Lin here, Owner/Broker Rainbow Realty, Vieques Island

I am making an attempt here at 4 things:

1. to provide some info about the island, AND in relation to buying real estate here

2. to defray some misconceptions and share some reality about Vieques, the real estate market, and owning/renting here

3. to address just a couple of the "political" issues surrounding real estate and sales/rentals here on island.

4. Create a Buyer and Seller awareness of on island RE Agency "protocol", as it is commonly practiced here in Vieques, among especially the Professionals that have worked here for many years.
   
   Since we do not have a "MultiList"(MLS) System that is published and accessible to Clients and Brokers alike, we as Brokers have set up a sort of "island protocol" to keep the peace between brokers and help people navigate the market here safely and avoiding controversy.
   Some of the Brokers work with all the other Brokers and therefore have access to ALL properties listed.
   As a BUYER...and a SELLER...YOU SHOULD ASK when you are shopping for a Broker.
   We at Rainbow pride ourselves in having access to almost all properties for sale including making efforts for clients with FSBO listings.
   Sellers have various options to list their properties.
   It is acceptable to contact all the Brokers and set up essentially an OPEN listing with everyone. This can be contracted or verbal. One thing that IS very important, is that all agencies have and post the same info including the same price. The inconvenience is that you are working with multiple people.
   Another option is to work with 2 or 3 agencies and establish a CO- or MULTI LISTED property. Again it is important that all have and post the same info on the property.
   These type listings probably give the Seller the most "exposure" for their property for sale.
   There are many Sellers who prefer to work with just one or two Brokers.
   In all these cases above, whoever brings a Buyer to the Seller and works the deal, is who gets the Commission.
   The Agent works for BOTH Parties(see Fiduciary Responsibilities above) and the way we at Rainbow see "working a deal" is to assist in a "meeting of the minds" so that all parties are happy with the outcome. We pride ourselves in writing a solid professional contract that protects all parties interests, as well.
   A BUYER can engage any Broker as a BUYER BROKER, to work just in their behalf and a Broker can do that on any property NOT listed by that Broker...mostly a good idea NOT within Agency as well due to possible "conflict in interest"...and BUYERS and SELLERS should ALWAYS BE AWARE OF "conflicts in interest".......
   For example: an Appraiser who is also a Broker....Caution should be exercised if the Broker has also acted as an Appraiser. Also, if the Broker has a personal interest in the sale property/this should be disclosed!
   Another place to use caution is in working with the same Broker presenting multiple offers to a Seller for more than one client...and how that is done.
   Brokers have a CODE OF ETHICS that applies to working with Buyers and Sellers ...and other Brokers...and unfortunately, this is not always followed.
   The final type of Listing is the Exclusive where only one Broker/Agency has a Listing. IT IS VERY IMPORTANT IF YOU SIGN OR AGREE TO AN EXCLUSIVE THAT THE BROKER YOU ARE WORKING WITH, WORKS WITH OTHER AGENCIES!....Otherwise, that Broker must bring the Buyer and the property exposure may not be ideal for the Seller.
   Sellers: ASK QUESTIONS!
   BUYERS: ASK QUESTIONS!
   "Do you as an agent co broke with other agencies??"
   "How long have you been in Business?"
   "Have you had any other dealing with this owner/property?"
   "How do you view your Role in transactions and negotiations?"
   Etc.
   Of course in a small intimate community, most everyone knows everyone and there are many friendships with clients......
   BROKER EXPERIENCE IS HUGE HUGE HUGE...YOU WANT A BROKER WHO KNOWS WHAT SHE OR HE IS DOING...AND THAT COMES WITH YEARS OF EXPERIENCE....
   The 2 Brokers at Rainbow have over 20 combined years of EXPERIENCE! We have seen it all/done it all..and are GREAT Problem Solvers!...We provide that expertise and experience in working with our Clients and Customers !!...a Truly great Benefit!
   
