Dorado Beach & Puerto Rico’s Buyer’s Guide

Before you start searching for a new home, make sure you know your budget for a new property. In the event you would like to seek financing, keep in mind the following:

• PR has several traditional banks such as Banco Popular, First Bank and Oriental which offer the most competitive rates. The downside is that due to COVID there is a huge backlog on financing which can result in 60 plus days of process.
• Most Sellers in our Dorado Beach market will not accept offers subject to financing. Typical purchase contracts are 30-45 days, making it very tight to secure financing from a traditional lender. Buyer diligence, and pre-qualification is key to succeed with traditional lending.
• New financing options have become available such as LendUS, Cross Country Mortgage etc. They offer slightly higher rates, but quicker turnaround times, other alternative forms of financing. 

Cash is always king and has become the norm in this Dorado Beach market. Many Buyers offer a cash purchase, with the ability to finance (but without being subject to financing). 

Even if you are a seasoned Real Estate Buyer, you might find that the process of purchasing in Puerto Rico is very different. Below some of the major differences from the mainland practices and our recommendations:

• Dual Agency: In PR it's very common that Brokers represent both the Seller and the Buyer. Be aware that the moment you call a listing agent directly, they might assume that you are becoming their client. Having a Broker that strictly represents the Buyer, guarantees the best advocacy and negotiation for them.
• PR MLS: Just a couple of years ago, most local Brokers were not using any MLS. Luckily, now the use has become more widespread, but still a great majority of listings don't make it online. Additionally, many don't update the listings when they have sold and for how much, making it difficult to know the comps. A Broker with deep connections within the community and other Brokers is key to see everything.
  
• Comparables and Price Per Square Foot: Unfortunately, good data is hard to come by. If you are buying a re-sale or an older home, in many cases the Seller (or it's Broker) does not know what is the interior square feet vs gross, thus it's very hard to compare price per square foot of two properties. Additionally, the best way to know what has sold is through visiting the Property Registry. Beware, online might say interior but its possible that the number you are seeing is gross square feet. A good Broker shall be able to provide data of comps from the Property Registry and give you the general picture of what is the fair pricing.
  
• Sellers Brokers and Buyers Representatives:
  • Multiple listing Brokers: Sellers could have multiple Brokers showing the same property.
  • The term "Buyer's Representative" in Puerto Rico is not the norm and they are just considered as the Buyer's Broker. In the mainland these are usually compensated with a house hunting fee (regardless of a purchase happening or not). In Puerto Rico, when a Buyer is represented by a Broker in a negotiation for a property that has another listing Broker, the two Brokers co-broke and split the commission fee established by Seller.
  • Minimum Commission: Beware of Real Estate companies that only show properties that promise a certain minimum commission %.

You've done your homework and are ready to make an offer for a property in Dorado Beach. Here is what you should know.

• Offers might be a little less formal than what you are used to. These can be submitted via email, as an attachment or in the same email. They don't require signatures. Letters of Intent are not typical but starting to gain popularity with more complicated deals.
• Proof Of Funds: Be ready to present a POF. These are required for some showings, for some offers and sometimes within days of executing an agreement.
  
• Legal counsel: Make sure you have a lawyer in standby to review any agreements if your offer is accepted. 
• Typical terms of an offer in this market:
  • Price. Cash.
  • "As Is" with an inspection contingency for major structural issues.
  • Contract Term: usually somewhere within 15-45 days. (30 is becoming the norm).
  • What items are included? Furniture, artwork, golf carts?
  • Who pays for what at closing and who chooses the Notary.
  • Deposit: typically 3%-10% of the sales price.