For the potential homebuyer new to this country and the way that some business here is conducted, I think it is appropriate to cover some of the “basics” of the Dominican housing market that could prove useful. Overriding factors centre on the availability of quality, correct, unbiased and up-to-date information, the availability of funds to buy property and finding a decent real estate agent that knows the workings of the market.
The Internet has undoubtedly helped open up the global housing market; it has also occasionally hindered those individuals intent on finding property, good agents or simple, accurate information by themselves. Often, one comes across websites and articles written several months or even years ago, that give the impression that there still exists the opportunity to buy a perfect little place – the “dreamers” idea of paradise. We would all love to own a little house on the beach with a pretty little fence surrounding it, with fishing boats in the bay, calm turquoise water and a hammock slung between two palm trees.
The fact of the matter is that these places only exist in our imagination, there is no such thing, and if it did ever exist here on the North Coast it would have been torn down by now and replaced with an apartment complex. To this day, we occasionally receive calls from individuals who believe that oceanfront land can be bought for around $5 per meter and construction costs are just a couple of hundred dollars per square meter. Naturally, the same callers would like to finance the deal with a 10% deposit and that brings me on to the next point which is that finance here is pretty much non-existent. There are (of course) exceptions to this “rule” but in general our market is driven by the ability to pay cash.
Because of this, on the one hand, If cheap money were available the basic law of supply and demand dictates that prices would be considerably higher as the market becomes available to more buyers, but on the other hand, our market is more-or-less limited to those with the funds to pay in full. A knock-on effect of this situation is that at this time our market is holding up well despite the current wave of global credit crises.
In the Dominican Republic there is absolutely no regulation of the real estate industry. There is no government requirement, no examination board, no tests, no check-ups, no audits not even an MLS (multiple listing service) system. The only way to verify the quality of the agent that you might choose is either through their experience and the length of time that they have been in business, by referral, or by sticking with one of the major global names. As an example, I work for a global brand and I consider myself very fortunate to do so.
We have many individuals contact us on a monthly basis asking to work in our office, and all the sales agents that work in my office know that their performance is being monitored, and not just at grass-roots level but all the way up through the entire organization.
If we assume that a buyer decided to buy through a recognised “brand” name, and something went wrong, then to a certain extent there is the chance to make a formal complaint against the agent and or his company. Consequently you can ask yourself if a multi-million dollar branch of one of the big companies is likely to try to sell something that is bogus or illegal to you as an individual. The chances are that they would not. Things to look for when dealing with any real estate office are:
Check who answers the ‘phone – Is it the agent? Are you dealing with a one-man-band?
Look for an office address – Do these people work from home?
And now – before I get myself into too much trouble, I need to mention the exceptions, because there always are. I know of a small handful of buyers-brokers who have good reputations, work from home and have poor quality websites! It’s easy to spot the good buyers-brokers because they should be happy to work with other agents in order to get you a good home. If you ask to see a number of properties and they keep making excuses about them, then they aren’t working for you. They aren’t buyers-brokers!
It’s a sad fact that sometimes people get caught up in the strangest of circumstances and buy from some guy who they met on the beach, who knows a really good piece of land that is going cheap because the owner needs the cash for an operation and whose brother, uncle, cousin happens to be a lawyer who will work for nothing in order to get a good deal. It sounds laughable, you wouldn’t go through with such a purchase in your own country but inevitably these horror stories continue to circulate, and the buyer rarely admits to the full extent of his or her own stupidity. If it looks too good to be true then it is!
Home ownership is more-or-less open to anyone from anywhere subject to a simple health (and no doubt background) screening. It is easy and quite inexpensive to apply for residency but even this is not mandatory (although I strongly advise it).
And finally, let me explain a little about the purchasing procedure. Should you find a property that you wish to purchase, you will need to instruct a lawyer who will carry out the process of due diligence on your behalf. The real estate agent will recommend one or two to you.
It is the lawyer’s job to check that the title is available, in the sellers’ name and clear of debt. Sometimes buyer and seller will have the same lawyer and this practice is not unusual, however, if you don’t like the circumstances then ask to change lawyer. Your lawyer should also speak English and do make sure that he or she speaks it well enough to understand and answer correctly any concerns that you might have.
Closing costs will include legal fees and taxes (where applicable) and should be discussed before business commences. The ultimate contract of sale will be in Spanish but you certainly should have an English translation of the document given to you at the time of signing. If you don’t understand something then ask questions, your agent is there to help you.
Good Luck!
Simon Hall
RE/MAX Coral Bay Realty
Plaza del Sol
Calle del Ayuntamiento, Sosua,
Dominican Republic
Cel: 1-809-994-5705
Tel: 1-809-571-9990
Fax: 1-809-571-9991
skype: simon-remax
