Owing a home is a big part of the American dream. But not everyone is fortunate enough to become a homeowner due to delimiting factors such as insufficient income, bankruptcy, bad or no credit, loss of employment, etc. For people with such troubles, owning a home is a distant dream and some of these people resign themselves to a lifetime of renting. But such people are not without options. Rent-to-own, which is also known as a lease-purchase option, can be an excellent alternative available to some people who are currently unable to buy a home.

A rent-to-own or lease-purchase option is an agreement between a prospective home buyer and a home seller. The agreement is basically a rental contract with a right to purchase the property after a period of time (usually 1 year). When a home seller offers a lease-purchase option, what they are really offering is the option to rent the house at some monthly rate, and to lock in the sales price of the home now, even though the prospective buyer would not actually purchase the house until a later time (if at all).

Here is a hypothetical example. Let’s say the monthly rent for a home is $1700. Under a lease-purchase option, a prospective buyer would rent the home for the $1700 a month, but would also pay an additional premium (e.g., $200-$300) every month for the option to buy the home after a period of time (usually 1 year). So in this example, the total monthly rent is actually $2000, but $200-$300 of the money will be applied toward buying the house at a later time. In other words, the home seller would apply the $200-$300 extra paid every month toward the prospective buyer’s down payment at the end of the year.

The good news for prospective home buyers is that it allows them to lock in the purchase price of the home now, even though they are not purchasing the home until a later time. The bad news is that if a buyer decides not to purchase the home at the end of lease term, the seller often keeps the premium amount paid over the year, although this is usually a point of negotiation.

Prospective home buyers should know that many of the terms described above are negotiable such as how much the monthly rent will be, how much extra has to be paid every month for the option fee (if any), the length of the lease term, etc. The other issue to consider is if it makes sense to lock in a home purchase price now in markets where real estate prices are still declining.

When compared to renting, a lease-purchase can be an attractive alternative because it gives prospective buyers an opportunity to own a home before they normally would be able to. There are some advantages to a lease-purchase option such as:

1) Low or No Initial Down Payment. Many lease-purchase options do not require an initial down payment.

2) Equity Advantage. At the end of the lease term, the value of a home may have appreciated over time, which benefits the purchaser.

3) Living Experience. Prospective home buyers have the opportunity to try out a home and neighborhood before purchasing the property.

4) Leverage Advantage. With just a small investment, a prospective buyer can control a property; yet still have the option of not buying the home if market conditions don’t warrant it.

Rent-to-own or lease-purchase option can be an effective strategy to home ownership. However, there are both positive and negative aspects to this type of approach (as described above). A good real estate agent can help you navigate the complex world of rent-to-own and lease-purchase option properties.

San Diego County is home to one of the largest concentrations of military bases in the United States. In fact, the San Diego area contains 12 major Marine Corps and Navy bases and facilities. If you’re in the military and moving to San Diego, one of your biggest decisions is whether to buy a property, live on base housing (if this option is available to you), or rent a home or apartment. If you choose to buy a property, there are many issues to consider before taking this step.

BUY OR RENT?

The decision to buy or rent is more complicated for military personnel because you may be assigned to San Diego only for a limited period of time. If you plan to purchase while in San Diego and then sell when you transfer, the condition of the real estate market at the time you sell will make this either an easy or difficult process. In a seller’s market (when demand exceeds supply), properties tend to sell quickly and at or above asking price. In a buyer’s market (when supply exceeds demand), properties usually take much longer to sell and may sell below asking price. Individuals in the military should consider this issue in determining whether to buy or rent real estate in the San Diego area.

For those who choose to buy, the major other consideration is the likely appreciation rate of your property during your tenure in San Diego. If you plan to sell your property before you depart to your next assignment, you should remember that there are expenses (e.g. realtor fees, taxes, etc.) associated with selling your house, and any price appreciation you realize by owing the property for a few years, may or may not be offset by these fees.

Some individuals choose to keep their property even after they transfer to a new assignment outside of San Diego. In these cases, you can rent out the property, leave it empty, or find another acceptable use of the dwelling. If you choose to hire a Property Manager to oversee the renting and maintenance of your property, keep in mind that the fess for this service will cut into any monthly profit you realize on the property.

