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Buying property
After an idyllic vacation, you may be wondering about the possibility of putting down roots here or purchasing a place to which you could return year after year. Maybe your employer has required you to spend some time in the D.R., and you would like to live somewhere other than a hotel room. Following are answers to some basic questions about buying property .

What are some common Dominican terms related to the purchase of property?
Bienes raices or inmuebles are the most common Spanish terms for "real estate." Inmobiliaria refers more to a business that buys and sells real estate. A solar or parcela is a tract of land and a mortgage is an hipoteca. Watch out for the words alquiler and alquilar: the first is a noun, referring to renting or letting, while the second is a verb. 

How can I find suitable housing in Santo Domingo?
Newspaper classifieds. Many newspapers publish advertisements for property, either in the classified section (under any of the terms mentioned above) or scattered throughout the paper; you might find just the thing in the sports or fashion supplements. The Listin Diario is the newspaper with the most real estate classified ads.

Real estate companies. Real estate companies (estate agents) can also help you find a suitable place. Likewise there are several real estate companies with good track records from which you can buy directly. In recent years, major US real estate companies have opened franchises here. 

Word of mouth and networking. Because many houses and apartments are not listed in the paper or placed with an agent, you are well advised to tell everyone you meet of your search. Someone may have a cousin who is just about to sell an ideal place. In all cases, remember to ask lots of questions before taking the trouble to visit. Estate agents or others who contact you could be more interested in selling what they have on their books than in meeting your exact specifications. 


Are there any special characteristics I should look for in a place to live?
There are still frequent power failures in Santo Domingo, so it is important to inquire as to whether there is a planta (generator) or inversor (power back-up system). Although you may think the idea of candlelit dinners sounds romantic, remember that you may not be able to cook or bathe if you have no electricity. Even if there is a back-up system, find out whether it provides full power (many will not run air-conditioners or elevators, for example) and what timetable determines its use. If you are at work, it may not matter to you that the generator is not used during the day. If, however, you have just bought six bags of groceries and face eight flights of stairs yin the dark, you will regret not ascertaining the schedule in advance.

Determine your priorities about location: near work, schools, shops, parks and public transport? Ask Dominicans about the reputation of different neighborhoods.

If you have a vehicle, find out whether there are adequate parking facilities for you and your guests. Some streets have restricted parking, and some buildings do not have enough spaces for their residents, much less for visitors. 
If you do not have a car, ask about the nearest access to public transportation. Some parts of the city have virtually none, while others are well served. 

Some houses and apartments retain heat, while others capture fresh ocean breezes. Visit places at similar times, so that you can make accurate comparisons.

Ask neighbors how often they fumigate and if mosquitoes or cockroaches are a problem. (If the owner has just sprayed, you will not see any.) Check the water heaters. Some luxury buildings have surprisingly small tanks, holding as few as eight U.S. gallons.

There are also all of the “usual” things to examine including: the wiring, plumbing, and structural soundness. 

As a foreigner, am I legally permitted to purchase or rent property?
Yes. Reporting the purchase of a foreigner to government authorities is now only a technicality. 
You may also consider purchasing property after incorporating a company established in the DR. There may be tax advantages to this.

There are no restrictions on foreigners renting real property in the Dominican Republic even under long term leases. 
Title to real property must be registered with local land registries. Prospective purchasers should ask for a copy of the owner’s title, and should take steps to assure that the title may be registered at the time of closing. 
Inheritance taxes should be carefully examined with qualified experts. 

Is a lawyer strictly necessary?
There are many technicalities and possibilities for fraud in the real estate business. People have been known to sell properties which were already mortgaged, which were in the middle of an inheritance dispute or which did not legally belong to them.

A lawyer should be able to evaluate the land, make sure that it meets all of the necessary requirements and determine whether the documentation is legitimate. He can also help you form a company, if necessary, or assist in the necessary government procedures.

A lawyer may indeed save you money. A good lawyer can provide helpful advice on many issues, such as tax issues, that will in the short run reduce the final cost of your property.

Finally, a good lawyer should be able to inform you about all the technicalities. For example, people purchasing undeveloped land are required to “improve” it within a certain period of time. Even a shack, it seems, may be considered an “improvement.” Lack of knowledge of these finer points could lead to some inconvenience for the owner. 

