How to deal on property

Thank you for asking this.  I will be following this thread.  I also have come across the same situation and I've been told that PR doesn't really keep a MLS and if you really are interested in a property you can have an appraisal done.  I hope that is not the case!!!  That sounds expensive and a waste of time and money.  I'm interested in hearing what the group has to say.

You can try setting up an account on the following site:

www.tasamax.com

It's in Spanish however your browser should allow you to translate.  This site takes into account financed transactions and in some cases even includes a copy of the appraisal that was done on the comparable sales you are searching.

This site does not take into account cash sales that may have been done and although the MLS does exist in PR many agents don't utilize it so finding records of everything that went into a sale is difficult.

Many times sellers will list a property based on realtor opinion or off of an older appraisal they may have had done or word of mouth from a friend or neighbor.  In most cases price is always negotiable so my advice would be always to offer what you are willing to pay and see how comfortable the seller is with negotiating with you.

If you find a place you truly love and are paying cash you can always have your own appraisal done if you get deep into negotiations and if you are financing the bank determines the value any way and most sellers are willing to negotiate in some capacity with a bank's appraisal on value if there are issues.

I came across this site the other day. Has places you can buy or rent w option to buy. Seems to be run by Banco Popular so my guess is foreclosed properties.

Www.deshow.com

Thank you, Larry!  Very useful!

annabfalter wrote:

We are again looking at properties in the southwest.  Many of them seem to be way overpriced based on location and condition.  Is there any way to look up sales information on comparable properties that have recently sold?

I don't want to offend anyone by offering too little, but then again, most of these places require a whole lot of work.

Also, when the owners list their property, do they expect to come down or is the price generally firm?

I would definitely appreciate any feedback you might have!

Ann

Yeah, the real estate market is just the Wild West.  I guess that, along with almost everything else in Puerto Rico, you just try and roll with it, I honestly don't know that there's a single, simple answer to your question Ann.  Here's a very brief account of my experience trying to buy four separate properties over the past few years:

Property #1 -- unimproved (raw) land in Parguera.  6 cuerdas.  Lousy access, an easement to the east of the property resulting in a 20-minute drive to Parguera.  An easement to the west would have made it a 2-minute drive.  Asking price was $500,000.  Lot had been on the market for years.  Offered $200,000, noting all of the problems with building on the lot.  Seller countered with asking price.  End of negotiations.  Property is now off the market, never sold.

Property #2 -- 38 cuerdas with 3200sq ft 5 bed, 3.5 bath house, RIGHT NEXT TO PROPERTY #1.  Asking price, $600,000!  Concrete house had been abandoned for 15 years but still in good shape, structurally sound.  Needed some work, perhaps $50,000 in repairs.  Tried to put together financing for offer at asking price but loan fell through.  Seller was willing to do owner financing, so I put together an offer that way, but by that time the property was under contract.  A week later, lender decided they could do the loan after all.  GRRRR!

Property #3 -- 18 cuerdas unimproved, one hill west from Property #2.  Asking price $150,000.  Made cash offer at asking price.  Seller included a host of ridiculous and unenforceable restrictions.  I countered with reasonable stipulations which were rejected.  Property was taken off the market.

Property #4 -- 20 cuerdas unimproved in Cabo Rojo.  Foreclosed property.  Last offer to the bank (another cash offer) was made October, 2016.  Still waiting for their response (turns out there are title issues with the property which so far have taken nearly 18 months to resolve).

Clearly you will encounter all sorts of properties at all kinds of prices, and with sellers with very different motivations.  Here's my favorite property in Puerto Rico, an unimproved lot that looks to be suitable only for growing spaghetti.  But because it's "waterfront" the owner has an outrageously inflated sense of the market price.  It's been on the market, at current price, for years.