GETTING A HOME LOAN?

If you decide to purchase a property, obtaining a home loan is one of the tasks you must undertake. Many active-day members, retirees and other service veterans are eligible for special loan programs guaranteed by the Veterans Administration (VA).

To be eligible for a VA guaranteed loan, you must have served on activity duty and have a discharge status of other than dishonorable after a minimum of 90 days of service during wartime, or a minimum of 181 continuous days during peacetime. There is a minimum 2-year service requirement for veterans who enlisted after September 7, 1980. The 2-year requirement also applies to Officers who began service after October 16, 1981. There is a minimum 6-year service requirement for National Guard members and Reservists, and surviving spouses are also eligible under some conditions. There are other special conditions in which a person may be eligible, so contact your local VA office to get more information.

WHAT IS VA GUARANTEED LOAN?

The VA loan is a federal guarantee of a maximum of 25% of a home loan amount but not to exceed $104,250. This formula allows eligible members to obtain a maximum loan amount of $417,000 (as of 2006). However, service members must meet other eligibility requirements. Individuals borrowing using this type of loan must intend to be occupants of the purchased property.

Private lenders are the source of funds for VA guaranteed loans. The guarantee provides these private lenders assurance that the federal government will reimburse the lender up to the maximum allowable amount if the borrower fails to repay the loan. Because of this guarantee, lenders are more favorable to offering loans without a requirement for a down payment.

VA CERTIFICATE OF ELIGIBILITY

Individuals desiring a VA guaranteed loan must first obtain a Certificate of Eligibility from the Veterans Administration (VA Form 26-1880). Contact your local VA office to obtain this form by calling 1-888-244-6711. You will need a copy of your military discharge document (DD-214) to submit with your application. Once you have the Eligibility Certificate, you can then select a lender or mortgage broker to work with on getting the loan.

CLOSING COSTS

In addition to the purchase price of your property, there are closing costs that must be paid to process your home loan. These closing costs are fees that are charged by different service providers to help complete the loan process. For example, your lender will require an appraisal of the property to make sure that its value is at or above your purchase price. Other charges commonly included in closing costs are: recording fees, credit report fee, prorated taxes and assessments, hazard insurance, flood insurance (if required), survey, title examination, title insurance, postage and shipping fees, and the VA Funding fee.

WHAT IS THE VA FUNDING FEE?

The VA charges a fee to individuals utilizing the VA guaranteed loan. This fee is a percentage of the loan amount and is linked to the size of your down payment on the home you plan to purchase.

For active-duty personnel or veterans who put no money down, the funding fee is 2.15% of the loan amount. This rate increases to 2.4% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment greater than zero but less than 10% of the loan amount, the fee is 1.5% of the loan. This rate increases to 1.75% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment of 10% or more of the loan amount, the fee is 1.25% of the loan. This rate increases to 1. 5% for National Guard/Reserve.

The rates listed above are for first time users of the VA loan guarantee program. Individuals who have used the VA guaranteed loan program before pay higher rates than first time users. The rates above are subject to change. In some limited cases, individuals are exempt from paying the funding fee. You should contact your local VA center for current information.

CHOOSING A VA LOAN VS. A CONVENTIONAL LOAN

You must carefully evaluate the terms of the VA guaranteed loan vs. the terms of a conventional loan. One advantage of a VA guaranteed loan is that many lenders will not require you to put a down payment on the purchase of the property, assuming you meet their other lending criteria (e.g. credit scores, sufficient income, adequate debt to income ratio, etc.). There are also many zero down payment conventional loan programs. In some cases, the VA guaranteed loan will offer a lower interest rate and better terms, and in other cases, you can obtain a better deal through conventional financing. A good loan officer can help you evaluate the advantages of either loan, given your particular situation.