How can I find a good lawyer?
The best way is by recommendation from those who have previously used legal services in the area of real estate. It is sensible to consult a variety of people, both Dominicans and foreigners. Remember that the most agreeable person may not be the most capable. Evaluate the recommendations carefully. Find out how long the lawyer has been practicing in the same place. Ask for a list of clients. This should include Dominicans as well as foreigners. You may want to try to contact some of them. A good lawyer will not be offended by your cautious approach. 

What should I look out for if I decide to go it alone?
Check the property title very carefully. Make sure that the seller is the legal owner, and that there are no outstanding debts or inheritance problems. Obtain receipts for any payments and watch out for what is called the promesa de venta (payment promise). These agreements state that if you have not purchased the property by a certain date, you will lose your deposit.

Never sign a contract with any blank lines, regardless of the explanation you are given. It is a good idea to ask for a copy of the contract to review at home. There may be references to laws or decrees which you will need to investigate before signing. (Of course, it would be better still to have a reputable lawyer look over the document for you.)

You may wish to have an independent appraisal of the property to ensure that you are paying a reasonable price. Be sure to ask the previous home owner for current copies of the electricity, telephone, water, maintenance, cable TV, gas or any other applicable bills. If the previous resident has left unpaid debts, you will be held responsible for them. 
Check into your present and future neighbors. Is the area turning commercial now or does it have the potential to do so in the near future? 

What are the advantages of using an estate agent?
A good agent should do all of the leg work for you, eliminating unsuitable places and finding those within your budget. You should not be charged for their services: they are paid by the vendor. If you are a foreigner, it may be to your advantage to have a local company negotiate the price for you, as some people expect foreigners to pay more. On the other hand, if the agent is getting a percentage of the selling price, he or she will not have much motivation to try for a real bargain. The estate agent cannot generally help you with the legal or financial aspects of buying property. 

How can I find a good estate agent?
Many are listed in the telephone directory or in newspaper advertisements. The best bet, however, is to “go Dominican”: get a recommendation from someone whose opinion you trust. 

Members of the Dominican Association of Real Estate Agents (Asociación Dominicana de Agentes Inmobiliarios) have agreed to follow the code of ethics used in over 50 countries and, therefore, in theory, should be reliable. 
Pressure to sign papers immediately or attempts to charge you for transportation to visit properties should be regarded as warning signals that it may be time to change agents. 

Can I finance my purchase in the D.R.? 
It is possible to finance part of your purchase in the Dominican Republic. In theory, mortgages for up to 75% of the property’s value are available from commercial banks, as well as from special mortgage societies. 
The policies regarding repayment vary from institution to institution.The most attractive rates and conditions are available at savings and loan associations (building societies). As of mid 1996, the best rate was 18% and a term of up to 20 years offered by the Asociación Cibao de Ahorros y Préstamos.

Banks even vary internally in their requirements for a loan. A general rule of thumb is that your monthly repayment should not exceed a third of your monthly income. Other factors taken into consideration will be your other financial commitments and the success of your business, if that is the source of your income. 

If you decide to go ahead, you will need to take stacks of documents to the loan department of your chosen bank, including a copy of your passport, an official letter detailing your income, your bank account statements, an identity document other than your passport, the plans of the house you plan to build, if you are purchasing a vacant plot, or the title of the house you wish to purchase. It is probably better to make a personal visit first to ascertain the appropriate documents that you will need to bring.

If you have decided to form a company, you will need to take its statutory papers. In the case of a new company, it is likely that the bank will ask for a personal guarantee. 

Is buying property in Santo Domingo a good investment?
Opinions vary, but the general consensus seems to be that money invested in property is better than money sitting in a bank, and that money invested in a growing business is better than money in blocks and concrete. Property values have traditionally risen, and more so when the U.S. dollar has increased in value against the Dominican peso. The peso has been relatively stable in relation to the dollar for the past six years. 

Like anywhere in the world, location is obviously an important factor. If you are considering investing in a new tourist area, do investigate the past record of the developers. There are numerous unfinished developments around the country, and you may not want to own property in one. 

Check into who is being attracted to the new or promising area. If you are purchasing or building a residence, its value could decrease if the area goes commercial—or you could end up selling out at a much higher price, if the commercial area is successful. 

How do I go about selling my property?
“The same way, only backwards.” Just remember that if you enlist the aid of estate agents, you will have to pay for their services. Note that the usual commission is around 6% of the sale price. 

For more questions and answers on real estate, see the Real Estate pages within the Living Section of dr1.com at Realesate and Buying

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