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 is an archipelago of 700 islands and cays surrounded by turquoise waters, pristine beaches and is inhabited by some of the friendliest people you’ll ever meet. Located just 50 miles off the coast of Florida, The Bahamas attracts millions of visitors each year. Many arrive on vacation and soon discover the favourable conditions which make an investment in paradise an alluring option.
So, where do you start and what do you need to do to make the dream a reality? Brian Austin, a dedicated and trusted advisor in Bahamian real estate for more than a decade, is here to give you the rundown. As he explains, it can actually be a very easy process if you follow it step-by-step.
Here are the four steps to buying property in paradise:
Step 1 – Identify the property.
Identify the property by selecting a professional to 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. You may want to be reminded of home in some small way; decor or maybe even the furnishings. You may want to invest for the purpose of establishing residency, or perhaps to enter the short-term vacation rental market. It’s best to be open… spill the beans. A real estate agent is also well versed in the property laws and regulations on the island. They will be able to help you find the right property and ensure the process goes smoothly.
Brian : Once a buyer has identified the property they want to purchase, they would have to decide whether they will be purchasing it in their own name 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; however, commercial banks are making it easier than ever to qualify for mortgages. At one time, the banks focused mainly on “the big fish” – properties valued in excess of $1 million – but I think they’ve now realized that times are changing and people are investing in smaller properties for vacation rental purposes and such. We’re now seeing an increase in lending on the more moderately-priced, second home investment properties.
Step 2 – Make an offer to purchase.
Once you’ve identified the right property, make an offer to purchase, and be prepared to negotiate. It is advisable to offer an earnest money deposit in order to show serious intent.
Brian: It’s always best to make an offer with a signed deposit cheque ready to go. This shows clear good faith and may even tip the scale in the buyer’s favor.
I can’t stress enough how experienced real estate agents make this process as easy as it could possibly be. There are instances where negotiations never get past the initial offer – an experienced agent will help ensure that negotiations don’t break down.
Step 3 – Hire an attorney and have the sales agreement prepared.
All real estate sales in the Bahamas must be completed by a Bahamian attorney in good standing. The attorneys for the buyer & seller negotiate the terms of the sales agreement.
Brian : 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 also arrange for the sales agreement to be executed electronically. A client doesn’t have to be present to sign the agreement. Sometimes they may simply need to be notarised, especially if they are handling the entire deal from abroad. Once executed, the real work begins.
Note: The Bahamas does not have a digital land registry. The bulk of closing on a property here is inspecting the transfer of titles between owners.
And finally… Step 4 – Close the deal
That’s it, the deal is done once all requisitions are met, the conveyance is signed and final proceeds are received.
Brian: If a foreign buyer has owned property in The Bahamas previously, that buyer would need approval from the Ministry of Finance and the Investments Authority Board. Investment Board approval is necessary before the sale begins, but a sales agreement must first be in place. Investment board approval is necessary for any property valued at $5 million or over 5 acres. When a sale closes, the conveyance MUST be stamped & recorded.
I recently sold a property of 4.999 acres. The sellers cleverly decided to purchase under 5 acres since they felt this would be attractive to a new buyer since the buyer would not need to wait for Investment Board approval, and it sure was.
About Brian Austin
A dedicated and trusted advisor in Bahamian real estate for over a decade, Brian Austin started out in the business during the fall of 2008 at the height of the economic recession. Undaunted, Brian jumped in with both feet, growing his business through a personal and straightforward approach to service, gaining the respect of his colleagues and valued clients throughout the Bahamas.