FINDING THE RIGHT HOME

If you are familiar with the San Diego area, then you probably already know where you want to live. If you are less familiar with the communities in San Diego, your Realtor can serve as an excellent resource to answer your questions. There are many steps to take during the home search process, which include:

1. Work with your loan officer to identify how much you can afford.
2. Determine what type of property you want to buy (single-family home, townhouse, condominium, other). Your Realtor can advise you about the differences between these types of properties.
3. Determine how many bedrooms, bathrooms, square footage, etc. you need.
4. Determine what areas of San Diego you would consider living in.
5. Calculate the drive time (with and without traffic) to your job.
6. Identify the quality of schools in the neighborhoods that you are considering.
7. Locate the crime statistics for the neighborhood that you are considering.
8. Identify the location of local community resources such as libraries, shopping centers, athletic centers, etc.
9. Ask your Realtor to advise you about the resale potential of the home you are considering.

Although there are many other factors to consider, the above is a good starting point. Your Realtor should be able help you get answers to the questions above as well as provide you many other resources. Keep in mind that most Realtor’s who assist homebuyers and paid by the home seller, but make sure to ask your Realtor about this.

HOW MUCH SHOUD I PAY FOR A HOUSE?

Your Realtor should be an excellent source of information to help you understand a fair offer price. The Realtor should provide you information about what other similar properties in the same community have sold for recently, current pricing trends for the community, as well provide you a recommendation based on their experience in the local market.

DO I NEED A HOME INSPECTION?

There are many other issues besides the offer price to consider when making an offer. For example, many buyers find it advantageous to get an inspection of the property by a qualified inspector. The inspection typically covers the major systems of a property. Check out the National Association of Home Inspectors web site for more information about what is covered in a typical home inspection. Getting a home inspection is generally a good idea.

HOW LONG WILL THIS TAKE?

If you want to use the VA guarantee, then make sure you have obtained the Certificate of Eligibility far in advance of your relocation to San Diego. Whether or not you are using the VA loan program, be sure to obtain a loan pre-approval (sometimes called loan prequalification) from a lender or mortgage broker. This lets home sellers know that you are a serious buyer and are ready to act quickly if needed.

Prior to moving to San Diego, get a sense of the local real estate market. Your Realtor can set up an automatic email notification system that will send you descriptions and pictures of properties that meet your criteria. Doing this type of research should save you a lot of time when you arrive.

Once you have your loan pre-approval, the next step is to locate a property that meets your needs. Your Realtor should show you a variety of available properties that meet your criteria. Once you find a house you an interested in, your Realtor will prepare the purchase offer documents, and guide you through the loan and closing process.

In summary, it’s simply a process of getting a loan, finding a house that you like, making an offer that is accepted, and going through the closing process, which can occur in less than 30 days.

CONTACT A SAN DIEGO REALTOR

If you are moving to San Diego, contact a Real Estate agent who is familiar with VA guaranteed loans and has experience working with military buyers. Many agents have prior military service themselves, and are very familiar with your situation and needs.

If you are considering purchasing or selling a home, condo or any other type of real estate, you will most likely need the services of a real estate appraiser. An appraiser performs an assessment of properties and other types of real estate to help establish its value. While there are several methods appraisers use to establish the value of real estate (e.g. cost method, income method, and comparison method), for residential properties, the comparison method (also known as market value) is the most common approach. The appraiser’s job is to provide an opinion about the value of a property based on its “highest and best use.” If you are financing the purchase of a property, your lender will normally require an appraisal to make sure that the property is really worth the amount loaned.

The real estate appraiser is tasked with carrying out a completely objective assessment of a property and will normally provide a written evaluation report. This is accomplished by a physical inspection of the property, as well as a comparison to other similar properties for which the value is already established. To make a determination about value, the appraiser gathers details such as the size of a property, size of the lot, location, condition, best use of the property, amenities, etc.

After this initial inspection, the appraiser may scout the neighborhood to compare the property with other similar properties in the neighborhood by age, size, price range, etc. The appraiser then gathers additional data from several sources such as the local Multiple Listing Services (MLS), which provides information on current and recent comparable sales. The appraiser also gathers information from his/her own past experience in the local market. All of these sources of information are taken into consideration while writing the appraisal report, which will provide an estimate about the value of a property.

There are many reasons to use the services of a qualified appraiser. When purchasing real estate, an appraisal provides you with a negotiating tool and helps ensure that the price you are paying is appropriate. If you are selling your property, the appraisal will help you determine an appropriate price range. Besides real estate and mortgage transactions, you may need to order an appraisal to lower the tax burden (assuming the value is really lower than the value established by taxing authorities), to establish the replacement cost of insurance, to settle an estate, etc. An appraiser only gives an estimate of the value of the property. A real estate appraiser is not to be confused with a home inspector.