Regarding the question of whether the property is fairly priced, let me suggest that you consider the price per square meter for the land (this varies by region) and the price per square foot for the building.  In my area here in Virginia, most houses run about $100/square foot to replace.  In Puerto Rico, they're about $80/square foot.

to look for listings try these;

Home listings:
*         ClassificadosOnline
*         ClasificadosPR
*         BuyorRentPR.com
*         CompraoAlquila.com
*         CraigslistPR
*         Sublet.com
*         zillow.com

Also try these;
Property listing by Banco Popular (make offer, listed is way over value) https://www.deshow.com

1FristBank repo houses http://www.1firstbank.com/pr/en/retail- … properties

HUD Homes (Bid on homes)  - https://www.hudhomestore.com/Listing/Pr … ge=ENGLISH

Larry and Warner,
Quick question, in PR when somebody says a house is ..... Lets say 2,000 square feet, does that include the space for the car port / garage, balcony, back porch, etc or just the house living space foot print?

A great question Rey, and one I can't answer.  As I'm sure you know, on the mainland, it's only living space.

Rey,

How overpriced in your opinion are the listings from the deshow site. 10 or 20 percent?

I would say it depends on who you ask. By the book it should be living space here as well but it depends on who's book you go by.  There really is no rhyme or reason on how  to accurately assess value here and until the MLS is accurately used (or mandated with enforcement ) for cash transactions,  I don't feel their will ever real be a way to determine value...

In this market the motivation of the seller is truly what dictates price and I think the examples shared by WarnerW support this.   

In PR on the lending side we typically work with both the seller and the buyer on purchase transactions and the conversation of value is always a difficult one especially if the seller is a person and not the bank. Bank owned properties for sure can be heavily negotiated in many cases I've seen the banks (especially deShow) accept under 50% of the asking price....whereas  say someone who built the property with their own funds from scratch and knows every penny spent will wait it out until they get their price....regardless off "market value"

Drew64 wrote:

Rey,

How overpriced in your opinion are the listings from the deshow site. 10 or 20 percent?

I have to see a particular example, the location and description, but I think a lot. I say that because a house that in good shape could cost 500k and the bank gets it with 1 year to go in the mortgage, to me has a value of what is left in the mortgage plus a tiny amount of profit for the bank, not list price like BP likes to list them.

Make them an offer 20-50% the asking they are repo.

My plan is to build my place and then go after repo condos for 70-80k, fix them up, add nice looking but inexpensive furniture and rent them via AirBnB for an easy 30k-40k a year before taxes, make sure association does not have rules against short term rentals. Place gets payoff in just a few years and from there on it is just profits.

1-2 short term rental units would be perfect, enough that the wife an I can do the work, more than that would need to hire people and that could mean unreliable service.

Wow!  I was exhausted just reading that.  We had a deal last year, got down there to close and found out there were all kinds of title issues.  It underscores the importance of finding a good lawyer.

We are looking again this year and so far unimpressed.  We made an offer on a small condo in Parguera with no view and very obvious ceiling issues.  The offer was rejected, the owner saying that she had a loan to pay off.  We looked at two other properties and were told that the asking price was firm.  Maybe the strategy is to only look at properties that are price at what we want to pay?

Sigh

annabfalter wrote:

Wow!  I was exhausted just reading that.  We had a deal last year, got down there to close and found out there were all kinds of title issues.  It underscores the importance of finding a good lawyer.

We are looking again this year and so far unimpressed.  We made an offer on a small condo in Parguera with no view and very obvious ceiling issues.  The offer was rejected, the owner saying that she had a loan to pay off.  We looked at two other properties and were told that the asking price was firm.  Maybe the strategy is to only look at properties that are price at what we want to pay?

Sigh

La Parguera is a high value area, most likely you can negotiate a 5-15% lower than asking price. Away from tourists areas prices will be better to negotiate. Beach and costal places will go for prime prices unless you look at non- tourist places. Also, you can always go to the town CRIM office and ask if the property you're looking at have any issues with taxes or bank leans. If you're buying directly from the owner, ask for the CRIM certificate, it will show who owns the property and if it is free of any issues like back taxes.

Good luck on your search!

Like others have mentioned including Larry comp prices are a little hard to come by.
There are still lots of cash transactions taking place where people just need to unload property quickly.
  Myself and several of my friends all purchased properties for cash that were never listed but our local friends knew people looking to sell.

Finding good lawyers and real estate agents can be challenging if you do not know someone on the island that can provide a referral.

Definitely find a reputable lawyer to represent you and help review the deed etc .

