R E L I A B L E R E L I A B L E R E A L T Y SRL
Plaza Artistica, Local 2-2, El Cortecito/ Bavaro Ofc: 809-552-0898/ Fax: 1-810-213-1474 Office@reliablerealtydr.com/ www.reliablerealtydr.com
FAQ’S ABOUT CONSIDERING PUNTA CANA (BAVARO)
AS YOUR REAL ESTATE INVESTMENT DESTINATION:
What is the real estate market like ? Excellent... Smart investors always look for the stable countries who show consistant growth and progress. According to the World Bank (Sept. 2015); for the past two decades, the Dominican Republic (DR) has been one of the fastest growing economies in the Latin America and Caribbean Region, with GDP growth averaging around 5.4 percent annually between 1992 and 2014. Since 2010 Punta Cana & Bavaro have consistently been leaders in popularity, growth, and infrastructure with much of this growth going hand in hand with the healthy real estate market here in the Dominican Republic; especially those sectors supporting tourism… Like Punta Cana (Bavaro), Samana, Las Terrenas, Santo Domingo, Puerta Plata (Sosua and Cabarete).
Real estate sales, specifically in Punta Cana (Bavaro) have tremendously contributed to this impressive country growth over just a short period of time (2009 to current). Post-construction properties (resales) rates are appreciating better and faster than the average international market trends... whereas, Pre-construction purchases are appreciating at an even more impressive rate annually.
How do I know a particular condo or home is "safe" to buy? You don't and it would be very difficult if not impossible to find out. However, as a Broker of one of the top real estate agencies in Punta Cana (Bavaro), we make it our mission to make your real estate experience and venture here as stress free as possible. For example, we research developers and often require they provide to us evidence that they have applied and received the requried building permits, have followed the approved masterplans, adhere to strict building codes; have submited all the documents required on a timely basis, all required in order to achieve individual titles. The developers we choose to represent have a proven track record and reputation for quality construction, and are able to complete the entire development (condo or residential community) within or close to the estimated completion and delivery dates (sometimes rain days or material shipments can delay a project). We go one step further to assure all resale listings have a legitamate title, or documentation the individual title is in process... If we are uncertain, we pay attorney's prior to listing and promoting a property to confirm titles are good, with no liens or encumbrances.
Can I hold title to property in my name? Yes indeed! Unlike other tropical or Caribbean destinations where buyers cannot secure title in their own names, or must put the title in a bank or other person’s name and/ or wait 50 or more years; here in the Dominican Republic all titled properties are “freehold” meaning they are easily transferable into the new owner’s names.
Should I be concerned about which agency I choose to work with? Absolutely! It is advisable to seek out a reputable agency with a good track record. Typically if the credentials of the agent, broker or agency are not included in their website or if they do not have qualified testimonials on their website… caution is highly advised. Anyone can throw together a fancy website with pretty pictures, but often they do not have an office, or sometime even legal listings… rather they are “borrowing” listings from other agencies, simply looking for a quick referral commission. This often leaves buyers out in the cold with no direct or personal guidance.
Who can sell Real Estate? The Dominican Republic does not require real estate licensing; therefore just about anybody can sell real estate… from the cook or maid at your resort, to your taxi cab driver. And trust me; they will try to introduce you to somebody who has a property to sell; even if it is not titled or even where or what you are looking for. THIS IS WHY IT IS SO IMPORTANT TO SEEK OUT A REPUTABLE AGENCY THAT HAS A PROVEN AND RESPECTED TRACK RECORD HERE.
Many people believe they are “safe” when securing real estate through an international brand name. Not always true as many international franchise headquarters will often admit there are country jurisdictions they cannot cross in many cases of complaints, misrepresentation, grievances or law suits. If you are North American it is advisable to also seek out North American brokers who understand the North American expectations. Agencies who have a strong personal knowledge of the area, healty ties with the locals and the community, those who secure reputable and experienced attorneys, and who operate a legitimate Dominican Corporation with a physical office.
I heard Attorney's must be involved in all real estate transactions. Is this true and how do we know the attorney is right for us? Yes, Attorneys must be secured here for all real estate transactions, and it is advisable to seek out a reputable attorney who is well versed in real estate transactions from start to finish (all the way to the title). Reliable Realty takes the headache out of this search and uncertainty. We assist as liason's with the most qualified and ethical real estate attorneys, who understand the North American expectations when purchasing real estate abroad and help to eliminate this anxiety altogeher.
Is it true all Sale Contracts are in Spanish? If I don't speak Spanish, how do I know what the contract says? Yes, Since this is a Spanish speaking country, all contracts must be in Spanish. If you do not speak Spanish, again, it is important to secure ethical and established attorneys who speak, read, and write fluent English. The Legal fees typically include a complimentary English translation for non-Spanish speaking buyers and sellers. Reliable Realty secures the best legal services with Attorney's who have a solid track record and who speak, read and write fluent English and Spanish.
How much are the typical legal costs for real estate and what does it include? The cost depends on the property,any unique characteristics, conditions, and of course the negotiation (a few examples), However, using our $150,000 two-bedroom condo example, located in the beach-town area of El Cortecito or Los Corales (Bavaro)... The legal fees for both contracts; The 1st called the Promise of Sale; and the final contract, called the Definitive, along with the complimentary English translation, the Power of Attorney (needed to record the sale and pay the transfer tax on your behalf if you are not going to physically be here); the physical recording of the sale documents with the register of deeds, The physical payment of the one time 3% transfer title tax, properly registering the sale with the tax department, plus all the expenses and per diems, will cost around $1,200.00 to $1,500.00 U.S. CAUTION, if you are quoted much lower, beware the attorney may not be well versed in all the real estate laws and taxes…the process may take much longer , the sale may not be fully executed… and/ or the attorney may ask for more later.
How long will it take to buy a property if I have the cash? The process for a cash sale can take as little as 2 weeks, to perhaps no more than 30 days. Our agency assist every step of the way… all the way to title, furnishings, accessorizing, remodeling, insurance, and full property management/ rental booking services.
Is financing available there? Yes, but to be honest, bank loans can be very challenging to secure here for foreigners. Additionally because Punta Cana / Bavaro are not depreciated markets, banks do not need to offer low bank mortgage rates as incentives. Although bank mortgage rates have gone down from 12% in 2007 to around 7.5% average in 2015, the process does take 4-6 months with request for numerous financial documents and requirements, including a credit report via TransUnion. With this said, most investors purchase with cash… thus sustaining a stronger overall economy and real estate market.
What about Owner financing? Yes, there are a handful of motivated owners who may offer private or direct financing with perhaps 40% to 60% down and offer this at lower interest rate than the banks here, and more than the banks at home; perhaps around 5 - 6% over 4-6 years. In this case, a “Conditional Sales Contract” would be secured, and the title would be held in escrow with an attorney in case of default. This “direct owner or private financing” works best if the seller is a reputable developer here, or if the purchasers and the sellers are both from the same country so other jurisdictions can be implemented in case of default from either party. Canada and the U.S. or North America do offer real estate investment jurisdiction rights established via the Free Trade Agreement signed in 1988.
What are the fees for buying property? There are very few fees involved with buying a property in the DR. The average estimate runs approximately 4% to 5% of the agreed purchase price and includes all the legal contracts, registering the sale with the register of deeds. The closing costs include the one-time 3% transfer tax, based on the assessed value V.S. the market value, which can be around 1/3 to ½ of the purchase price (or market value).
What can I expect to pay in Transfer Tax or Property Tax? Using the 2 bedroom / $150,000 sale example, If you are the 2nd or maybe even 3rd buyer, and buying a non-ocean view property in a condo community by the beach; say in El Cortecito,AND assuming the registration of the former sale and the transfer tax amount was accurately done at the lower assessed value (not the higher appraised value), your one-time 3% transfer tax rate could be around 40% of the market value (or appraised value); or on $60,000 (x 3%) = $1,800.00 U.S total one time 3% transfer tax.
As a bonus, (with the $150,000 purchase example) since the assessed value was around $60,000 of nd way under the maximum 6.5 million pesos (or approx. $150,000 U.S.) you would also qualify for the 10 year Property Tax:Exemption! Remember the property tax and one time 3% transfer tax should always be based on the Assessed value (not the selling price, market or Appraised value). Some attorney's or agents not qualified in real estate sales (or those double-dipping) may record the purchase incorrectly causing assessed values to increase way too fast. So using the proper equations above, realistically you might be able to purchase a $300,000 newer condo or home, still holding a lower assessed value, and still qualify for the 10 year property tax exemption!
I heard condos in beach-front communities in Punta Cana (Bavaro) may not qualify for the property tax exemption. Is this true and if so why? Yes, it is true. This is because condos located in beachfront communities in the touristic zones, have higher assessed values than those condos across the street from the beach (say a 6-9 minute walk away). Often the assessed values in beach-front communities are the same as the purchase price, market value, or appraised value (all equate to the same here). Since a furnished 1200 - 1400 sq. ft. 2 bedroom with ocean view sells for around $340,000 (average) here, and assuming the assessed value was about the same, $340,000 would equate to approximately which often equaling the asking price (or market value). So it is highly unlikely buyers will qualify from this 10 year property tax exemption in a beachfront condo community. However, if they are the first buyers, they may still qualify for the 3% transfer tax exemption if the beach-front condo community quailifes for the Comfortur (first buyer) program.
Is the Insurance good and how much does it cost? Buying homeowners insurance as part of the closing is NOT a legal requirement here if you are purchasing with cash. However, homeowners insurance is always highly recommended, and for our agency, it is manditory if you plan to leverage as a vacation rental as it also cover your furnishings (contents) and by adding the tenant waiver, it protects you from tenant liability . For our $150,000 condo purchase example, the cost would be around 0.8% of the market value or $1,200.000 annually. Many owners do not over-insure, saving money because properties here are built of solid concrete with lots of rebar… so damage by fire or even flooding is drastically reduced. Insurance brokers our agency works are affiliated with all the top insurance companies in the country. Some of these agencies have been in operation for well over 50 years and are even affiliated with the major banks. Claims are quickly evaluated and assuming legitamate, are paid in very reasonable time frames. These insurance policies cover everything you would expect to see on an insurance policy in N. America.
ESTIMATED TOTAL CLOSING COSTS: For our example of a $150,000 purchase = approx. $4.500.00 U.S. or less. Upon seletion of a specific unit, our agency can provide our CLOSING COST/ COST OF OWNERSHIP/ RENTAL POTENTIAL WORKSHEET so you will have no surprises.
What are the average Real Estate Commissions? In almost all real estate transactions here, the sellers pay the real estate commissions. Commissions can of course vary per the seller and / or developer (for new or pre-construction), the asking price of the real estate, but the average is typically around 5% - 6% here.
What does the buying process look like? Well this depends on the Real Estate Agency or representative you decide to work with. Since Reliable Realty clients are primarily North American, and because the Broker (Maria) still holds in escrow a U.S. Real Estate License, Reliable Realty instills many of the processes North Americans are accustomed to, so as to eliminate the stress and anxiety of buying a property in a foreign country. We stand by our ethics and reputation in the market by assisting our valuable buying clients all the way from the initial Q&A (research) period, done typically via email and skype calls… to matching our clients criteria’s with the best titled properties. We work hard as your liaison between the sellers, the attorney’s and other needed 3rd parties in all aspects. We not only take the extra time to assure a title is free and clear on the front end, but we also estimate your closing costs, provide a list of closing costs and estimated cost of ownership, if buying an investment property, we can provide the rental income / expense reports (only after physically narrowing down a property), and we make sure the sales process is fully executed so our clients can easily attain title. REMEMBER there are no real estate licensing mandates here, silver-tonged agents or untrained sales representatives may not be fully disclosing the full facts about the title situation, taxes, or perhaps even latent concerns (plumbing, electrical or other hidden defects).