If you are considering buying or selling a home, condo or any other type of real estate, you can use the services of a qualified real estate appraiser who will provide an estimate of the fair market value of your property.

Most real estate purchases are bought with loans so getting a good faith estimate and pre-approval letter from your lender helps the process start off on the right foot. The good faith estimate, or GFE for short, is required by law to be provided by lenders when you are seeking a loan. It lists out the estimated closing costs, monthly payments, and interest rates for the loan program you are looking at getting. The pre-approval letter is provided by lenders once they have run your credit and get your income / debt information. By getting the GFE and pre-approval letter, you can be confident that the loan will get processed with no surprises. There are also additional benefits to getting pre-approval and GFE before you even begin the property search. For one, by discussing your debt to income ratio with your lender and obtaining the GFE, you can determine your maximum price. It helps to know the maximum sales price when shopping around so that you do not waste time and energy looking a over-priced properties, and also vice verse, you do not waste time and energy looking at under-priced properties. You can find an area in your price range that fits your needs and narrow down your search. You also will determine your monthly payments with the GFE. The monthly payments should include the property taxes, insurance, principle, and interest plus any private mortgage insurance (PMI). If the monthly payments are higher than you wanted, then you can adjust your sales price to be lower. Another reason to get your pre-approval and GFE before starting your home search is that you may find out some issues with your credit or financial situation that you could clean up before moving forward with a purchase. For example, the first time I bought a house, I found out that I had a $50 charge on my credit report from 3 years ago, which brought my credit score down. And with a lower credit score, I would have gotten a worse interest rate on the loan. I say ‘would have’ because I was able to pay off this collection and clear up the ding on my credit before going into the loan underwriting process. Finally, by getting a pre-approval letter, you have proof for a seller that a lender has confidence in being able to fund the purchase on your behalf. This helps with presenting offers and negotiating. Many sellers will not even accept an offer unless it is accompanied by a lender’s letter. Furthermore, if you do not have a letter, the seller may counter higher given that he feels he is taking on more risk that you may not be qualified for the loan amount. Also, if you happen to get into a multiple offer situation, your offer will be much stronger with a pre-approval letter.

When people call me, typically one of the first requests they make is for a house in a “nice” neighborhood. And this makes sense to want a neighborhood that is safe and enjoyable. But there are some benefits to buying real estate in the rough part of town or on the wrong side of the tracks. This article highlights some of them.

- There is less worry of your neighborhood going downhill because it is already downhill. Good neighborhoods can get bad and bad neighborhoods can get better. Since the price usually reflects the current condition, buying in a neighborhood that has room for improvement might be a good idea.

- If you are buying a rental, you usually get better cash flow in rough neighborhoods. If you are renting your property, there are more renters and they are more long term. It’s difficult to rent in good neighborhoods because fewer people are looking to rent and those who do are generally there short term while they look for a house to buy.

- You can look better in comparison to other landlords. Landlords in rough areas frequently don’t maintain their properties as well as people in nice areas. Therefore, if you maintain your properties, you can blow away your competition, and charge more for it.

- If you are in a rough neighborhood, you can propose that your property change will improve the neighborhood and you have a better chance of getting a different zoning. Conversely, if you are in a good neighborhood, it’s hard to make the same argument.

- You can buy more property. If you want to spend 500k, you can either buy one house in an upscale neighborhood or six or seven houses in a rougher neighborhood.

- They’re more recession proof. When the economy goes south, real estate in rough neighborhoods is less affected.

In summary, I am not saying you have to buy in a bad neighborhood. But simply that if you are looking for long term investments sometimes its a good idea to wander over the tracks and look around a bit.

When you start the process of buying a home or any type of real estate, you’ll no doubt hear the term “earnest money deposit” (EMD). So what exactly is an EMD?

An EMD becomes relevant when you are ready to make an offer on a property. In most states, your Real Estate Agent prepares the offer on your behalf. The offer usually takes the form of a written contract that is submitted to the seller by way of their agent.

