Results 1 to 4 of 4
  1. #1
    Newbie
    Join Date
    Jun 2006
    Posts
    9
    Post Thanks / Like

    Default It's About Time!

    I've been following DR1 for the past two years. The best message board in the Caribbean to say the least. It's about time you have a forum dedicated to real estate. I am considering moving to the DR (among other Caribbean islands) in the next few years and look forward to all of the information possible. I have visited twice and like the island alot.

    First question: Why do the advertised prices of built villas rise even as they don't appear to sell? I have been buying and selling real estate in U.S. for the last 30 years and haven't seen this before except for pre-construction offers.

    This strange real estate appreciation process undermines confidence and indicates possible real estate agent manipulation. The DR is one of the few Caribbean islands that doesn't have a multiple listing service. MLS would go a long way towards building the confidence of foreign buyers. The transparency of Comparable Sales is the only real way for buyers to determine real value. Do the existing real estate companies support or fight an possible MLS type system?

    Anyway, it looks like DR1 is the place to be for real estate in the DR. Thanks!

  2. #2
    DR1 Property Center
    Join Date
    Jun 2006
    Posts
    2
    Post Thanks / Like

    Default Real Estate in the Dominican Republic

    First question: Why do the advertised prices of built villas rise even as they don't appear to sell?

    There are several reasons for this, it is a bit complicated and has also to do with some cultural aspects.
    1. Many property owners “invest” their money in real estate properties, and for various reasons, expecting (projecting) a minimum ROI in a certain period of time.
    This expected ROI should be higher than what they could get from the bank. This is one reason why they will not accept anything lower than their expected or projected ROI, and therefore keep their prices high.
    2. Many property owners “follow” the construction prices of new constructed buildings, and these construction prices are most of the time higher then those of months or years back. These owners appreciate their properties not according to their market, but to the market of new, more modern and more sophisticated buildings.
    3. Many owners (sellers) of properties have a habit of “dreaming away”, telling prospect buyers what to do with the property, how to make excellent profits or how much it is going to appreciate in the near future. But these owners don’t do what they preach.
    Their asking price is based on and maintained according to the (huge) profit you are going to make, instead of based on the actual value of the property.
    4. Many property owners think that someone might just appear and pay their asking price, perhaps a baseball player, a top athlete, or someone with a lot of money that does not know or does not care that much.
    5. And mind you that the prices that you normally see are asking prices and not the actual selling prices of the properties.

    Second question: Do the existing real estate companies support or fight an possible MLS type system?
    To answer the question directly, No I do not think that real estate companies are against a MLS type system. It is just a matter of timing and circumstances.
    It will definitely happen, but we probably are in a too early stage of development of the real estate market in the DR for a system like that to function well.

    At this moment there are too many parties and persons involved in real estate negotiations and transactions, many of these without (enough) education, knowledge, integrity, experience, expertise, professionalism and/or even without a business background.
    Many of these persons don’t know what they are talking about, but they keep talking.

    My advice to you is to take your time to select some one knowledgeable, experienced and trustable, a well informed professional with expertise and integrity and stay with that one person. It will pay off in the end.


    And yes, I completely agree with you:
    The DR is definitely the place to be in the Caribbean, and it is getting better all the time!

  3. #3
    DR1 Property Center
    Join Date
    Jun 2006
    Posts
    7
    Post Thanks / Like

    Default

    Quote Originally Posted by Glenn
    Second question: Do the existing real estate companies support or fight an possible MLS type system?
    To answer the question directly, No I do not think that real estate companies are against a MLS type system. It is just a matter of timing and circumstances.
    It will definitely happen, but we probably are in a too early stage of development of the real estate market in the DR for a system like that to function well.

    At this moment there are too many parties and persons involved in real estate negotiations and transactions, many of these without (enough) education, knowledge, integrity, experience, expertise, professionalism and/or even without a business background.
    Many of these persons don’t know what they are talking about, but they keep talking.
    Agreed Glenn, when the realtors get educated and there's a serious ruling body over real estate transactions...as in the USA for example then an MLS system would be a great idea.

  4. #4
    Newbie
    Join Date
    Jun 2006
    Posts
    9
    Post Thanks / Like

    Default

    Glenn-
    Thanks for the detailed response. The concept of using "return on investment" (ROI) as a basis for determining asking price is somewhat crazy. My guess is when the seller does get serious, the actual sales price is way below the asking price. Good information for a prospective buyer to know.

    When we were in the DR last year we looked at a building lot within a highly regarded "secure gated" development we liked alot. But after a spending some time walking around the community, we noticed that each villa within the gates had their own 24 hour guards. Didn't like that. Security is a real concern from what I can tell. Apparently, a guard at the gate does not security make.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •