It is a fact that property
prices in Freeport have gone down over the last 2 years but this downward
trend seems to have stabilized. If you look statistically at the
actual transactions of what property sells for, not what the property
is listed for you will see that there has been a correction in the market
even if the property list prices have not reflected it yet. I can assure
you that buyers who are making aggressive offers are getting noticed
and there are many sellers that are tired of waiting for their property
to sell and willing to negotiate on the price to reflect realistic current
The good news is that if you are a buyer
then 2010 is a great time to buy , but the trick is in the successful
contract negotiations. There are motivated sellers in this buyers market
but selling price for a home or investment property is only one factor
in determining whether the buyer and seller reach an agreement.
The sales contract (Purchase/Sale Agreement) has many facets that must
be considered, understood and accepted by all. An experienced
broker is a solid advantage to both buyer and seller, because they have
been through countless transactions and understand the principles of
successful negotiations. At James Sarles Realty we have seen deals fall
apart over very minor, petty issues and we have saved deals where parties
have walked away from the closing table. We don’t look at deal as
done until the checks clear, you have keys in your hand and you move
into the house.
The issue of price or consideration
in your deal is only one aspect of the finances. The contract should
specify who pays for stamp tax, legal fees, and real estate fees.
A typical gross offer or list price that you may see advertised implies
that stamp tax which ranges from 2% to 10% depending on price is customarily
split between buyer and seller, each party pays for their own attorney
fees which is approximately 2.5% each side and the seller pays for the
real estate fees of 6% to 10%. BREA ( Bahamas Real Estate Association
standards for “The Out Islands” are 8% for developed property and
10% for land though many brokers charge 6% to reflect Nassau and US
HOWEVER, any of these costs can be negotiated with either
party paying any of the fees as the closing costs are NOT mandated by
law. It’s real estate and it’s negotiable as long as it is
clearly stated. Sometimes the purchaser makes a net offer which
means that the seller receives whatever is offered and the purchaser
agrees to pay ALL closing costs including ALL legal fees for both parties,
ALL real estate fees, and ALL Government Stamp Tax. In a net deal the
percentages of the legal fees, the real estate fees and the government
stamp tax are based on the Net price. This is frowned upon by Bahamas
Real Estate Association but it does go on.
An important clause that is
left out of many contracts is who pays for conversion fees. If a
foreigner is purchasing property from a Bahamian or if a Bahamian is
purchasing from a foreigner there is a conversion charge from US dollars
to Bahamian dollars (.995) or Bahamian Dollars to US (1.0125) as Bahamians
can’t accept or hold US dollars based on Exchange Control Regulations.
There is no hard and fast rule of who should pay for these charges.
They can be paid by either party or split but MAKE SURE IT IS CLEAR
WHO WILL PAY WHEN YOUR ARE NEGOTIATING THE DEAL!
If you have been thinking about
getting in the market in 2010 this may be your opportunity to buy that
property at a good price with sellers who are motivated which could
be a win win for all parties.
Good Luck with your negotiations.
Until next week.
Contact James at
Coldwell Banker - James Sarles Realty