In addition to the offer document, sellers typically expect an EMD. An EMD is a monetary deposit submitted via check to demonstrate to the seller that you are a serious buyer. In some regions of the country, only a photocopy of the check is submitted with the offer, and the original check is delivered to the appropriate entity if the offer is accepted. Ask your Real Estate Agent to clarify how deposits are handled in your region of the country.

The check is usually made out to an independent third- party such as a Title Company, Escrow Company, Real Estate Attorney or your Real Estate Broker. Ask your Real Estate Agent to clarify who will hold the EMD.

The amount of the EMD sellers expect varies by region. The EMD amount is based on the customs and practices for a region, but is generally from 1% to 2% of the purchase price. In a competitive market place where demand exceeds the supply of homes, some buyers may offer a higher EMD than expected to impress the seller of their intent. In determining the amount of your EMD, consult your Real Estate Agent and balance the need to demonstrate your serious intent, against the good business practice of minimizing the deposit amount.

The amount of the EMD is usually applied to reduce the purchase price of the property or to cover closing costs, as you dictate. For example, if you are purchasing a $300,000 property and you give an EMD of $3000, then the remaining balance owned at closing is $297,000 (plus closing costs). Alternatively, you may direct that the EMD be applied toward the closing costs.

Once a valid contract for purchase is created, an independent third-party usually holds the EMD until the purchase is either completed or cancelled. At this point, the money belongs jointly to both the seller and the buyer.

In cases where you make an offer that is accepted but later decide to cancel the offer, the terms specified in the contract (or state law) will dictate if, and under what circumstances, the EMD is returned to you. Be aware that you could loose your deposit if you do not not comply with the terms of your contract. Your Real Estate Agent can provide you information about how EMDs are dealt with if a contract is cancelled.

Since state law varies by region and practices can differ even within the same state, be sure to consult your Real Estate agent about the rules that apply to EMDs in your region of the country. You should also be aware that the EMD is not related to any down payment that you make toward your home loan.

The real estate market tends to be cyclical with some periods favoring buyers and other periods favoring sellers. As with other free markets, the pricing and availability of real estate is directly related to the forces of supply and demand. While many real estate markets in the United States are experiencing a substantial slowdown, other markets remain robust, and some even continue to grow. What makes the situation even more complicated is that even within a particular city or county, there may be some areas that are hot and others that are cold.

In regions of the country in which the real estate market is slowing, there are some things homebuyers can do to increase their chance of getting the property that they want on terms that are favorable. Below are some strategies to consider:

1. Clarify What You Want. Be sure to understand what kind of property you want (e.g. bedrooms, bathrooms, size, yard, location, etc.). Identify items that you “must have” and items that you would be willing to forego if your other priorities were met.

2. Consult Experts. You’ve no doubt heard the saying that “all real estate is local,” so arm yourself with the best information available. Consult a local real estate expert who can guide you about what communities are hot and which ones are not. Obviously, you are more likely to find deals in communities that have excess supply and limited demand than vice versa.

3. Understand Market Data. Obtaining and evaluating data can be one of the most powerful tools in your arsenal. Identify communities that you find desirable and ask your real estate agent to provide you relevant sales statistics. For example, your agent can provide you:

a. A summary of how many properties are available in communities that you deem desirable.

b. How long properties are taking to sell this month, last month, last quarter, last year, etc.

c. How many properties have sold this month, last month, last quarter, last year, etc.

d. Changes in the median and average price of properties for a community this month, last month, last quarter, last year, etc.

e. Data on the sales price to list price ratio (SP: LP). This ratio provides information about how much, on average, sellers are reducing their price.

f. Detailed data on properties that are similar to the type of property you desire (often known as “comparables” or “comps”).

4. High Inventory Communities. Identify, or ask your agent to identify, communities that appear to be particularly slow, and that have an unusually large inventory of homes. You will have a broader variety of options in these communities, and you may increase the likelihood of finding a better deal.

5. Loan Pre-Approval. Be sure to consult with your bank or mortgage broker and obtain a loan pre-approval document. This not only let’s you know how much you can afford, but it also demonstrates to sellers that you are a serious buyer and that your offer is worthy of serious consideration.

