I still don't get it, negotiation in $US, payment in RD$?

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Anastacio

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Feb 22, 2010
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Been here long enough to feel these things should be understood in full. When negotiating with Dominicans I often find they want to negotiate in US$, then I have to convert it and still pay in pesos, the amount of money isn't changing, they don't get the cash in US$, if anything it is simply a pain in the a$$.
I have a theory that most of these people don't even understand it themselves, I truely can't see any benefit in this at all other than maybe one or two pesos here or there in the exchange and making things more stressful and complicated than need be.
Please, can someone just tell me simply what this is all about.

Is anyone else out there as confused as I am?
 
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Bernard Jean-Pierre

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Oct 31, 2010
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Wait til you negociate in US dollars, pay in Pesos and get change in candy- chicle, mentas. Then you will really be baffled. Just one of those things.
 
genistar

genistar

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Jul 29, 2009
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I have a theory.

I've noticed the same thing. I suspect it's because I'm a foreigner. They automatically assume you want to deal in US$. Whenever I get this (which is often) I politely tell them I don't carry dollars, I carry pesos, so please let's continue the discussion accordingly. This has always worked every single time. My wife and her family don't get the US$ quotes ever. Ok... maybe once when her brother was looking into buying a dog from a breeder (I guess the dog was getting imported from the US or something). Other than that, zippo... pesos each and every time.
 
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Anastacio

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Feb 22, 2010
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I figured from some of the conversations I have that they themselves are not sure why. I recently had a conversation/negotiation where I was trying to get better terms, reducing the price from $500us to 16,000Rd$.The conversation went a little like,
where are you from? I'm English.
Oh but your from the states? No, I'm English, British.
Oh, from the UK! Right, my offer on the table is 16000 pesos.
Oh, I need to use Dollars! I don't use Dollars, I'm English and in the Republic. But let me do the math fir you. I won't be paying in Dollars, you do know that?
Oh, no problem, I just do business in Dollars!
And so the conversation went on.

In my mind I'm thinking, no you don't, you have a number in US$, it gets converted and paid in pesos, WTF.
This person is a very intelligent and quite wealthy person so I'm not dealing with some street punk withnothing between his ears.

Anyway, glad I'm not the only one confused by this.

It is a bit like when Americans used to come up to me and tell me we Brits had more money than them because of the exchange rate, what? No we don't, 1pound is not the same value as 1dollar so because we get more than 1dollar out of our pound doesn't mean we have more money. Sounds nuts but I used to get that all the time when I met Americans.
 
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Bob K

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Aug 16, 2004
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I have always asked for the price in pesos and go from there. Never a problem with them using pesos instead of dollrars.

Bob K
 
cobraboy

cobraboy

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Jul 24, 2004
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Negotiating in US$ means there is automatice price increases/inflation adjustment built in.

VERY common.

If you can makea purchase agreement or contract in pesos only, you found some money.

Our old house lease was in dollars, and cost 12% more when we left in pesos. Our current house is in peses and has gone down 8% in dollars.
 
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DMV123

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Mar 31, 2010
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People are trying to protect themselves from what happened 7 years ago. If your agreement is in dollars then there is some protection for them. they do not see the peso gaining alot of strength but can see it falling.

With an agreement in dollars you absorb most of the currency risk.It makes perfect sense for them.
 
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Chip

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Jul 25, 2007
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Santiago
Generally when a Dominican wants to negotiate in dollars it's because they have the perception you are foreigner and therefore you will be willing to pay a premium rate.

My advice, ignore any Dominican who wants to negotiate in dollars.
 
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Anastacio

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Feb 22, 2010
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I sort of am dismissing thier need to talk $US by repeating my offer of 16000, on the table, that is my offer. I will be sure we close in pesos, if we do or I'll move on.
 
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Taino808

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Oct 10, 2010
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DMV123 said:
People are trying to protect themselves from what happened 7 years ago. If your agreement is in dollars then there is some protection for them. they do not see the peso gaining alot of strength but can see it falling.

With an agreement in dollars you absorb most of the currency risk.It makes perfect sense for them.
Click to expand...

Most people don?t understand this, but your exactly right.