Unfortunately Hurricane Maria has only excacerbated the issues on the island further despressing the real estate market, but the upside is prices are even cheaper.

Elcalipocho wrote:

Like others have mentioned including Larry comp prices are a little hard to come by.
There are still lots of cash transactions taking place where people just need to unload property quickly.
  Myself and several of my friends all purchased properties for cash that were never listed but our local friends knew people looking to sell.

Finding good lawyers and real estate agents can be challenging if you do not know someone on the island that can provide a referral.

Definitely find a reputable lawyer to represent you and help review the deed etc .

Unfortunately Hurricane Maria has only excacerbated the issues on the island further despressing the real estate market, but the upside is prices are even cheaper.

Yes but people even after all of that, think their homes are encrusted with diamonds and should sell for top dollar. Then they end up not selling the property for many years until they lower the price or a fool comes by.

Yes, prices seem rather high to me.  We are currently considering a small 2 bedroom house with a large fenced yard in the country.  There is a very nice large new house next door on one side and a dilapidated mess on the other. The house very nice, but is constructed of wood, which means it cannot be financed or insured.  The owner wants $100k.  It's a nice place, but in the current market I'm not sure if it's a good deal or a terrible deal.  I've seen houses for sale  in the pueblo of Guanica that are priced around $75k to $100 that haven't moved in the last three years.  Very confusing.

A Wooden house after a hurricane may have a negative value (clean up the pieces).

A 3 bedroom home made of wood should go for 50k or less unless it has a huge lot. Many PR concrete houses are going for 70-100k, so paying for wood may not be a good investment.

Better have it inspected for termites

Sitka wrote:

Better have it inspected for termites

Need check the concrete houses for termites also.

annabfalter wrote:

Yes, prices seem rather high to me.  We are currently considering a small 2 bedroom house with a large fenced yard in the country.  There is a very nice large new house next door on one side and a dilapidated mess on the other. The house very nice, but is constructed of wood, which means it cannot be financed or insured.  The owner wants $100k.  It's a nice place, but in the current market I'm not sure if it's a good deal or a terrible deal.  I've seen houses for sale  in the pueblo of Guanica that are priced around $75k to $100 that haven't moved in the last three years.  Very confusing.

Ann, market price is nothing more than what a buyer is willing to pay.  As Rey pointed out, many sellers seem to have inflated ideas of the market price, which is not necessarily what they happen to think the "house is worth".  I really love his observation that they seem to believe that their houses are "encrusted with diamonds".  Too true!

It's impossible to give you specific advice on the house you mention above, as there are a host of factors that contribute to a home's market value, but the ultimate question is , "what is it worth to you?"  What would you pay to live there?  Never mind what anyone else would pay.  For me and my wife, the factors most important to us are the things that simply can't be changed, namely the location.  Nice views?  All the land we want?  Quiet?  Access to beach?  Mountains?  Rivers?  Shopping?  (whatever you happen to be looking for).  If the property doesn't give us those things, our best offer declines.  If it does have the location we want, then the other things come into play.  Is the house in the condition that I would want (both structurally and design).  If not, what would it cost to repair/remodel?  These costs drive down our best offer as well.

I guess lastly, what's your time frame?  Buyers in a hurry are more likely to jump at an opportunity.  If you've got time, there's no harm in making an offer below list.  Worst they can do is refuse.  At that point, move on and keep looking.  The market is robust, and the prices are dropping, at least for those houses without the diamonds  ;-)

Good luck, happy hunting, and keep smiling!

There is nothing like boots on the ground and taking the time to find the right house or build your own at your favorite location. Being in a rush works against you. Come, rent for 6 months to a year while you find the right house at a price that you are willing to pay or build your own.

Building is more expensive since you have to buy the land, get all the permits and build to the latest build code, but ..... You would end up with a well build house, resistant to earthquakes, resistant to the storms, one that looks like you like and has the features you like, (as far as your budget allows).

Here is a link that is interesting and helpful

‪14 Things We Learned Buying a Home in Puerto Rico https://lnkd.in/dSWzdbG‬

annabfalter wrote:

Is there any way to look up sales information on comparable properties that have recently sold?

