Think of this as your Rosetta Stone for the local real estate market. These are the terms you will encounter from your first inquiry to the final closing.
Certificate of Title (Certificado de Título)
This is the single most important document in any transaction. It is the official, government-issued proof of ownership for a property, confirming who the legal owner is and that the property is free of liens or legal claims. Your entire goal as a buyer is to have a clean Certificate of Title transferred into your name.
Promise of Sale (Promesa de Venta)
This is the first legally binding contract you will sign after your offer is accepted. It’s far more detailed than a simple offer sheet. It outlines all the terms of the transaction: the final price, payment schedule, closing date, and any contingencies. This document must be drafted by a qualified lawyer.
Due Diligence (Debida Diligencia)
This is the critical investigation phase that your lawyer conducts after the Promise of Sale is signed. They will verify the legal status of the property, confirm the seller is the rightful owner, check for any debts or mortgages against the title, and ensure all permits are in order. This is your ultimate safety net.
Confotur Law (Ley de Confotur)
This is a game-changing piece of legislation for buyers of properties in designated tourist zones like Punta Cana. If a property is covered by Confotur, the first owner is exempt from the 3% property transfer tax and the 1% annual property tax (IPI) for up to 15 years. Understanding if a property qualifies is a crucial part of analyzing its investment potential.
Down Payment & Escrow
The Down Payment is the initial portion of the purchase price you pay to secure the property, typically upon signing the Promise of Sale. These funds are not paid directly to the seller. Instead, they are held in Escrow by a reputable third-party company. The escrow service protects your funds, only releasing them to the seller once all conditions of the contract are met at closing.
Closing Costs (Gastos de Cierre)
These are the fees associated with finalizing the purchase. In the Dominican Republic, this primarily includes the 3% Property Transfer Tax (if not exempt under Confotur), notary fees, and legal fees for your attorney. It’s crucial to budget for these costs, which are in addition to the property’s purchase price.
Mortgage & Financing
While many international transactions are cash-based, local banks do offer Mortgages to qualified foreign buyers. The process can be more document-intensive than in your home country. It’s wise to get Pre-Approval from a local bank early in your search to understand your budget and strengthen your negotiating position.
Notary Public (Notario Público)
In the Dominican Republic, a Notary Public is a licensed lawyer who acts as an official agent of the state. Their role is to authenticate legal documents, including the final Act of Sale, ensuring they are executed correctly according to the law. This provides an official, legally binding status to the transaction. During this process, it is vital to get assistance with Dominican Republic law from your own independent attorney to ensure your specific interests are protected.
Frequently Asked Questions (FAQs)
Q: Is it difficult for a foreigner to get a mortgage in Punta Cana?
A: It is not difficult, but it requires more documentation than a local might provide. Banks will typically require proof of income, credit history from your home country, and other financial statements. Starting the conversation with a local bank early is highly recommended.
Q: What is the most important term I need to understand?
A: While all are important, the “Certificate of Title” is paramount. A clean title is the ultimate proof of a safe and secure investment. Your lawyer’s primary due diligence goal is to verify its integrity.
Q: Can I sign the “Promise of Sale” without a lawyer?
A: It is strongly advised against. The Promise of Sale is a binding legal contract. You should never sign it without having it drafted or thoroughly reviewed by your own independent attorney who is representing your interests exclusively.
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Speak the Language of Success
By understanding this essential home buying terminology in Punta Cana, you are no longer just an observer; you are an active, knowledgeable participant in your own success story. You can ask the right questions, understand the answers, and move forward with the confidence that comes from clarity.
At realtor.international, our agents are fluent in the language of the market and are here to translate it for you every step of the way. Contact us today to start the conversation.
