Can anyone explain options on island property?

Please understand, I am not seeking legal advice. Just trying to sort out what the common (or not so common) R.E. practices/listings there are on la isla. If you're a broker or abragado, fine. I won't hold you to your opinion.
Just trying to understand what the standards are for the time at hand.

IMO there is no “standard “ practice for RE transactions.  If the seller has an agent, you will need to work with him/her.  If the seller is not represented you can strike a deal with the seller and have your lawyer review it and do a title search to insure you get a clean clear title to the property and have it properly recorded.
Don't forget to request the tax waiver for your new home.   

There are a few folks in the profession that are members of the forum.  Perhaps they can help.

My experience is that Sitka is correct, that the deal struck can be idiosyncratic.  If you can imagine it, it can be included in the contract.  However, most contracts are pretty reasonable.  My outstanding offer includes an offer of a deposit (aka "earnest money") which is forfeit if I fail to close.  However there are a few no-fault contingencies that let me recover my entire deposit.

Though we never got to the point of a formal offer, I did encounter a seller that demanded all sorts of things -- property could never be subdivided, no loud noises, no offensive odors, no light pollution, all sorts of things.  Because most of these are zoning issues I countered with a promise to respect all applicable zoning laws, but the seller insisted on their own, bizarre wording.  Cash offer at asking price, and the deal fell through because of these really strange stipulations.

Regarding wholesalers, I haven't encountered them on the island in my search for a property.  I'd be curious to hear from the local professionals if wholesalers are active in the island market.  It seems to me that a local wholesaler who finds properties for "expats" might do well, considering the challenges we face when trying to buy from a distance.

One additional piece, when you see something you like you make a verbal offer, with zero money down. If the owner accepts it, then you move on to secure it, otherwise you move on to the next property you like or you decide to counter offer. It is best to ensure all issues are iron out before the official written offer. Make sure all conditions are on paper, even if it is a sofa you want to be part of the deal, and have the seller sign the offer first, if they sign it, then you put the money down and sign it.

You should also set an expiration of the contract, for example 90 days. If the closing does not occur during the period selected then the deal is dead unless you all agree to extend the period.

Work with a lawyer, your own!!! You want someone working for you, not for the seller or the realtors involved, also insist your lawyer holds the money in escrow and not the realtors or the seller's lawyer.

You as the buyer should be setting the conditions of the purchase, and the purchase contract should be based on a clear tittle, property clear of taxes, a appraisal value and a home inspection, don't rush, it is your money and there are thousands of properties in the market and few buyers.

Your biggest enemy is rushing thru a deal!!!!

Screw business practices, be in charge, it will be done your way or no way.

Thanks to all for the feedback. Been a little busy doing landlord things and have to pick my best times to get online.

I appreciate that things move on Island Time and that there are ways of doing business that may seem, well, foreign to a mainlander. I am very cautious about contracts and have had to dodge my fair share of scammers in my professional life.

I have a good deal of real estate experience and do move very slowly (Rey) when it comes to getting tied in to a property. I've always subscribed to the outlook that one shouldn't "fall in love" with any particular place, even if that seems at first glance to be your dream home.
One always has to keep an eye out for what it would take to liquidate it should the need arise.

I am interested in knowing whether there are Title companies (that have in-house attorneys)
or something similar?
Is there title Insurance available?
Do lenders tack on PMI or is it selective?
Can you go to a courthouse (my term) to find a history on the property with tax information
via an assessor or other Govt bureaucracy?
IOW where is the information recorded?

Thanks again all. It's hot here, 102 degrees heat index and I am wilted.

There are title insurance companies, very good idea given the inheritance laws in PR.

Im a local mtg lender here on the island and can address a few of your questions.  Title companies here do typically have their own in house attorneys however do note that title companies  operate a bit differently in PR than in the states.  Its still always wise to have an attorney tied directly to you looking out for your best interest. Owners title insurance is optional but always reccomended. There is only one Private Mortgage Insurance (PMI) company on the island, MGIC, and lenders only utilize them for conventional financing when one is trying to finance more than 80% of the property's appraised value.

property records are not easy to come by but if you are able to obtain what is called the catastro number ( similar to a parcel# in the states) from a seller or realtor you can take this to your attorney and much can be found out about a particular property and you can give this number to a lender and they can at least quickly find out property tax status.

hope this helps

I had hoped that Larry would chime in.  Always good to hear from someone with a professional's knowledge and experience.

From what I've been told, deeds are recorded in two offices, one for registration purposes and the other for taxation.  Apparently all kinds of trouble ensues when the property descriptions are not identical.

Anyway, the property taxes are managed by CRIM.  Their website is crimpr.net, and if you have the catastro that Larry mentioned, you can get some pretty good information, including a google earth image of the property itself.  From the crimpr.net homepage scroll to the bottom and select "catastro digital" to get to the google earth map of the island.

Awesome Larry and WW, thank you for the detail. I hope this helps others who are looking to settle on la Isla permanently. It makes sense that there would have to be a agency with some oversight, I just didn't expect it to be Island wide. Here, as you may be aware, each county has it's own assessor and taxing authority, be it muni, school or bonds for special projects.

Which brings another whole set of questions to mind. Such as, how are appraisals done from locale to locale? Example: is Culebra assessed differently from Cabo Rojo? How so?
Is there a homestead exemption, senior status (pensioner) or the like?

