Archives for posts with tag: abaco homes for sale

Many times I am asked how the process of buying real estate in the Bahamas works.  Often our foreign home buyers (who love the idea of having a tropical home in the islands) are concerned about the process and the security of the investment.  I will discuss the Bahamas Investment Safety and Security at another time.  Below I have outlined the rough steps and a very rough estimate of the time it takes for each one.  I have to qualify all of this by saying the estimates of the length of time it takes vary widely.  How quickly a sale will close in the Bahamas is dependent on many many factors, some of which are beyond the parties control.  For instance I have seen a financing application take 6 months for approval.  I have seen title and requisition process take as long at 6 months due to continuing questions arising from the history of the chain of title.

Beach View 6

Above: Palm Ridge at Bookies Bay, The Most Charming Cottage In The Most Beautiful Place on Earth, currently priced at $750,000.

On the other hand, I have seen instances where the whole process moved like clockwork and the new homeowner had the keys and were enjoying a cocktail on the back porch in less than 7 weeks from the time of first offer.  For things to move this quickly under the bright Bahama sun (which seems to slow everyone and everything down to the speed of warm molasses) is not a common occurrence and it is imperative to have patience when dealing with a real estate transaction in the Bahamas.

There is a major factor which can influence the speed of a real estate transaction here, and that is whether a bank is involved providing financing for the purchase and/or if a bank is releasing and existing mortgage on the property being sold.  This is partly a result of the Bahamas banking environment being dominated by 3 major Canadian institutions.  The final approvals of any major decisions the lending institution has to make is not made here in the Bahamas, it is made offshore somewhere.

That said, the lender won’t commit to financing a purchase until they have a copy of a formal purchase agreement in hand.  We commonly insert a 21 day financing clause in purchase agreements which allows the buyer 3 weeks to formalize their loan and get a commitment letter.  3 weeks may seem like a good length of time, but I would suggest working on getting as much of the paperwork as possible into the loan rep, before making an offer.  They will take 2-3 weeks just make a decision, so if they are waiting on something from you like a reference or utility bill that will hold the hole process up.  I would ask 3 times for the complete list of all the documents they will need from you just to be sure that all the bases are covered.  In my experience they always come back a week later and say they need one more thing, and often that happens more than once.

With the 21 day financing clause inserted into a formal “purchase and sales agreement”, if you don’t get the loan secured you can get your deposit back and everyone can walk their separate ways.  The vendor is often weary of entering into an agreement which is dependent on a bank partly due to the time off the market with no guarantee of a sale and partly due to a bit of expense in hiring a lawyer to prepare a purchase agreement and work with the purchaser’s attorney on the deposit etc.  Title investigations typically don’t start until after the financing commitment letter is in hand.  Once the title is approved, they we move to conveyance drafting and approval and then the mortgage would be drawn down.

 Time to close a cash sale (no mortgage involved) is 60-90 days.  Time to close with a bank mortgage will be 90-150 days.  So keep in mind you won’t be able to take possession of the home for some months while waiting on the lender to do their thing.  Some people will purchase a home in cash and then leverage the cash back out with a mortgage after the purchase as it allows them to take possession of the home sooner.

  •  First step is to get the ball rolling with the bank and get a nod. (about a 1week)
  • Second we put in the offer to purchase, negotiate and hopefully reach agreement in principle (1-2 weeks)
  • Third you retain an attorney top represent you in the transaction, put up a deposit with the seller’s attorney’s ‘Escrow Account’ and the purchase agreement is executed by both parties. (1-3 weeks, this begins the real process of purchase, get appraisal, all paperwork to bank, references, etc.)
  •  Forth, you put in the formal application for financing, provide the bank with a copy of the executed purchase agreement and go through the motions with them. (3-5 weeks) (If Necessary, no bank financing involved, it would skip straight to the title search)
  • If the buyer is getting a permit from the Foreign Investments Board, the application gets put in right away and approval of the permit can take 2 weeks up to 3 months.
  • Then, once the mortgage is approved and you have a commitment letter in hand. Your attorney begins title search. (3-5 weeks)
  • Once title is approved the vendors attorney drafts a conveyance, it gets approved and the vendor executes (2-3 weeks)
  • Then the bank gets a copy of the conveyance and begins to draw down funds. (2-6 weeks)
  • Once the funds are disbursed, the sale closes and you can take possession. (you get the keys).

