appraisers and surveyors have to come to the project, after construction is completed, to document the construction and define the individual titles with drawings, exact locations, measurements, etc. to complete the title registration information so the 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.