Updated: May 12, 2019
There are many real estate opportunities in the Dominican Republic, however, in order to make purchasing a property a good experience please consider the following suggestions:
1. Translate the Promise of Sale agreement
Before signing the Promise of Sale agreement you or your representative should have the document translated into English or your mother tongue. [For help with translations visit https://bit.ly/2Jf5NQQ]. Please do not take your real estate agent´s or sales person´s word that everything is ok with the agreement. Most Promise of Sale agreements are drafted to protect the construction company or developer instead of the purchaser. For example please confirm if the Promise of Sale agreement provides the following information:
a) Projected date of conclusion for the project
b) Applicable penalties for missed deadline (date of delivery)
c) Confirm developer owns the lot where the property is being built
d) Confirm whether developer obtained the necessary permits and licenses needed to build
e) Applicable penalties for variation in size/measurement of the units
2. If in doubt hire a reputable real estate attorney
An attorney (preferably fluent in English or your mother tongue) should be able to review the contract and address the above mentioned issues. If there is a clause in the contract that you do not agree with then it should be revised until both parties are satisfied. Contact us to speak with an experienced English-speaking real estate lawyer.
3. Please confirm if the property reservation payment is refundable
Often times the amount paid to reserve a unit is non-refundable. Prior to paying the reservation amount please perform the required due-diligence. Do not allow yourself to be rushed by the sales person by claims that there are interested parties in the same unit or that you may lose it if you do not act quickly.
4. If buying a home or condo for investment purposes ask for the projected ROI
Try to learn the occupancy rates of completed units or of properties nearby. Do not believe (without proof) claims of high a ROI. Ask for proof of occupancy rates during different seasons of the year (high, low, medium). Run the numbers yourself to see if the projected ROI is reachable with the occupancy rates provided. Make sure you add other expenses such as furnishings, administration fees, HOA fees, electricity, internet, taxes and other incidental expenses to your calculations in order to formulate a more realistic projection of your potential return.
Please note that the title transferring process needs to be completed and taxes paid within six months of the date purchase before generating monthly tax penalties.
You may calculate the amount of the transfer tax to be payed on the Dominican Tax Agency’s website on the following link: https://dgii.gov.do/servicios/calculadoras/Paginas/CalculadoraTransferenciaInmobiliaria.aspx
Following these and other suggestions will give you peace of mind and save you from many headaches in the future. May your property search and purchase be a success!
Our associates are here to assist you to make the property purchasing process pain free.