- Here’s a question for you. Would you like to own a piece of paradise?
Of course you would. Then what are you waiting for, paradise is here, the Bahamas, an archipelago of 700 islands and cays surrounded by turquoise waters, pristine beaches and inhabited by some of the friendliest people you’ll ever meet. Are you sold on the dream yet?
Let’s say you want to buy a piece of paradise, where do you start and what do you need?
No worries, Brian Austin, our sales associate is here to help you out. Brian has been a dedicated and trusted advisor in real estate for more than a decade and he’s here to give you the run down and what you need to know about purchasing real estate in the Bahamas. As he explains, it’s a very easy step-by-step process.
Here are the top four steps for non-Bahamian or cash buyers.
1) Identify the property.
Identify the property you want to purchase via online searches and selecting a professional to assist and help you weave through what can easily turn into a daunting task. A good agent immediately knows what a client is looking for as long as the client is upfront about…the little things. (A new property can be home away from home so you may still want to be reminded of home in some small way, it can also be the complete opposite of home, but it’s best to be open… spill the beans)
Brian : Once they have identified the property that they want to purchase thy have to decide whether they are purchasing it in their own names or via an international business company (IBC) which can be set up by their attorney for a very nominal fee.
It’s fairly simple to purchase in the Bahamas. Most of our foreign clients are cash buyers. Commercial banks one time ago focused mainly on “the big fish”, properties valued in excess of $1 million and up but I think they’ve now realized that times are changing and people are buying smaller properties for vacation rental purposes and such.
2) Make an offer to purchase.
Brian: It’s always best to make an offer with a signed deposit cheque ready to go to the attorney. This shows clear good faith and may even tip the scale in the buyers favor. I cant stress enough how experienced agents make this process as easy as it could possibly be as there are instances in which it may not get past this point.
3) Hire an attorney and have the sales agreement prepared.
Brian : All real estate sales in the Bahamas must be completed by a Bahamian attorney in good standing. The sales agreement terms are negotiated between the attorneys for the seller and the buyer. As a buyer, your attorney would hold your deposit in escrow until all terms are agreed upon and it’s ready to be executed. Attorneys can arrange for the sales agreement to be executed digitally or by courier service abroad. A client doesn’t necessarily always have to come over to sign the agreement. Sometimes they may just need to be notarized especially if they are doing the entire deal from abroad. Once executed, the deal officially gets started and title documents are requested. In the Bahamas this can take some time as this is all done mostly by inspection of physical documents.
Note: The Bahamas does not have a digital land registry so you have to get a title search done to ensure that there is clear title to the property. Your attorney will handle that of course.
4) Close the deal
Once requisitions are met, the deal will close and conveyance is issued to state that ownership has been transferred and that the document is recorded.
Brian: If the buyer has owned property in The Bahamas before that buyer would need approval from the Ministry of Finance and the Investments Authority Board. You can make an offer on a property, get an agreement signed but it has to first get Investment Board approval. Any property even if it is a buyer’s first property purchase, it it is valued at $5 million or over or five acres needs investment board approval.
I recently sold a property of 4.999 acres and the owners cleverly only wanted to purchase 4.999 acres because if they wanted to sell quickly they would not need Investment Board approval. That is the only thing that makes that time a little longer.
Note: Bahamians buyers do not need Investment Board approval.
Brian: Most local purchases have some sort of financing attached, though I’m seeing more cash purchases lately. Still, it is important to know how much financing you can get FIRST. You should not start shopping until you know what’s in your wallet. Imagine how more powerful you are when you’re completely ready to go. This is the most important step to successful purchase via a mortgage (other than SAVE, SAVE, SAVE)
Clients leave the banks many times and don’t know where the initial deposit is coming from or what are the closing costs. Attorneys charge up to 2.5 per cent on the transaction and clients often don’t realise that that is on the sales price and on the conveyance. A lot of clients don’t understand that they have to come up with the first time home owners exemption. You are going to be exempt but you still have to come up with that. Before your conveyance is signed your closing cost will be the largest figure you will need to have in the bank before the sale can be closed and the mortgage begins. It can be a daunting process based on the fees involved (what are the fees exactly)
Through my experience, there’s really no easy way to calculate fees but I’d say worst case scenario, if you have 20% of what you’d like to purchase, you will be successful.