Dominican Real Estate Closing Costs
Are the Dominican real estate closing costs going to stop me from buying my Caribbean dream home?
The process of buying real estate in the Dominican Republic is very similar to the way we purchase a home in the United States. The first thing you have to do is find an honest and ethical real estate agent to work with. Real estate agents are not licensed in the Dominican Republic so any one can call themselves an expert. It’s also important to understand there are no organizations like the National Association of Realtors to protect us from unethical and fraudulent practice.
Once you find the perfect home you’ll want to start the buying process by having the agent write an offer. The buying process is a topic for another day and maybe we will get some replies on this post from local brokers about how they can help you with a smooth purchase and property transition.
The topic today is Dominican real estate closing costs. Are there any Attorney’s in the Dominican Republic? The answer is yes and there are some really good ones as well. My Dominican Attorney, Guido Perdomo is very well educated and knowledgeable about Dominican real estate law. One of the first things the attorney will want from you and your broker is a copy of the Certificate of Title from the seller in order for your Attorney to begin the title investigation.
As for fees, most Attorneys have a pretty standard fixed fee for real estate purchases ranging from 0.1% to 1.0% of the gross purchase price, depending on the value of the transaction. The typical Attorney’s fee for real estate purchases below $500,000 is usually around 1%. There may be a minimum fee charged by the Attorney for smaller valued properties.
The fixed fee charged by the Attorney should cover:
- Title investigation
- Due diligence
- Negotiation, preparation, authentication and recording of the deed of sale
- Short-term escrow services
- Obtaining from the Internal Revenue Department an appraisal of the property purchased in order to ascertain the amount of transfer taxes to be paid
- Payment of taxes
- Recording of the deed of sale at the Registry of Titles
- Obtaining the Certificate of Title in the name of the buyer.
Not included in the fixed fee are transfer taxes (approx. 4.4% to 6.4% of appraised value), surveyor’s fees ($150+ depending on the size of the property) fees and expenses related to the representation of the client by power of attorney in case the client will not be present at closing ($250). Also, there is a cost of forming a Dominican corporation if you choose not to hold title in your own name.
The above Attorney fees and breakdown of closing costs was sent to me in an email back in 2007 from Mr. Fabio J. Guzman. Attorney Guzman is highly regarded and one of the most prominent lawyers in the Dominican Republic.
I believe that the Dominican real estate closing costs are still pretty consistent to Mr. Guzman’s 2007 estimates. If any of you local experts have different closing estimates please let all of us know! I think this should answer many of your concerns about at least one aspect of the buying process and procedure to own Sosua real estate.
If you have any legal real estate questions for Attorney Fabio Guzman you can send him an email at Fabio@DRLawyer.com or visit his website, www.DRLawyer.com.
If you local Dominican real estate professionals have anything to add or want to pitch your services here is your opportunity! Just respond in the comment box below and you will be heard!
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