6. Seller’s Motivation. While information about why a seller is selling is usually confidential, there are situations in which the seller will allow their agent to disclose important factors regarding their personal situation. Be sure to ask your agent to inquire about any information that the seller has disclosed to his/her agent that can be conveyed to your agent. This information may help you decide on making an offer on a property and the price you wish to offer.

7. Home Inspection. A home inspection conducted by a qualified inspector can provide you valuable information about the condition of a property. Moreover, if there are items that need repair or replacement, you can use this information to modify your offer price or terms.

8. Expand Search Scope. As mentioned above, even within a particular city or county, there may be some areas that are hot and others that are not. Be sure to provided detailed information about what you want to your agent, so that he/she can provide you a variety of community options.

9. Be Patient. Time is on your side when there is excess supply and insufficient demand. Try not to “fall in love” with a house so much that you cannot be objective. It may be that multiple offers and counter-offers occur before you either get the property you want or decide to walk way from a deal. You may also want to look at more properties than you normally would, so that you are exposed to a variety of options.

While the above is not an exhaustive list of strategies, it is a good starting point of issues to consider when buying real estate, particularly in a market that favors buyers. Obtain the services of a knowledgeable Real Estate agent who can provide you with additional strategies to help you reach your real estate objectives.

Buying property is always a stressful process and can be even more so when purchasing in a foreign country. However, Belize is part of the British Commonwealth with a legal system that shares the same British common law as does Canada and the United States. However, there are five basic things that every buyer must know before they begin that process of buying their dream property in Belize:

1.  A foreigner can own property outright in Belize and has the same rights as a Belizean citizen to freehold property ownership. Since the Alien Landholding Act was abolished in 2001 there are no licenses, permits, special permissions or conditions needed for a foreigner to take title to freehold land in Belize.

2.  It is always advisable to have professional legal advice when purchasing property although you will often be told the opposite. There are experienced and reputable paralegals who will be familiar with the title history of local properties and they can often finalize a purchase. However, there can be important issues concerning how best to take title which can impact your closing costs and potentially impact how you sell your property. Don’t take any risks, obtain qualified local, legal representation.

3.  Title insurance is very prevalent in the US and increasingly so in Canada but is not so common in Belize. However, Belize is one of the few Central American countries that in fact does offer title insurance through one of the major American providers, Stewart Title. It is important to note that the Government of Belize guarantees most Belizean titles while your local lawyer can provide a title opinion which makes property purchase as secure regarding your title as in the USA and Canada.

4.  Closing costs in Belize are very straight forward. Since there is no capital gains tax associated with the purchase and sale of real estate, the Government assesses a 5% stamp tax on the declared purchase price of the property at the time of transfer of title. However, there is an additional tax of 5% for foreigners and persons who have resided in Belize for less than 3 years. It is important to fully review and understand your options prior to completing the sale to insure you take title to your Belizean property that best serves your particular circumstances. Closing fees to your lawyer or paralegal should be budgeted at a minimum of $500 – $1500.

5.  Local financing, although available, would not be a recommended course of action. The majority of foreign property transactions is either cash or otherwise financed offshore. Belizean interest rates are typically much higher than you will be used to in your home markets with fixed terms of only twelve months and only issued in Belizean dollars. At the end of every year the loan is closed out and then renewed at the current interest rate. A more reasonable alternative may be to borrow through an offshore banking institution and, as always,  professional advice is very important.

Common sense needs to prevail when contemplating buying property in any foreign jurisdiction and that should begin by retaining an advisor who is on your side and not compromised by acting for the seller as well. Begin by following the above five factors and you will go a long way to making this an exciting and joyful experience.

The reality of buying property in Barbados is simple: you will need some legal representation. Purchasing property anywhere, local or otherwise it is always smart to get some legal advice. Buying property in Barbados has a fairly set structure and follows a specific series of steps that ensure that the sale is taken care of legally and in good faith. Let’s have a look at the different steps and how they are completed.

Agreement For Sale – This is the first step that occurs after negotiations have come to a close. This agreement is prepared by the seller’s legal representation, signed in duplicate by the buyer and delivered to the sellers representative along with the deposit. The whole package is then sent back to the buyers legal representative and this step is concluded.

Investigation Of Title – Much like any other area, home sales in Barbados have to clear title before the transaction is complete. This search is typically done by the buyers attorney to ensure that the seller has clear and valid title to the property and that there are no encumbrances, liens, or judgments against the property that could affect the smooth transfer of ownership.

Completion Of Sale & Purchase – Once title has been cleared the seller’s representation then prepares the means of conveyance (usually a mortgage) as well as the previous titles.

Closing Costs – There are a variety of closing costs involved in the sale and purchase of a Barbados home. Sellers are responsible for the stamp duty and property tax. The taxes are respectively 1% of the consideration for the sale and 2.5% in the case of land without any buildings and 2.5% on the amount by which the greater of the consideration paid or value of the land exceeds $125,000.

Retaining Legal Advice & Council – This is a required step in purchasing property in Barbados. There are several aspects of the purchase or sale process that can only be dealt with by a proper legal representative. There are several areas of concern for first time Barbados buyers such as absence of title insurance, the great amount of unregistered property, and some particular conveyance laws make legal assistance a necessity.

Legal Fees – Legal fees are largely dependent on the value of the home being purchased, as defined by the Barbados Legal Profession Rules, 1997. As well, the minimum scale fee may be adjusted by an attorney to reflect their years of experience and the intricacy of the transaction. There is also a 15% value added tax that is payable upon the attorney’s fees.

Financing – Financing is a different story in Barbados as in-country financing is available only to Barbadian nationals. If you are a non-national who is thinking about buying a property in Barbados, then funding must be secured out-of-country. Essentially all foreign financing must be overseas or arranged through overseas institutions.

Keep in mind that purchasing overseas will be quite different than purchasing a home in your own country. There are different processes and laws that apply to real estate and you should be sure that you understand them all before jumping into a purchase. When considering a home in Barbados it is essential that you get legal representation and tax advice long before you start signing papers.

Buying Caribbean Property is not as simple as walking into your travel agent’s office and ordering a ticket to the Caribbean. There is actually more to buying Caribbean property than meets the eye. What gives?

Take buying Barbados Real Estate for instance. You may be surprised to find out that you cannot pursue full-time formal work while you are on any Caribbean Island. This means that over 7,000 islands in the Caribbean region permit foreigners to buy property, stay for a certain period of time, but few will allow you to work while you are there. On the Bahamas however, you can get a homeowner’s permit so you can legally stay on your property but you are not permitted to work. On the other hand, the Calcos and the Turks will grant a foreigner a visa good for five years provided he can do work that an island national cannot perform.

Buying Caribbean Property has become easier anyway because the Caribbean islands local government leaders have opened up their territories for investment by foreign nationals. If you are buying property in Barbados, then you have to register first with the Central Bank of Barbados as your legal adherence to the existing rules and regulation in the place. You can expect to pay from 1% to 2.5% in legal fees when buying Barbados Real Estate.

Buying Property in Barbados can be quite costly though, so it is not for the faint-hearted or a weak wallet buyer. For instance, buying Property in Barbados’ Sugar Hill area may cost you $293,000 if you are buying a one-bedroom apartment. If you want a fancy a 3-bedroom house with 2 bathrooms, completely enclosed gardens, and a grand view of the nearby coastline, be prepared to shell out a total of $750,000. And for the ones who really have the moolah, a five-bedroom property beside the beach will run to as much as $7,750,000 total.

Buying Caribbean Property really has great perks that could motivate you to purchase your own someday. You can enjoy pretty comfortable weather, climate and temperatures year-round here. Sunshine practically never ends, the beaches are clean and sandy, and the scenery all around you may convince you never to leave (or at least keep extending your vacation until your boss rings you up frantically on your mobile phone wondering if you are ever coming back to work). While it’s fascinating to stay in the Caribbeans, it’s important to consider the weather too. Watch out for possible heavy rains or tornadoes when purchasing the best estate in the islands.

If you have started researching about buying Barbados Real Estate or simply just buying Caribbean Property, you may want to look beyond just your options on Barbados and start examining the other Caribbean islands as well for alternative options. In some places, you may find condos which are priced from $350,000 (such as those in Bermuda). Some Caribbean islands may also place some kind of restriction on purchases by foreigners, like maybe barring foreigners from owning properties like condos so you need to double check this if it applies to your case.