Any good business savvy person will only rent in US dollars, because if the exchange rate goes south, the renter losses money. However, if the business is done in US currency then the renter is protected, and the tenant is as well because they end up paying the same, no matter of the exchange rate.
 
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DMV123

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Taino808 said:
Most people don?t understand this, but your exactly right.

Any good business savvy person will only rent in US dollars, because if the exchange rate goes south, the renter losses money. However, if the business is done in US currency then the renter is protected, and the tenant is as well because they end up paying the same, no matter of the exchange rate.
Click to expand...

Agreed EXCEPT the renter also has to receive income based on American dollars OR they will absorb the exchange rate fluctuations. I protect myself by negotiating my payments in pesos and getting paid in US dollars.
 
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DavidZ

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If it's a small transaction, especially in one of the tourist areas, then it's probably a Dominican trying to get an edge and a few extra pesos off a foreigner. If it is a large transaction, it is probably because the numbers get a bit daunting and confusing to follow... i.e. $100,000 USD is currently around 3.72 Million pesos...I've noticed quite often Dominicans don't like speaking in such high numbers, especially if they are translating it back to English as they are negotiating...
 
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shawn27

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May 24, 2010
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I pay for everything in dollars. Even restaurants accept dollars. It's just easier that way. Taxi, hotel, they all charge dollars. I rarely use pesos in DR.
 
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Chip

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Jul 25, 2007
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Look you guys, don't be fooled when a Dominican talks about costs in terms of dollars 100% of the time they are:

1. Trying to impress another Dominican.

2. Using it as an excuse to rip off a gringo.

I bought my house here in the DR for RD3.7M and not once were dollars mentioned.

I bought my car for RD450k and not once dollars was discussed.

The obvious exclusions are Domincans who are buying stuff abroad.
 
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DavidZ

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shawn27 said:
I pay for everything in dollars. Even restaurants accept dollars. It's just easier that way. Taxi, hotel, they all charge dollars. I rarely use pesos in DR.
Click to expand...

It may be easier shawn, but it's guaranteed that even if no one is trying to rip you off, you are paying 5-25% more for EVERYTHING you pay for in dollars. Even hotels will not give you the same exchange rate you would get at a bank or Cambio...
 
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Taino808

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Oct 10, 2010
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I myself have a few apartment buildings, and an office park here in Santiago. All my rentals are done in UD dollars. Reason being, way back in 2004 I lost a lot of cash when the exchange rate went as high as 60 pesos to one US dollar.

If a tenant was paying me $30,000 pesos for an office, back then the exchange rate was 27 pesos to a US dollar. this office was bringing in roughly $1,100 dollars a month. After the chaos with the 60 to one exchange rate, I was now making $500 dollars for the same rental.

Hope this explains thing, not trying to beat anyone, just good busines sense.
 
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RacerX

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Anastacio said:
So their truely is no point other than to make something relatively simple, complicated?
Click to expand...

I think what they want it to negotiate in a currency that is constant. It s hard to make a deal when the national currency floats up and down in relation to the dollar. Then paying in pesos is because there aint enough dollars in any ones presence to actually pay in that.
My problem is that when you go into a shop or someplace like this, a commercial enterprise, they dont keep enough money on hand to make change. How does a 1000 peso note shut down the whole supermarket? So now, you find yourself buying all type of trinkets just to get whatever change they have in the cash register.
 
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Anastacio

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Feb 22, 2010
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Taino808 said:
I myself have a few apartment buildings, and an office park here in Santiago. All my rentals are done in UD dollars. Reason being, way back in 2004 I lost a lot of cash when the exchange rate went as high as 60 pesos to one US dollar.

If a tenant was paying me $30,000 pesos for an office, back then the exchange rate was 27 pesos to a US dollar. this office was bringing in roughly $1,100 dollars a month. After the chaos with the 60 to one exchange rate, I was now making $500 dollars for the same rental.

Hope this explains thing, not trying to beat anyone, just good busines sense.
Click to expand...

Yeh, that clears it up perfectly for me. Well to a certain degree, does this effect me as the payee? I earn in Pesos but my salary is also worked in US$. This is where I get confusled about who if anyone loses out and who gains in an ongoing payment plan, would I need to keep things in pesos to keep myself safe if this was an ongoing payment arrangement rather than a one off?
 
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