So, the long and short of it – it could take as little at 6 weeks to close a purchase or it could take as long as 6 months and it all depends on the seller, the buyer, the attorney’s involved, the government for the permits and often most importantly the lender.  So make sure to have the right people involved who are attentive, motivated and on the ball to see the sale happen.

I recently had a sale occur where the buyer’s attorney lost the purchase agreement after the purchaser had signed it and neglected to send it to the seller’s attorney for 3 months.  So while we all thought the sale was proceeding, it hadn’t even started.  Stay in touch with your lawyer and keep them moving things forward.

Lastly, having an experienced and motivated real estate broker or agent on your team can have a very positive effect on ensuring the least amount of frustration and delay.  HG Christie is one company with a strong team of professional sales staff who know the ins and outs of Buying and Selling homes, land and development property around the Bahamas.  Feel free to comment and tell us your story in buying or selling real estate below.  I hope you enjoy this post and find it somewhat useful.

Advertisements

Image

Whats New in Abaco? (Above photo: start of the GAFFW Triathlon in Treasure Cay at Sunrise)

It has been a long time since my last post and I’ve been chastising myself for weeks. But the reason for it is the tangible uptick in the real estate business here. Sales activity is looking up in terms of volume although prices are generally staying level. In the wider picture though, requests for appraisal services has improved dramatically over the previous year, vacation rental and boat bookings are generally stronger than 2013 and overall the economy in Abaco looks to be doing much better. I would almost hazard to say that the things are starting to look quite rosy here.

Anecdotally, there has been a few properties that have sold in the past 6 months at full asking price after having 2 or more serious persons interested. I haven’t seen that happen in years. As I have written before the condo market dam has broken and sales volume is gaining serious ground. There is great value to be found in the condo market right now so it just makes sense. A recent sale in Hope Town set a new price record for a single family estate on the cay – “Oasis” was acquired for $5.5M at the beginning of this year setting the bar for residential real estate on the cay.

Interest in Treasure Cay has risen since the recent announcement (i.e.“leak”) into the papers about a serious potential for sale of the remaining development holdings as well as the marina and resort components. Nothing is certain but the party from Vancouver has been in due diligence since 2013 and things maybe looking positive for a sale. If this happens the market there should improve significantly. I’ve been saying for a long time that the community needs some fresh energy at the helm. The restaurants and hotel are looking run down, the Spinnaker Restaurant hasn’t been altered (not even the drapes) since the 1980’s – time for some sprucing up?

In other recent news around the island, the new airport is promised to be commissioned and open this month, April. So we all wait with baited breath on that one. A company called IJet charters was trying to start a seaplane service that would deliver you straight to Hope Town, bypassing the MHH airport and the taxi and ferry rides. A great idea and was well received by many residents, homeowners and visitors, however it seems there is a bit of opposition from the government side. The hurdle will have to be overcome. I can’t stress how important a service like this would be for Green Turtle Cay. Ever since regular flights have pretty much ceased into Treasure Cay Airport, it has become a major trek for residents and visitors to get to GTC. One must fly to Marsh Harbour Airport, then take a 40 minute car ride (or $85 taxi fare) to the GTC ferry dock and then ferry over. Basically this adds $85 and almost an hour to the travel time to get to GTC. Not good.

But if there was seaplane service that dropped your right to the Green Turtle Cay Club, how great would that be? And GTC’s economic outlook all of a sudden looks worlds brighter.

Government is pushing ahead and building a shipping port in North Abaco, basically in the middle of nowhere and to the complete bewilderment of everyone…

Lastly, the GAFFW (swim, run, tri, fun) was another great success in its third year. Tomorrow marks the end of the sailing season in Abaco, being the Homer Lowe regatta for Opti’s and Sunfish. After this, the Hope Town Sailing Club which hosts the races will be losing most of its membership (winter birds/second home owners) until they return in Novemberish. On the other hand everyone is looking forward the summertime Regatta Time In Abaco with the corresponding ‘Fiddle Cay Stranded Naked Party’.

Almost forgot – Alburys Ferry service started offering a new service taking passengers to Lubbers Quarters (finally) and between HT and MOW and HT and Guana Cay. I hope it catches on. And so the gears slowly turn and Abaco slowly develops and slowly becomes bigger and better. The big question is do we want it to? Or do we want it to stay the secret paradise that it is?

Image

^^ My ‘selfie’ after the triathlon relay I took part in, filling in as runner and got my time under a 10 minute mile.

%d bloggers like this: