Important points to note when purchasing real estate
Good day, readers. This week we have a guest writer gracing our column inches. Joan Latty joins us for a second time and today she will share several points to keep in mind when conducting a real-estate deal also the fees that you need to remember and keep in mind. This will help when you are thinking of, or ready to purchase property to make you aware of certain requirements and fees.
So you have finally decided to purchase a property to reside, or you may be adding another property to your real estate portfolio. Whatever the case, acquiring a property is a great achievement and may be your single largest investment.
As a purchaser, it is advisable to use a licensed realtor from a licensed real estate brokerage company. You are advised to ask your realtor for his/her real estate licence, in order to ensure that the licence is current and that the realtor is a practising professional.
Usually, there are no fees payable by the purchaser for this service, but in some instances, you may contract the services of a realtor and compensate him/her based on agreed terms. In Jamaica, the realtors' fees are paid by sellers/owners, so when you are thinking of selling the property you have purchased, you will have to consider those fees as well.
Discuss your needs with your realtor. These may include your 'must-haves', budget, amenities, style, type, community and all other inputs which are essential for you to create the space you require.
In addition to the purchase price, there are a number of other charges that you will have to consider which may account for another 10 per cent added on to the purchase price. Your realtor needs to, as a part of the service, assist you in realising and understanding those other costs, which include but are not limited to:
n Stamp Duty - 2%
n Registration Fee - 0.25%
n Valuation Report - 0.3%
n Surveyors ID Report - 0.3%
n Attorneys Fee - 3%
n Cost to Prepare Sale Agreement - $40,000-$50,000
n Mortgage Processing Fees - 3%
The deposit, which is not an additional charge but forms part of the purchase price, represents between 10 and 15 per cent of that amount.
For example, a property being purchased for $10 million would require a deposit of $1 to $1.5 million. The sales-related costs are calculated as a percentage of the purchase price. With the exception of the stamp duty, registration and to a lesser extent mortgage costs, these charges can be negotiated and are subject to general consumption tax paid at the prevailing rate.
Once the purchase is completed, you now have to think about the monthly mortgage payments, maintenance and repairs of the property, homeowner's insurance and property taxes. These will be ongoing during the period of ownership.
Keep sending your questions and comments and let's continue to explore A Matter Land. Until next time, traverse well.
n Craig Francis is a commissioned land surveyor and
managing director of Precision Surveying Services Ltd. He can be contacted for questions or queries at firstname.lastname@example.org or his Facebook page Precision Surveying Services