Tips for first-time Jamaican home buyers
Featured image from iStock photography
Planning on buying a home?
No worries, attorney-at-law Carissa Mears has put together a checklist to get you started on your journey to home ownership.
Step 1: Know your budget
Ask yourself, how much am I able to spend on my purchase? Your decision will be influenced by how much money you have saved up and any ongoing or future expenses.
It is important to determine your budget so that you do not waste time viewing properties that far exceed your budget or on the other end of the spectrum, you miss out on considering properties for which you could obtain a mortgage.
Stock image from iStock
A great tip is to utilize the mortgage calculators found on the websites of many banks and real estate agencies. This tool can give you a fairly good idea of what your estimated budget should be.
It is also important to note that the cost of purchasing real estate includes not only the price of the property, commonly referred to as the purchase price, but also closing costs.
Closing cost refers to fees associated with the purchase. Some of these fees may include; stamp duty, registration fee and attorneys fees. The seller will pay fees to a realtor if he or she has utilized one. The seller will also pay transfer tax.
Tip: Remember to always bear in mind your income, savings and investments as well as all expenses.
Step 2: Get pre-qualified
If you are serious about purchasing and you will be taking out a mortgage, get pre-qualified.
At this time you'll know exactly how much you can afford to spend. The bank will take into consideration your income and expenditure among other things in determining just how much cash they are willing to lend you. When you have found a property to purchase, it makes a huge difference to a seller who is considering multiple offers. Think about why would he/she choose a buyer with only word of mouth for an assurance that he/she can pay over you who is pre-qualified by the bank ? It's a no brainer. You may even be able to negotiate a better deal.
Additionally, you'll save time by looking at the right home and move through the home buying process with confidence !
You should have your deposit saved because many financial institutions may not be willing to lend you money for your down payment.
Step 3: Shortlist some ideal areas in which you would like to live
Now that you have established your budget and the amount of money that you are able to spend, start researching areas. Many of you might have begun this process when you first began to dream of your first home but now that you have the specifics on just how much you can spend, zoom in on those that fit the budget. Also consider the area's proximity to your place of employment, schools, hospitals and services which you consider essential. It’s a major decision you're embarking on so do your research.
Step 4: Start your property search
Now it’s time to search for your new home. An easy place to start is online. Real estate agents and brokers have listings available at your fingertips just one google search away.
You can also browse the National Housing Trust's (NHT) website to see what housing solutions are currently available and what they have "in the pipeline". Remember NHT now offers what it describes as 100 per cent financing on units built by them, so therefore, if you are a qualified contributor you may have greater access to funding. Please contact the NHT directly for guidance on this facility.
In addition to your online search, feel free to call an agent and drive around your shortlisted neighborhoods and look for those for sale signs. The search may be short for some and longer for others. There is no one size fits all. Consider all the amenities you will need. Do you want a house, townhouse or apartment? Think carefully about the home that you will choose.
Step 5: Inspect the property
So you've reached the stage where you have selected your property, awesome! Ensure that before moving forward you do a proper inspection to ensure that you are satisfied of its condition. Be observant. Are there any squatters or tenants? Is there any disrepair significant or insignificant?
If you are buying into a development, do they have the proper permits? Do you know exactly where the development will be located? Take a drive pass the prospective site. At the stage when you contact your attorney, they will assist you with the necessary checks.
Step 6: Contact an attorney
Working with an attorney is an important step in your journey. This professional will ensure that your purchase runs as smoothly as possible.
You may encounter many difficulties if a proper investigation is not done or if proper searches or enquires are not made. For example:
a. You may pay over money to the wrong person
b. You may enter into an agreement with someone who does not in fact own the property or who owns the property but is only one of many owners and does not have the others' permission to sell
c. You may purchase a property burdened with expenses that "run with the land" which you may now be liable for
d. The last example I will give is that you may purchase a property and years later have no title to prove your ownership
These are just a few difficulties that you may run into without proper assistance.
Tip 7: Get your deposit ready and sign your agreement for sale
After you have consulted with your attorney and she/he advises you to press ahead, get your deposit ready and sign your agreement for sale which your attorney would have advised you on. This document outlines what is to be done by the seller and purchaser, and details specific timelines.
Step 8: Finalize your mortgage
With your sale agreement in hand, you will now finalize your mortgage. Your attorney will provide you with the documents needed. After you are approved, the seller's attorney as well as the purchaser's will ensure that the stipulations in the sale agreement are met within the specified timeline. This time frame varies from 90 days to over 180 days depending on the complexity of the transfer. After the technicalities are formalized, you will have a title bearing your name which is proof of your ownership.
Step 9: Move into your new home
That's the end folks. Now that you're wiser about the process, share these tips with others.
Happy house hunting!
About the author: Carissa Mears is an Attorney-at-law and Vice-Chairman of the Board of Governors of the St Catherine Primary School. She is passionate about making legal issues understandable to the general public.
*This article does not constitute legal advice and is intended for informational purposes only.