What are the costs of ownership in Punta Cana? Very affordable! It really depends on your purchase decision. Please contact us for all the details. firstname.lastname@example.org // 809-552-0898 office. Or contact us from this webstie.
Can, or should I rent my property when I’m not there? For sure, in fact 7 of 10 Reliable Realty sales, the buyers were specifically looking at purchasing a property that would, in essence, “pay for itself“ via rental income; this one of their top priorities. And why not? It makes sense to purchase now (while prices are still affordable) and to leverage the property as a vacation rental. This income can easily cover the cost of ownership (electricity, cable TV, insurance, internet, condo fees, general repairs and maintenance as well as the Property Management fees. In fact, most owners do even better than that. Keep in mind, the rental income will not provide enough revenue to pay the cost of ownership AND a mortgage… if this were the case, Reliable Realty would just buy them all J !
Extra upfront costs can be saved for those purchasing “turn-key” properties already furnished, accessorized and in our management and rental program. As a bonus, many of these new owners benefit from booked rental income at close. Renting your property is highly recommended not only in revenue, but to also assure your investment is looked after when you are not here. Even if you don’t want to rent it out, owners must realize this is the tropic’s; meaning sun, sand, salt, humidity and insects can cause great havoc to their properties if they are not maintained on a regular basis.
Reputable Property Management makes sure the property is aired out and cleaned on a regular basis, the A/C’s and appliances are in good working order, that there are no plumbing issues or leaks (perhaps from a condo above). Additionally, the property is secured against theft and storms. The monthly fee is very affordable and a no brainer. However, most owners understand it is better to have a property occupied because it will get consistent and professional cleanings, that if anything breaks, it is attended to immediately, and A/C’s and appliances actually last longer when they are in use, rather than sitting for long periods of time, thus letting the natural environmental elements eat away at your investment. Of course, securing a reputable Property Manager is just as important as securing a reputable real estate agent (or agency).
I have a friend (or a friend of a friend) living there, why shouldn't I let them take care of my property? Some owners think they are saving money by having a “friend” watch or manage their property for them at a lower rate. The saying “you get what you pay for” certainly presents itself often in this scenario… too often “friends” think since the owners are not living here, it is easy for them to either live in the property (without paying), or rent it out without notifying the owner… thus giving them a nice income. Often these “friends” or unregistered managers do not have access to the resources needed in case of an emergency repair… they may not be paying your utilities as promised, causing electric and water shut-off’s. Additionally if they are not a registered company, there is no recourse (insurance) should something serious happen with the property, or a visitor in your property; nor are you protected from possible tax liability like you would be by securing services through a registered tax paying company.
“Reliable Property Management Services” uses state of the art property management software, providing you with detailed invoicing statements. RPM can manage all the details of your rental on your behalf, including the payment of utilities, cleanings, repairs and maintenance issues. Property Management fees may vary (i.e. lower rates for owners with more than one property in our care and/ or owners who purchased the property through our agency), but our standard rate is 25% of the rental amount secured. And for those properties leveraged as vacation rentals, we are only paid if we can secure rentals for our clients. Other similar management companies may not offer the same full services and may charge up to 30% or 35%, plus an additional flat monthly rate and bill paying fees. SEE OUR FULL SERVICE OVERVIEW under the Property Management page of our website.
What kind of time and attention can I expect? For serious buying clients (whether ready now or not quite yet)... We will and continue to provide the one-on-one personal service we wish we had when we first ventured here. We are a very busy and sought after agency, so of course we must spend our quality time and efforts with those clients who are serious and loyal. Therefore, if you are serious about purchasing, we will be happy to spend a half day, a full day, (or more time if needed) in really showing you properties that best meet your criteria’s, providing all the answers to all your questioins and sincerely share with you our indepth knowledge. We will listen to your specific goals and needs. And since we believe LIFESTYLE is just as important as the property selection, we will physically introduce you to the area (neighborhoods) and amenties AT NO COST !
