Buying real estate in Sosua - any pitfalls?

[LindseyKaufman]

All good advice here. But people are A - Z and there is no one size fits all. Thus not one piece of advice may be right for you. Only you know whether this is something thought out or if it is a whim. Only you know risks and things you have adapted to in the past. Only you know what your future plans may be. Only you know your financial situation.

You sound pretty sensible to me.

Thus, counter to the above wisdom.....which was good advice....

I came here 12 years ago after living in Africa for 6 years. I visited one weekend and looked at homes. About a month later, I visited again and decided what I wanted to buy. I bought.

At that point, I spoke only a little Spanish.

Had a house with a casita for a worker. When I returned to the US, the gardener would stay on the property. Contrary to all horror stories, I never returned to a bad situation.

After 6 years, I decided that as a woman, I no longer wanted to deal with home and pool maintenance issues. I put the house up for sale. It was an above average price home in Perla Marina. Only 2 people looked at it. I got a phone call within about 6 weeks from someone I didn't know. They had a buyer. The house sold for what I paid for it and invested in it.

Meticulously, I looked at all condos on the North Coast. Decided where I wanted to buy. Paid more for my condo than I sold my house for. Have lived here 6 years. Bought a second, small condo. Now, I am selling the large condo to build in the mountains. I officially put the unit up for sale about a week ago. And I think I have a buyer.

This time, the economy has changed and I am selling for less than my purchase price. But I know that I can turn that money around and build something equal or better for the same money.

So, although realtors may say that nothing is moving, it is. It all depends on who you are, the energy you put into your home, your contacts, and a little bit of luck.

Really no different than anywhere else in the world.

Just my humble opinion.

Lindsey

 

[chico bill]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

Yes in DR start by offering what you think it is worth not the asking price. I have seen homes on the market here for a decade it seems that don't sell - and some are nice homes in dodgy areas - but if you have 2 rottweilers, a watchy-man, bars on all the windows and doors and a shotgun under the sheets those places could be made "marginal"

 

[chico bill]

First, welcome to DR1!

Don't know how long you've been traveling to DR, or how much time you've spent in country. The conventional wisdom on the board is generally to TAKE YOUR TIME. Odds are that reasonably-priced villa in Hispaniola will still be there next year. 

Best of luck!

And maybe the year after that along with the one next door and up the street.
The DR is expensive to live (I find) Food and electricity and vehicles and anything requiring government paperwork. On thee good side fruit can be had cheap and dentists are fairly priced. If Cable TV and electrical were reasonable and crime was not an issue it would be a great place and you would have to over bid on property but that's not the case.

 

[windeguy]

Commision generally is 5%. However some asking prices are hugely inflated. I won't even comment on what I think about real estate agents.

I have not sold anything, but I have never heard of only 5% commission here.
As others pointed out it is way more than 5%. They start and 10% and you might get them down to 8% from all that I have heard lately.

I respect everything Lindsey says, but I must say the real estate situation is nothing at all like the one where I left to move to the DR. She has been very fortunate. My 1,763 square foot house on a 40 foot X 80 foot plot of land in California sold in 2003 for $579,000 to the highest bidder. I checked and that same house today would sell for about $990,000. That is just a tad different than here in the DR over that time frame.

Everyone here is a real estate agent if they want to be. Are they worse than in the USA? Often times far worse. There is no such thing as disclosure or licensing here. Rent first and check out the area. It is the only way you will find out what it is like.

There is no MLS in the DR, so getting comps to set a value is not possible in that manner.

 

[A1exB]

Ladies and Gents, you are amazing!
When I started the thread, I could not expect so many elaborate and thoughtful responses. Thank you all for food for thoughts, am I glad I found this forum!
Lindsey, good point, in the past we had the same experience. It does not matter what the market is, it all depends on fair offering and good karma. At the times of bull market we could not sell, at bear market the deal gone fine even without agents involved. Still, it implied so much stress that since then we've been trying to play safe at any cost.
chico bill, unfortunately, no place under the sun is perfect. Being Canadian, I love my country; nevertheless, it would be the paradise with Dominican weather and less taxes, haha. Point is - no place is perfect, including DR, but that is not what we love it for, after 10+ visits.
Well, thank you all for transition from fool to smart man by letting me avoid the past mistakes. We'll start slowly from visiting Sosua, anyone renting their place near the beach? We are looking for something at the first line, June 9 to 16. Sent inquiry on Infiniti Blu website, but so far no response.

 

[A1exB]

Infiniti Blu site is rather funny. After inquiry, they send you a book link that takes to the same inquiry page . Hmm, seriously, how do they run the business?!

 

[LindseyKaufman]

Infiniti Blu site is rather funny. After inquiry, they send you a book link that takes to the same inquiry page . Hmm, seriously, how do they run the business?!

I'll let them know that something is not working. I live in Infiniti Blu.

Lindsey

 

[LTSteve]

Dear DR experts,

We are thinking of buying property in Sosua, namely Hispaniola, but, being total strangers to the area, have certain concerns. Can you comment on following questions?

1. What are the typical costs associated with ownership besides maintenance costs? Property taxes, hydro bills, maid/gardener costs, home insurance?

2. How much the area is impacted by annual hurricane seasons? Do insurers cover damages related to hurricanes?

3. Since we are not planning to live there on permanent basis, is it safe to leave property unattended? What is the crime rate pertaining to burglaries and break-ins?

4. If we are to do renos later on, how expensive is labor and materials?

5. As Canadian citizens, do we need to apply for resident cards if we are planning to extend our stay for longer than a month? What are the consequences if we stay for 2-3 months without having residence - would it cause the problem upon re-entry?

6. If we are to apply for residence cards, how hard and expensive to get that? I read some stories about rules tightened up back in 2012, so do not really want to be caught off guard.

7. In our absence, we would like to rent the property to tourists? I can see numerous properties rented out on booking and airbnb, but it does not really show overall picture of occupancy rate. From your experience, what to expect on average - 20-40-60-60+ occupancy rate?

8. Is medical service up to par in DR comparing to Canada and USA? Would it be better to buy medical insurance in Canada (currently, I pay CAD 315 for annual insurance for family of 5 that covers 35 days abroad) ? Or buying it in DR is preferable?

9. And the last but not the least. If we decide to sell the property later on, how difficult is it? Obviously, one would expect certain degree of liquidity. If we end up paying for villa with land around USD 300k, would it be reasonable to expect to return your money at least upon sale? And how long does it typically takes?

Your feedback is greatly appreciated.

Alex.

Let me say this as clearly as possible, DO NOT BUY PROPERTY IN SOSUA. Your situation is not unique but if you are planning on only being in the country from 1-3 months RENT. First of all, owning property in a foreign country requires a long learning curve. You don't sound like you really have any idea how things work in the DR. If you are looking at buying a free standing home with property and then have to rely on others for security you are starting off behind the eight ball. Locals knowing that you are not there the majority of time will consider this an invitation to rip you off. I can't say it any plainer. The cost of purchasing the property, DR tax on the purchase, the cost of an attorney, the monthly homeowner fees, paying for upkeep will leave you scratching your head as to why you would want to buy vs rent for the 1-3 months you visit the DR and can simply walk away. If after all this you still want to buy take a couple of years to travel to the DR for 1-3 months rent property and really look at the housing market. DO NOT rush into this. In addition Sosua is not an area where if you want to sell the property at a later date you will make any money on your investment. You may be able to buy property at a reasonable price in the Sosua area but selling it will be difficult and a process that could take years. Yes if you want to own property in the DR you will need to apply for residency. This process starts in Canada. You will need to get documents together and brought to the closest DR consulate. They will approve thes and then you bring them to the DR, hire an attorney to walk these documents through the process. The cost of this is not cheap. It will probably cost you $2000usd per person to get your first temporary residency. Good luck with your pursuit.

 

[drstock]

Let me say this as clearly as possible, DO NOT BUY PROPERTY IN SOSUA. Your situation is not unique but if you are planning on only being in the country from 1-3 months RENT. First of all, owning property in a foreign country requires a long learning curve. You don't sound like you really have any idea how things work in the DR. If you are looking at buying a free standing home with property and then have to rely on others for security you are starting off behind the eight ball. Locals knowing that you are not there the majority of time will consider this an invitation to rip you off. I can't say it any plainer. The cost of purchasing the property, DR tax on the purchase, the cost of an attorney, the monthly homeowner fees, paying for upkeep will leave you scratching your head as to why you would want to buy vs rent for the 1-3 months you visit the DR and can simply walk away. If after all this you still want to buy take a couple of years to travel to the DR for 1-3 months rent property and really look at the housing market. DO NOT rush into this. In addition Sosua is not an area where if you want to sell the property at a later date you will make any money on your investment. You may be able to buy property at a reasonable price in the Sosua area but selling it will be difficult and a process that could take years. Yes if you want to own property in the DR you will need to apply for residency. This process starts in Canada. You will need to get documents together and brought to the closest DR consulate. They will approve thes and then you bring them to the DR, hire an attorney to walk these documents through the process. The cost of this is not cheap. It will probably cost you $2000usd per person to get your first temporary residency. Good luck with your pursuit.

I'm sure this post will be very popular with members here trying to sell property in Sosua! And may I politely add that contrary to what you say you DON'T have to apply for Residency to own property here, unless there has been a big change recently. I bought mine long before I had Residency.

 

[A1exB]

I'm sure this post will be very popular with members here trying to sell property in Sosua! And may I politely add that contrary to what you say you DON'T have to apply for Residency to own property here, unless there has been a big change recently. I bought mine long before I had Residency.

I guess the truth is, as always, in the middle. Based on what was said so far, the ownership might be questionable for occasional visitors to DR; if you do live there for most of the time and do long horizon planning, then idea of ownership is always attractive.

 

[lifeisgreat]

Alex..you will always get both sides of coin on this forum far left and out to lunch sky is falling with tin foil hats market crashed 8 yrs ago and slow recovery.. most properties you see on net are old listings get a good real estate agent and good lawyer and you will be fine...as in anywhere in world location location location....there is a couple of good agents in Sousa who are busy rest are wanna be agents...as any place buyer beware... goodluck

 

[joe]

Good real estate agent in Sosua? HA..HA

 

[retiree]

We have had good experiences with several real estate agents in Sosua. Both buying and selling.

 

[Uzin]

There are a lot of factors of course, but as far as I can say it is not worth buying for a few months stay, rent - this is really not a place with huge investment potential or ripe for great development and progress etc.

Now be residing longer, that is another story...

 

[retiree]

I agree not to purchase for investment. The market is too uncertain. But why not if you enjoy having your own place and you know you will be happy here. We have owned a place here since 2000.

 

[chico bill]

I agree not to purchase for investment. The market is too uncertain. But why not if you enjoy having your own place and you know you will be happy here. We have owned a place here since 2000.

True. I came across a place for $80 K in 2001 that I wished I bought (an Italian man bought itbefore I pulled the trigger) and now it would be much more. But I also saw places for $160K to $250K that are even less today.
I think location is the key, pick it very carefully, as it only takes one burglary to sour you on how you feel about your home here (I have had one home invasion, while we were away). Since you have to live somewhere and this is where you want to be then think of your home as your refuge/garden, etc. But so true Retiree property in the DR is not "investment grade" as it is in some 1st world locales, unless you have a very long time horizon. But that could be said of some dying cities in North America too.