Always secure the assistance of a knowledgeable, reputable and local Real Estate Agency, who knows this area and the real estate market well. Imperative in securing fully executed contracts and title in your name within 4-8 weeks (NOT 4-8 months)!
Option 1 - Use your Own Money (Cash is King) - i.e. a home equity loan from home
Using your own cash to purchase, whether through savings, liquidating assets, borrowing from friends or family, or securing a home equity loan or line of credit in your home country are the best and easiest ways to secure a property quickly! And provides more negotiation power in getting a better price, terms and conditions.
Option 2 – Direct Owner Financing (Due to the surge in Sales from Apr. 2021 - Dec. 2021 only a handful of properties remain with owner financing)
Since most of our owner clients (sellers) are also North American, they are open to offering direct owner financing to other North Americans (Canadians or Americans). Our agency has successfully assisted in numerous financed sales, with zero defaults, or litigation. Keep in mind, many Sellers are now reaching the old Baby Boomer stage. Meaning, they are not a bank, and want to enjoy their proceeds before they pass on. So typical financing terms might be around 40% – 50% down on the negotiated sale price. For 4-6 years, at 4%-6% interest. Owner financing works here much like in North America. In addition to the legal sales contract, there will also be a finance contract. Upon receipt of the initial down payment, the title will be transferred into the new buyer’s name but will have a lien showing on the back of the title, referencing the original owners. Once the last payment is made, the title will then be fully transferred into the new owners’ names, and the lien will be removed from the back of the title. A title with a lien cannot be used as collateral or an asset here until it is paid for in full. Regardless, this is a great option for those who do not yet have the full amount in cash to purchase, but may have more funds in 4-6 years (i.e. retirement or pension funds, SS, annuity or stock maturities, the sale of another property, kids graduate from college and move away… etc., etc., ) Defaults are addressed in the Sales and finance contracts, as well as the way the monthly payments will be paid (i.e. auto-debit). If a Buyer completed defaults without notice to the Seller, the property goes back to the Seller, and there is no refund to the Buyers. All Sales and finance contracts, as well as all the diligence’s, are done by trusted Dominican Attorneys we have been working with since 2008, who speak, read, and write excellent English (and Spanish)
Option 3 – Lease Purchase (or rent to own)
Similar to option 2, a Buyer/ or lessee, through the creative assistance and representation of a reputable agency and a legal Attorney here, can formulate a longer-term “lease to purchase agreement” with a Seller. The agreement is similar to a mortgage with a bank, but initiates as a lease, secured with a larger deposit, and an agreed payment schedule, which is negotiated by the agency, directly between the Buyer and the Seller. The terms of a lease purchase agreement vary on a case-by-case basis. For more details of some scenario’s, please inquire.
Option 4 – Use your IRA now!
Convert your traditional IRA into a Truly Self-Directed IRA- LLC/ Roth with checkbook control, then use this money as you wish BEFORE YOU RETIRE. This option is perfect for those who are considering buying real estate to leverage as a short-term vacation rental income property now, and who do not plan on living in the purchased property until later. Please consult with a financial consultant versed in Truly Self Directed IRA- LLC, the kind that allow you to use your money to purchase real estate in another country.
For More information start with: IRA FINANCIAL GROUP
Option 5 – Developer Financing over 2 years - Most Develpers/ builders no longer need to provide this option. However, there are a handful of developers where construction is within a 15-20 minute drive to the beach, where Developers will consider offering longer terms of financing with at least 25% down.
Some developers of brand new or developments under construction, have strong financial positions to accept payment terms. For example, 25% down, for 5 years at 7% – 8%. Please contact us to see which developers are currently accepting creative terms.
Option 6 – Finance Pre- or Under Construction Property from a Respected Developer during the construction period (18 mos. - 30 mos.). NOTE: When attempting to buy direct new purchasers from other countries, do not have good and balanced representation. Remember, Sales contracts are in Spanish, and buyers are entitled to also having their own Attorney to review the developers sales contracts. Who will assist you after the construction is finished? Inspection, furnishings. utilities set up, etc.? Please contract us to eliminate the stress and head-ache of trying to buy direct you will not be saving any money. Besides, Developers are under obligation to the Agencies to sell for the same price anyway...
Pre-construction purchases are neck to neck with resale purchases these days. Typical pre-construction terms allow you to finance during the construction period for 18 – 30 months. 18 months for smaller 24-unit condo communities, to up to 30 months for larger 100+ unit condo communities. See video clip on this subject with Reliable Realty Broker, Maria Williams
Many preconstruction developers (builders) offer the best pricing and payment terms. Sometimes these preconstruction condos are purchased for 30% - 40% less than the realized market values once they are finished! This is an excellent way to make a turn-over (or flip) sale, with some investors buying 2 or more units. Keeping 1 (or 2) and re-selling the other units once the supply-demand is perfectly aligned. From 2015-2017 to move inventory more quickly, some developer would agree to stretch the finance payment terms another 12 months after the condo was finished. However, from mid-2017- the first qtr. Of 2020, sales have been turning over so quickly, that many of these developers no longer need to offer this additional extended payment incentive.
Before 2017, many investment advisors in North America were frowning on their clients purchasing pre-construction properties in a developing country, however, the tables have turned, and some investment advisors have now purchase pre-construction through our agency. I believe this is in part to our agencies ability to reduce inherent risk in pre-construction, by only representing reputable developers, who are well-funded, with a strong history of solid construction and successful, fully titled properties. We are in constant correspondence with the developers we select to work with here. They know we look after our client’s best interest very seriously. Since we now have a full service “Project Management Department” we can also be the eyes, ears and "boots on the ground" to our buying clients regarding the status of their “under-construction” condo or villa. Weather, or international shipments of materials brought here by boat can cause delays during rainy season. But for the most part, the completion dates are not long after the "Estimated Completion Dates". I always tell my clients to plan on 3-6 months later than the Developers good "Estimate".
Option 7 – Finance with a Bank in the Dominican Republic
Sorry, this option is becoming more difficult to achieve now as the international banking laws for foreigners buying vacation homes, has become more complicated. Especially with the new “Origin of Real Estate Purchase Funds, LAW 155-17, which thankfully eliminates money laundering schemes by crooked foreigners. Additionally, restrictions from Canada, the U.S., and new restrictions by the Dominican Republic have make the loan approval and process very difficult and time consuming, and bank loans interest rates are very high here. Therefore, we do not work with banks on behalf of our prospective buyers any longer, unless of course, you are Dominican born and hold a Dominican passport. If you are not Dominican, and a bank loan here is still a preference for you, please contact me and I will refer you to a trusted Dominican Mortgage Broker who speaks English. If you qualify, we can work together with you directly on the financing part. Our agency will still conduct the other sale diligence’s (i.e. Negotiation, the Purchase Offer, legal assistance (Attorneys) for the Sales contracts. Once approved and funds are ready (and if needed) we can also provide our Project Management and / or our full service Property Management/ Vacation Rental Booking Services.
Option 8- Rent Out your Property to Vacationers to Offset Loan & Ownership Costs
Our established and reputable real estate agency can provide the full Property Management and GuestServices so you can leverage your property as a viable vacation rental investment. Using this rental income to pay your mortgage/ loan or other ownership costs (such as HOA maintenance fees, electric, cable TV, internet, homeowners insurance, general maintenance and repair costs. Our fees are the lowest in the industry and include taxes. There are no guarantees that rental income will totally cover your payments, especially if there is an additional loan payment, but chances the income achieved will cover a good portion of your “cost of ownership expenses”. And may even allot enough income for you and/or your friends to fly down 2-3 times a year, to enjoy your own vacation dream pad (eliminating resort costs all together).
More information about our full Property Management Services
Reliable Property Management credentials
See our Vacation Rental Website
NOTE: Some properties we manage are additionally featured on VRBO, HomeAway, TripAdvisor (via FlipKey), and AirB&B. Although, we do not recommend AirB&B. Most Property Managers (and owners) will agree AirB&B drives the rental market, and the real estate market down. A higher % of AirB&B tenants tend to be disrespectful to others in the same community. They can problematic tenants often on a tight budget. Some tend to "threaten" to complain for a hopeful refund in exchange for a good review. We will accept AirB&B Bookings, however, we will not play these unfair games. Some condo communities here will not accept tenants secured through AirB&B.
Option 9 –Fractional Ownership
Sorry, we no longer represent Fractional Ownership properties. To be honest, there are no agencies I am aware of in the Dominican Republic representing legal Fraction Ownership property options anymore- perhaps in part, because many new construction communities sell out before they are even finished. So this sales incentives by builders, developers and owners are no longer needed.