If you go to Zillow, if you deselect "for sale" and "for rent" and other categories and select only "recently sold" you will get what is supposed to see only what has sold and the sales price.  The right panel gives a thumbnail view of the sold properties beginning with the most recent sale.

https://www.zillow.com/homes/recently_s … rect/7_zm/

Of note, according to Zillow, there are 2800 properties for sale in PR.  There have been only 46 properties sold so far in 2018. 

Realtor.com (limited listing of properties for sale) says there are approximately 900 properties for sale:

Area              For Sale     Median Listing Price
Bayamon       153                 $90,000
Caguas             138              $128,000
Carolina          150          $113,000
Guaynabo      144          $245,000
San Juan        315          $129,000

It also states that the average list price is $89 /sq.ft.
https://www.realtor.com/local/Puerto-Rico

I will not relay on Zollow, in the island, most transactions are done in cash or without realtors intervention. Most sales takes a long time to be properly register in the CRIM office and real sale price is most times not recorded. Unless you are buying a house in a major subdivision(urbanización) or in a major city, most prices are set by the sellers idea of how much their place is worthed. You can visit the same neighborhood and see 2 similar houses and the price will vary significantly from one to another based on the owners perspective. Houses listed by a realtor, will already be inflated to offset the realtors cost. Houses listed by the owners will have more negotiation room. Also, sellers will be willing to negotiate more if it's a cash transaction. There still a lot of folks that don't trust the banks. Plus, banks require more requirements and takes longer than cash transaction.

If I have one suggestion to folks looking into relocating and purchasing property in the island is to stop thinking that we are in the mainland. Things are done different than in the mainland in PR, that's the way it is. As Rey and others folks here have expressed several times, nothing beats been there in person. Most islanders will ignore any offers from someone that is not even in the island. Technology is a great thing, but you cannot really on it always. Spend time in the island, look at different locations, talk to people, you may realize that that beautiful house in the Internet is not as good as it looks on the computer. And get real, that beautiful view of the ocean, that nice modern house, it's going to cost you. It may not be as expensive than in most states but it will not be cheap. Specially in a tourist area.
Comparing SJ, Bayamon, Ponce is not the same as Lajas, Adjuntas. That $300K in Las Palmas may be $100K worth in Yauco, for example. There are places in the island called “gringo land” and prices reflect that. Think about this, PR is 35 x 100 miles, you are within an hour to a beach from any point of the island. Isn't the point of moving away of the mainland to be able to live with less?

Well, we might have a casa!  Our offer has been accepted, so we will see.  I'm not getting too excited because of the fun and games we went through last year.  Fingers crossed and hoping for the best!

annabfalter wrote:

Well, we might have a casa!  Our offer has been accepted, so we will see.  I'm not getting too excited because of the fun and games we went through last year.  Fingers crossed and hoping for the best!

Good news

Congratulations!!! Very exciting!!!

Positive thoughts! Congrats!!

@WarnerW  Yes, because we would rather sit on a property than to sell to Gringos.  A lot of folks from the States see Puerto Rico as gold mine to bid the lowest possible and rake in as much as possible with contributing very little to the local economy.  The local community is already very aware of the continued invasion and exploitation and are taking advantage of those very real estate laws that Mainlanders come over and misuse.  If you don't want to pay asking price, stay where ever you are. 

@Sage Miranda I'm sure the people in Haiti/DR would LOVE 'gringos' stimulating their economies.. no matter how big or small. The grass isn't always greener and it seems you are a bit jaded for whatever reason.

@Sage Miranda stereotyping, derogatory words and hateful tones do nothing good for your heart and mind or anyone else. It only fans the flames of hate and divisiveness that already exists in the world. Feel how you want to feel, but maybe you can reevaluate the messages that you put out in the world. Ask yourself, "is what I'm saying helpful? Is what I'm saying inspiring? Is what I'm saying necessary? Is what I'm saying kind?

Wow, xenophobia/scapegoating much? Would you tell boricuas they should pay asking or not buy?

yes there are expats that have no interest in helping PR but there are many more who do contribute and want to help. But, I suspect your confirmation bias prevents you from seeing that, just like other racists and bigots only see the negative in the group they demonize. That's a great way to go through life angry, miserable and flat out wrong.