   Buyers Beware.....
   Since we do not have a MultiList System(MLS) it is VEY VERY important that you be UPFRONT and HONEST with the Brokers you contact and make sure they are also asking you questions, because they SHOULD BE.
   Let the Broker know IF you have spoken to another Broker on island.
   By doing this, everything is "above board" and keeps all parties out of potential problems and controversies.
   Way too often here, Buyers will contact multiple Brokers and not say a word about seeing pictures or receiving info re: a property thru someone else 1st. This creates issues for the transaction, but even more importantly, it sets up a NEGATIVE DYNAMIC for the Brokers here to have to deal with....and it is a very very small community where we like to keep relations good.
   So...PLEASE be respectful of this...be honest and forthcoming...and know that we all thank you for that!
   Sellers Beware...
   ...IF YOU WANT TO CHANGE BROKERS...tell that Broker you are making a change!...same reasons as just mentioned. If you want to open up what has been an Exclusive or Co Listed property, TELL your Brokers!
   Help us Help you............and help us keep the "peace " here...thanks!

REAL ESTATE MARKET/CONCERNS/POLITICS

WE ARE CURRENTLY EXPERIENCING A "MARKET CORRECTION" along with the economic downturn.......PRICES ARE SOFTER THAN 1-2 YEARS AGO........IT'S S GREAT TIME TO BUY...!!!!...We are predicting another year of reduced prices, followed by a gradual increase, resulting in GREAT equity gains over 5-7 years for current buyers.........

As everyone here is certainly aware, real estate in Vieques became a hot item after the US Military departed and we've gotten, and are getting, a lot of very positive "publicity"....
 

The PR Gvm't is also looking at ways to "grow" tourism in Vieques, Culebra and Ceiba ; creating a triangle between the 3 islands, and hopefully an emphasis on Eco-Tourism at least for Vieques and Culebra.

There is now a NEW Vieques Chamber of Commerce/Associacion de Comerciantes(web page being developed http://enchanted-isle.com/chamber/  ) with an objective to "keep an eye on" and participate fully and strongly in the future of Vieques both on the business front, and the social/community front, and the tourism front; with the main priority of looking out for the best interests of Vieques and her people....

The Chamber has identified and formed 7 committees to work on our most pressing issues and needs.

Hopefully those who live here and the government can work to regulate the growth and development so it is good for the island and HER people!........
We are at a crucial fork in the road........

The Government can also be effective in helping to maintain the integrity of Vieques and in preserving the beauty of the island and developing more of the ecotourism economy/support now that we have the largest Nature Preserve in the Caribbean!!!.
YES, we can keep MacDonald's and Burger King out......... IF that's what residents want! We can maintain the 3 story building limitation.........
We can limit density and developments!!!.....We can even limit the number of cars if need be....
We need better transportation alternatives to the Main Isle........, etc.....
These are the things the local and PR government and the people CAN control...but we need to WORK TOGETHER , and not divisively............
There can also be government incentives to develop ecotourism projects.
Density regulations can be enforced, thereby restricting larger condominium and hotel developments, keeping with smaller guest houses, Inns, and B&Bs. The local community should have a voice in all this!! Do we want Hilton here? Fast food? Traffic Lights??......Casinos ?? Personally, I hope not!.......but I do believe that it is up to Viequenses------NOT up to the potential developers !!!...BUT, people will need to organize and speak up and work together to this end and whatever goals are in the peoples best interest here!!.....
Many of us transplants are happy to be involved if welcomed......


Of course, with growth comes growing pains...
There are Viequenses returning now, and who want to remain here at home; who see the possibilities of being able to make a living here, but cannot afford to rent or buy real estate because of the increases in rents and prices since 2003.
One of the other negatives may be the influx of foreigners who do not embrace Vieques for what she is and has always been and who do not understand, appreciate or even know, or care about the struggle to free her from the hands of the military.
We, at Rainbow , encourage people to learn about the island, gain an understanding about cultural and language differences and commit to being a part of vs. separate from...and different.

Adapt to the ways of the island, and be helpful ..vs wanting to change it, and imposing outside ways....
People seem to come here because they love it, BUT then want to change it...... immediately!
Why?...to make it more like where they are trying to get away from?.........what is up with that?

We are getting the "dreamers seeking a hide-away" back to the isle now... vs. the big developers and speculators...much to our delight!

One of the other BIG things happening is that the W Hotel seems to be on target to open by year's end!  (DELAYED until Spring 2010) We have been assisting many with housing, and we are impressed ...so far...with the talk of the W's wanting to be community based and wanting to use community services, etc...........sounds great, and our experience with the administration being brought in, has been positive....let's hope they "walk the talk"....and it could be ALL GOOD!...

Of course, on the Real Estate end, these visitors , as they come to Vieques, may become our next buyers, and with what the W is getting for room rates...these may be people willing to spend more money/cash....and that could begin to drive prices and reduce inventory..............time will tell...

Politically, I am not sure things are much different....There were high hopes, but much seems to be the same 'ole' ..same'ole...politics as usual...Titles in Bravos and Santa Maria are on hold....there are issues being raised and threats to re-possess land that is individually held, etc, etc. We are hoping this is a "bump" and the new administration will do the right things.

There have been issues with theft and police numbers/protection...and some changes need to be made and made quicker than slower....one of the hopes is that with the influx of the W presence that things like crime and bio bay/ecological protection, and trash on the beaches and street side will perhaps get more "attention" and resources....let's hope.........whatever it takes, i guess!

The roads to the reserve beaches (both east and west) are getting an overhaul and improved/maybe paved?....and Fish and Wildlife is creating more of a presence on isle, which is a good thing.

Ok....some FYI's

Traditionally and for the most part, Real Estate professionals service the SELLER, but have a fiduciary responsibility to both sellers and buyers---this is designed by law. The majority of sellers here are local and the "mis-service" is not getting them the market value for their properties. Many of the brokers do co-broke and work with each other as a service to both buyers and sellers. Rainbow prides itself in being able to access any/all properties listed and also will pursue FSBO's where appropriate.

Now---one of the things that is going to be interesting...is to see what our local Gvm't decides to do with the 4000 acres they received from the US Gvm't on the West end where the pier is........We are told that the cargo ferry WILL be re-locating by Nov. to Rompeolas (old military pier), followed by passenger ferries, but still going to Fajardo. We are told that the downtown location will be rehabbed??...There is talk of small cruise ships...and a number of other things including BETTER FERRY SYSTEMS....cargo and passenger...and we are....... w a i t i n g.......as talk of the need for a bridge increases..........which most residents are opposed to!
 

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TAXES/LICENSES/INSURANCE/UTILITIES

Taxes, one of lifes certainties...........
Property taxes here are LOW....we are still assessed at 1957 values and the rate is less than $10/$1000.
Full time residents also get a Homestead Exemption....
No wonder the government is broke!....but instead of adjusting this, the government has instituted a sales tax , and are after various other means of getting money by enforcing some laws previously not enforced, instituting Tourism taxes and persuing tax evaders including vacation rental homes.....Hacienda just instituted an "emegency tax" which effectively doubles property taxes on 2nd homes(still minor $)...but....hopefully this will all "shake out" and make some sense...and help the Gvm't get into the black at some point.
ARPE, permits and licensing, is also going thru a major overhaul...probably for the best, but again....some critical issues have been raised including requirements for developments, and community participation in approvals...

ON THE RENTAL FRONT:

ALL rental house owners need to get a PATENTE (Municipal License to do business), and are supposed to register with the Government for the new sales tax...it DOES NOT (our understanding) apply to you, but you are still supposed to register, unless you run all rentals thru a lic'd and regs'td agency (like rainbow realty!)
...also
We at Rainbow handle the 7% TOURISM TAX imposed on guests we rent to.
BUT--if you do your own rentals, you must register with the Gvm't and Torism and the Municipality and pay this tax on the rentals YOU do....

PLUS, you MUST pay local income tax...........shortly to be strictly enforced.........and it IS the right thing.

HOMEOWNER'S INSURANCE can be acquired. We have resources for our home buyers. It's NOT that expensive even with hurricane and earthquake coverage. Contents are high due to the problems with theft here. Wood houses ARE expensive to insure.
IF you mortgage, the bank will provide for a policy to cover the MORTGAGE ONLY...so, if you want full coverage, you must add on!

UTILITIES--Electric and water can be transferred right on island with a copy of your deed and is helpful to have a copy of the utility bill when you go to the offices. Electric is next to Chu Garcia's and Water next to Ambulance Service in town. Deposits of less that $100 are required for each for residential accts./more for commercial.
Phone service is almost impossible to transfer....it is just easier to cut service and order new service.

CELL PHONES....most work now here.
There is some WiFi available in town/Air Cards work all over and DirecTV now offers a wireless service in conjuction with TV service.
There is DSL offered on the North side of the island and mid-island only ,and of course there's good ole Dial-Up...all with PRT.....

CAPITAL GAINS TAX MUST be paid on RE sales....residents pay in April with regular income taxes...BUT Non-residents have a withholding imposed at closing.
We at RR make this VERY easy and non-complex with the 2 accountants we work with assisting you through the process....it is relatively painless with the system we have developed. Residential is 10% of the GAIN (difference between what was originally paid, and what it's selling for MINUS improvements). Corporate Taxes vary.

The tax exchange (1031?) IS NOT VALID HERE..........fact! We do not pay Federal Taxes here, so it does not work.

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FINANCING/MORTGAGING

Titled property can be financed with a local institution. Stateside banks DO NOT finance here.
Procedure is pretty consistent with stateside ways.........
If you need to finance here, we suggest ScotiaBank in Fajardo or Banco Popular. It is a difficult and time consuming and frustrating experience at best, with abnormally high closing costs.........
Easiest financing is to take equity out of a stateside property and bring "CASH" for business here.
 

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TITLED vs NON-TITLED (lack of title)

Title, a piece of paper that can be registered with the Property Registry allowing you and others the ability to lien or mortgage the property, IS NOT available on all property in Vieques. Up to 50% of the property currently available has no title rights.
"UNTITLED" does have POSSESIONARY RIGHTS...and that is what people sell---their RIGHTS to the land (excluding title)...plus any improvements that are on the land.
You get a DEED/Compraventa or private contract basically....which allows you the ability to claim the property in the eyes of the Municipality, and to apply for utilities and building permits.
IS IT RISKY?....Raw land carries the greatest risk, so it is important to clear the sale with the government, clear/clean the property, fence, and build something ASAP.
Buying an untitled property with a building and with utilities is really not risky.
At some point in time, the government will be issuing/selling titles...again .........and at that time, you may buy your title.
How much?...who knows.....but there is a precedent that was set in 1999/2000 where titles were valued at 10-20% of the appraised land value.
Monte Santo and Isabel and Moropose have "untitled" uso-fructo land parcelas which CAN be titled with a +/-6 months process and a few thousand dollars.
Santa Maria/Bravos de Boston/Villa Borinquen (there ARE a few titled properties purchased from formed Mayor)/and Monte Carmelo MAY have titles available over the next few years....We actually believe that VB titles are being issued at this time.....Until then, cash gets you a great property and prior to the prices taking a huge leap when titles come in.
So yes, some risk...with great reward, bigger bang for the buck........but not always without a little "hassle factor"....
 

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CRIME

Sure, we have some.
Mostly still petty theft, although this past year there have been some "hold ups"....it continues to be the case that the more serious crimes are "inter-community"/domestic and drug related.
Be smart; Be careful..........no matter where in the world you are these days.
General "rules"/suggestions:
DO NOT leave valuables unattended on the beach, in a car, or near an open window in your rental house/hotel room.
Lock your doors at night..............Don't get too wasted partying...........

WE recommend secure houses......security doors and windows and an alarm system.......... ..and if you are renting out, put a "House Book" on the kitchen counter with tenant security measures.
 

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BROKERS/RE LAWS

Licensed Real Estate people are just that: LICENSED by the PR Government (Law 10) to do RE business in PR.
This is for your protection, the protection of buyers and sellers.
We are held to an ethical standard and we do the very best we can to have EVERY client walk thru, and away from a transaction with RR as totally satisfied and happy clients. This is our Goal.....!!
We at Rainbow go the extra mile in helping with financing resources, property caretakers, construction referrals, tax issues, utilities, registering untitled properties with the local government, etc .....
.....we are available throughout the process and afterwards............
.....and we prefer a continued relationship with our buyers who intend to rent either long term. seasonal or weekly.....
......since we are also a RENTAL Agency.

There are a number of "kitchen table brokers" passing themselves off as Real Estate Agents....watch out!!!!
ASK to see a RE license if you are doubtful.....if there is NO office, advertising, etc.........
We suggest you ask around about whoever you are intending to work with.........you WILL get the scoop...good and bad.

Sheila Levin of Crow's Nest Realty has written more on this:
http://www.enchanted-isle.com/enchanted/letterfromvieques.htm

 www.viequeslaw.com

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CONSTRUCTION/PERMITS/GOVERNMENT AGENCIES
There are a number of contractors on island. We suggest you meet with 2-3 for estimates, service, prices etc...and decide from there. We like EDK a lot, and Claritza (owns Maritza's car Rental), Chevo Bonano (Ferrateria Chu Garcia's owner), and Cheo Molina.
Depends what you want done, what services you want, and the price you are willing to pay............
There are currently a couple ads in the Vieques Events for surveyors/engineers.
ARPE is the government agency regulating permits for use and construction, new utilities, etc ............
CRIM is the acronym for the Tax Man/Hacienda......property taxes division.
Dept of Natural Resources often has to be called in before excavating can be done especially along the waterfront, but theree are also historical burial sites here...
US Fish and Wildlife Service/Dept of the Interior/US Government controls the entire East end as well as the far West end.
Around the old military pier, there's 4000 acres now belonging to the municipality.

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LEGAL STUFF/Closings/Inheritance
In order to be a Notary here, you must be a lawyer.
Lawyers /Notaries handle closings in their office or another office (i.e.: Realtor's) and can charge up to 1% of "the value of the doc"...plus there is about .7% in governmentt fees, also a % of value of doc i.e.: sales price and/or mortgage amount.
Buyers often pay legal costs but always negotiable and by law the split is +/- 70% seller/30% buyer if no agreement differing from that.
We have 2-3 lawyers that we use and recommend depending on the "deal"
Inheritance laws here are important to know..........
We are governed by Spanish Civil Law........
In a nutshell: meaning children inherit....and if you are married, whatever you buy, your spouse owns 1/2.
If a parent dies, the children inherit the deceased portion of any property owned.
A will allows you to will 1/3 of any portion of your belongings to a spouse or a particular child to establish "control" or can be willed to another party........
It is best to consult with a lawyer for any concerns with this. Corporations can be formed affording some protection.
After a death, we highly recommend dealing with an estate ASAP as it can take a year to get probated/in order.

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Lastly, most of the people here on island are very good hearted, and very honest...but "weigh" what you are told and re-check info with professionals.........what you hear in the local watering hole is most likely different than what you will hear from a licensed Broker.
www.viequeslaw.com

Good Luck..........and WELCOME to our island Paradise.
Contact us for assistance and to set up an appointment. We suggest familiarity with the island before looking to buy....

RECOMMENDED READING (should be required) before considering buying property ...on any small island....:

DON'T STOP THE CARNIVAL by Herman Wouk

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Lin Wetherby
rainbowrealty@hotmail.com