I promise I am not writing a book, just that when I go to PR Govt sites that are all in Spanish, it takes me a while to translate all the bureau-speak and hurts my pea brain after too long.
So, Thanks again for the local knowledge.

When you say "appraisals" Im assuming you mean for property tax assessment correct?  If so the answer is a bit complex.  There is only one dept, CRIM, that handles it, however each municipality has its own factor (or multiplier) used to determine the annual property tax amount . The factors are all very similar to each other. The problem however lies in the actual assessments. There is only ONE factor used islandwide by CRIM for the actual assessment of a property and that figure has been in place since 1957...and its a very low one at that which is why property valuations (and annual property tax amounts) are so low. So basically you take the property assessment value multipled by the municipality's factor and you have your annual tax.

There is an exemption ( up to 15,000) for property taxes as long as a property remains a primary residence. Very seldom will a property exceed this figure which is why you hear people say " you'll never pay property taxes" if you occupy the property as your primary home.

Anyone that purchases ( or has purchased in the past) here needs to be careful though because once the home no longer is a primary residence the exemption goes away. CRIM typically will not keep track of when the homeowner moved, but they are triggered whenever the owner sells ( normally by a change of ownership request) and lets say the property stopped being a primary home 4 years ago...CRIM can go back up to 5 years to collect taxes....and if they decide to do a new assessment and say maybe improvements were made etc, the seller could be in store for a very high and unexpected bill from the CRIM. People in the metro area are starting to see more random assessments and Im certain soon the assessment valuation factor will change.

Its fine and of course encouraged to do upfront research on a property, but please please be sure to have an attorney in place before moving on a property here.... especially if buying in cash as most of  this type of info is difficult to find on your own especially if the Spanish language is a challenge....and even if its not you typically need to make multiple trips to the CRIM and or property Registry and spend countless hours there to get it.

The whole point of earnest money is to get the property under contract so you (the buyer) have a specified time frame to complete the purchase and the seller takes the property off the market.  The buy/sell agreement can include contingencies which must be satisfied, such as a clear title, etc as Rey noted.  If the seller fails to satisfy the contingencies, you may exit the deal and get your earnest money back.

If you (the buyer) fail to complete the the transaction within the time agreed, you may have to forfeit the earnest money deposit.

***

Thanks Larry, yes property taxes are what I was looking at.
You say -
"CRIM can go back up to 5 years to collect taxes....and if they decide to do a new assessment and say maybe improvements were made etc, the seller could be in store for a very high and unexpected bill from the CRIM."

Is this done after a closing on the property? Or, at the time of the closing if a new assessment is made? Is this something the seller may attempt to use as a negotiation tactic, or is it just a non-issue on the property for the buyer?

Also-
"...you typically need to make multiple trips to the CRIM and or property Registry and spend countless hours there to get it."
Do you mean without an attorney? I know here many R.E. attys have runners that will spend that time chasing down title clouds (for a fee) and when cleared, it's a doable deal with ability to get Owner's TI.
If something does show up, it's over for the present contract terms and either amended or a new one is written. Or, the deal is dead.

I had to deal with the CRIM after we closed on the house. 

When making the pilgrimage to the CRIM office, (take a book) plan to spend most of the day.   But last time I got a number and then you give them your cell number.  They give you a call when you're number is coming up.  This allows you to run some errands or have lunch while waiting.   I go to the Arecibo office , parking is always a challenge. 

If you don't speak Spanish, take a PR friend with you to translate or put one on your phone as sometimes it is difficult to communicate.

Remember to request tax exoneration for your new house! And be ready to pay any back tax owed on the property.  😎

On the other hand, if you are just making an offer to buy, you could require the seller pay all back taxes owed on the property as a contingency in your offer.  😁

Also take the deed with you!

Yes crim can go back up to 5 years for back taxes or assess a new value after a closing (for repairs improvements etc) that potentially could create a new lien if left unpaid. The "when" just really depends.  If obtaining a mortgage typically a title company ( if they feel a charge from CRIM could come)   will escrow an amount ( to be paid by the seller at closing) to be prepared and the seller has a certain period of time to address things OR the money is returned after the 5 year period.  However a bill from CRIM can come after a closing for this as well so one just needs to be prepared.

Typically the attorney that handles the presentation of the sales deed in any real estate transaction will provide their contact  info to all parties involved and will assist with CRIM issues when called upon , even after a closing so hopefully one doesn't have to do much on their own unless they want to ( or have issues reaching an attorney for help). There are " runners " used but typically as with many things here its all about your connections.

All very good information fellas. I appreciate your insight and experiences.
So as not to get too far afield of the OP, what are lenders requiring for length of time on island to qualify for a loan? 6 month residency or ?
I'm seeing plenty of good looking properties and would like to make a list to come and see them.
I am a few months (STILL!) from finishing up remodel and sale of my OK properties. But, if I find a place that I know will work for me, what expectations will I have to start a loan from a bank or Mortgage Co keeping under 80% LTV?
I am thinking this may be a good time to start house hunting in earnest before prices go back up. I've seen places in the city here that have doubled in the past 12 months. I know location, etc. But these were not super neighborhoods to begin with.