How to Make an Offer on Dominican Republic Property: Reservation Agreements Explained

How to Make an Offer on Dominican Republic Property: Reservation Agreements Explained

You've toured the villa in Cap Cana, the beachfront condo in Las Terrenas, or the colonial townhouse in Santo Domingo, and you're ready to move. What comes next in the Dominican Republic isn't the same as making an offer back home. There's no MLS-driven bidding culture, contracts are in Spanish, and the first document you'll sign — the reservation agreement — locks you into terms and money before your lawyer has finished due diligence.

This guide walks you through making an offer on Dominican Republic property: how offers are actually communicated, what a reservation agreement (sometimes called an oferta de compra or acuerdo de reserva) does, what a fair deposit looks like, and the pitfalls that trap foreign buyers.

Step 1: Understand How Offers Work in the DR

In the Dominican Republic, verbal offers carry almost no weight. Sellers and developers expect a written offer accompanied by a refundable or partially refundable deposit before they'll take a property off the market. There are two typical routes:

• Resale properties (villas, condos, land) — you submit a written offer through the listing agent or directly to the seller's representative. If accepted, it converts into a short reservation agreement.
• Pre-construction and developer sales — the developer usually hands you their standard reservation form. Terms are less negotiable, but you can still push on price, payment schedule, and included finishes.

Unlike the US, agents in the DR are not universally licensed the way Realtors are, and dual agency is common. The agent showing you the property may also represent the seller. Assume so, and hire your own independent Dominican attorney (abogado) before signing anything — not the seller's, not the developer's, not one the agent "recommends."

Step 2: What a Reservation Agreement Actually Does

A reservation agreement is a short contract — typically two to five pages — that pulls the property off the market for a defined window (commonly 15 to 45 days) while your lawyer performs due diligence and both sides prepare the Promise of Sale (Contrato de Promesa de Venta or Compraventa).

A well-drafted reservation agreement should identify:

• The property, ideally with its Certificado de Título number and designación catastral (cadastral ID).
• The parties, with cédula or passport numbers.
• The agreed purchase price and the currency (USD vs DOP matters — lock this).
• The reservation deposit amount and where it is held.
• The reservation period (how long the property is off-market).
• Conditions precedent — what has to be true for the deal to advance (clean title, no liens, valid permits, HOA in good standing, etc.).
• Refund conditions — under what circumstances your deposit comes back.
• A deadline for signing the Promise of Sale and the down payment due at that stage.

If any of those elements are missing or vague, do not sign. This is the moment your leverage is highest.

Step 3: How Much to Put Down

There is no legally fixed reservation deposit in the DR. Market practice is roughly:

• Resale homes: often US$5,000–$10,000, or about 1% of the purchase price for higher-value properties.
• Pre-construction units: frequently a fixed reservation fee (a few thousand dollars) that is then credited toward a larger 10–30% down payment when the Promise of Sale is signed.

Two rules protect you:

1. Keep the reservation deposit modest. The bigger money — typically 10% of the price — should go down only at the Promise of Sale, after due diligence, not at reservation.
2. Insist the deposit is escrowed, ideally with your attorney's cuenta de terceros (client trust account) or a neutral escrow agent — not in the seller's personal account and not with the listing agent. Wiring funds directly to a seller before due diligence is the single most common way foreign buyers lose money here.

Step 4: Making the Offer Refundable (or Not)

This is negotiated, and it matters. Dominican reservation agreements come in three flavors:

• Fully refundable if due diligence uncovers title, permit, tax, or HOA problems — this is the standard you should push for, and it is achievable on most resales.
• Refundable only for specific defects — narrower, more common in hot markets and with developers.
• Non-refundable / "earnest money" — you lose the deposit if you walk without cause. Sometimes justified for pre-construction where the developer is holding a unit, but the trigger events should still be spelled out.

Ask your attorney to add a due-diligence contingency that lets you exit and recover the deposit if the Certificado de Título isn't clean, if the property isn't properly deslindado (individually surveyed and titled under Law 108-05), if there are undisclosed liens or unpaid IPI, or if the seller can't produce the documents listed in the agreement within a set number of days.

Step 5: What Your Lawyer Should Verify Before the Deposit Clears

Even at the reservation stage, a competent abogado will start:

• Pulling the Certificado de Título from the Registro de Títulos under the Jurisdicción Inmobiliaria (Law 108-05) to confirm the seller actually owns it and to check for mortgages, liens, or oposiciones.
• Confirming that IPI (annual property tax) is current with DGII — unpaid IPI travels with the property.
• Checking the deslinde status. Undeslindado properties (still under the older Constancia Anotada system) are riskier and slower to close.
• Verifying HOA / condominio fees are current, and that the reglamento de condominio actually exists and is registered.
• If pre-construction: checking the developer's corporate standing, construction permits, environmental license (Medio Ambiente), and — if applicable — the CONFOTUR resolution granted under Law 158-01.

Some of this happens after reservation, during the Promise of Sale window. But the reservation agreement should give your lawyer the right and time to do it.

Step 6: Currency, Wire Transfers, and Source of Funds

Most DR real estate is priced and paid in US dollars. When you wire your deposit:

• Send from an account in your own name. Third-party wires create compliance headaches and can trigger source-of-funds reviews under Dominican AML rules.
• Keep documentation showing where the money came from — banks and, later, the notary may ask.
• Confirm bank details by voice with your attorney before wiring. Wire fraud via spoofed emails is a real and recurring problem in DR closings.

Common Pitfalls to Avoid

• Signing the seller's or developer's boilerplate without your own lawyer's redlines.
• Paying the deposit to an agent's personal account — never do this.
• Skipping the deslinde check on rural or older properties.
• Assuming CONFOTUR benefits transfer automatically on resale — the transfer-tax exemption is generally used up by the first buyer; confirm with your attorney what actually survives.
• Believing coastal-ownership myths. Foreigners can own property in the DR on equal footing with Dominicans under Articles 25 and 221 of the Constitution; there is no 50 or 60 km Haiti-border restriction requiring presidential approval. The only real coastal limit is the 60-meter maritime zone (Law 305 of 1968), which is public land for everyone.
• Forgetting the 3% transfer tax (ITI) — paid by the buyer to DGII on the higher of the contract price or DGII's own appraisal. Budget for it now, not at closing.

Short FAQ

Do I have to be in the DR to sign a reservation agreement? No. You can sign electronically or via a Power of Attorney (*Poder*) given to your Dominican lawyer, properly notarized and apostilled from your home country.

Can I make the offer in the name of a company? Yes — many buyers use a Dominican SRL for liability and estate planning. Decide before reservation; changing the buyer name later can complicate the Promise of Sale.

What if the seller gets a higher offer during my reservation window? That's exactly what the agreement prevents. Enforce it. A properly drafted reservation with a deposit obligates the seller to hold the property for you.

Is the reservation agreement the closing? No. Closing happens after the Promise of Sale, once the final Contrato de Venta is signed before a notary and filed at the Registro de Títulos, and the new Certificado de Título is issued in your name.

A final honest note: Dominican real estate laws, taxes, and administrative practices change, and figures like IPI thresholds, transfer-tax appraisal methods, and CONFOTUR rules are updated periodically. Confirm anything that touches money or title with DGII, the Jurisdicción Inmobiliaria, CONFOTUR/MITUR, and an independent licensed Dominican attorney before you sign or wire.