Our business does not operate like timeshares or vacation clubs. We know the research, education, property search and relationship building phases can often take time. We do not have time chase or pester leads. When our clients are ready, willing and able, we hope they will not just evaluate what they "believe" is a good price, but instead look more deeply and long term and select an agency they can sincerely trust and who will be there for them long after the intial sale.
Walk in's are of course always welcome, and we invite those who may be living here, or perhaps renting here to stop by anytime to set up a time to chat. Please know it is very rare we can just fly out the door to view a property. Some of our FOR SALE properties are also leveraged as vacation rentals and we must respect our vacationing guest time with a 24 hour showing notice. Chances are we even know of other properties that will be better suited. We recieve ongoing new listings weekly, so our inventory does change often.
However, If you are in the researching stage (which is common), and OK... or if you are working with multiple agencies... No problem, we hope you'll check us out too However, we appreciate your honesty and to eliminate the "guilt game" we do offer our comprehensive Real Estate Assessment Tour at a modest fee to simply cover our costs. The tour includes viewing 6-8 matched or close to matched properties, exploration and explainating of the supporting neighborhoods, amenities and culture... PLUS lunch, and drinks throughout the day, PLUS a very nice Souviner Beach Bag full of usable goodies. This fee will be refunded should you decide to purchase a property within one year after the tour date. A WIN-WIN PROGRAM!
ON A PERSONAL NOTE: Although it is smart to do your research, our agency does not take kindly to those who attempt to capitalize from our kindness and knowledge, yet with no intention of buying a property at all or through our agency. We consistently hear feedback about unsuspecting buyers who “think” they purchased a property at a great steal all on their own, or through an unregistered agent, agency, attorney or individual, yet find out later they were lied too and perhaps even ripped off. Not even knowing if they legally own the property they paid for. These self-doers who do not understand the culture or how real estate works here could be in for a big shock! Besides, it is highly probable we can sell the same property they were considering, or a better one. One with a free and clear title too, thus saving them money on the front end, and perhaps the back-end too.
We also do not take kindly to unregistered “Get Rich Quick” Real Estate and/ or Property Management Companies who piggy-back off our hard-earned and learned wisdom and business practices. Only to leave the country once they either fall into short-term financial success, or run into unexpected financial losses, thus leaving a messy trail behind them.
Maintaining an ethical and Reliable Real Estate Agency and Management company isn’t easy, espcially in a developing Latin Country where life is way more laid back. It takes time, patience, research, a strong presence in the market, solid relationships in the area, combined with good working capital and experience that can only be “earned” by actually living here and through hard-work, and sacrifices… validated through a history of transparent business practices, a long list of testimonials, repeat business, and ongoing referrals.
Credentials: Reliable Realty SRL We are so proud of our team and our testimonials from our loyal and satisfied OWNER clients who have been using our services for several years. Some owners have solidfied this loyalty and trust by purchasing more than 1 property through our agency. Our business comes primarily from our testimonials, word of mouth, repeat business, and from our satisfied and repeat vacation rental guests. As of early 2016, Reliable Realty successfully manages over 70 properties and services over 4000 vacationers annually.
Reliable Realty was busy before being selected to participate in 2 episodes of HGTV Caribbean Life, and before we were invited to participate in the IREL podcast (for international real estate investors). Our exposure in these venues as well as other print and media is humbling. For sure we feel blessed and it feels great knowing we can sleep at night with a clear conscience!
For more details about the buying process, taxes, our properties, and / or our Full Real Estate and Property Management/ Vacation Rental booking services, let’s talk! Either by email, phone,SKYPE, and / or preferably face to face when you get here!
Disclaimer: While every effort has been made to ensure the accuracy of this information his resource is not intended to provide legal advice due to changes in laws, regulations, prices, market conditions, and because individual situations will differ. If you are considering a real estate investment in the Dominican Republic, your questions / concerns should be discussed with a reputable agent, tax advisor and/or lawyer within the Dominican Republic. For specific advice on the information provided and related topics, please contact Reliable Realty for the most current information. If this information is seen on another agency or person’s website or promotional materials, please notify Reliable Realty to confirm the use was authorized.