Whether you’re contemplating property ownership in the caribbean island of Barbados as a foreign investor, or if you’re a Barbadian citizen purchasing your first investment property for the first time, the government of Barbados genarally doesnt place any restrictions on foreign ownership, and extends a warm welcome to all.
Barbados, with its unparalleled beauty, entices both nationals and non-nationals to become property owners, attracting overseas investors looking for a second home or rental income, families and couples wanting to work remoting in the comfort of a beach front office, and retirees, all from around the globe.
Barbados offers more than just property ownership; the government takes an extra step by providing various options for permanent residency, allowing you to fully embrace the beautiful beaches and island’s lifestyle 24/7.
With the help of a real estate agent from Rock Real Estate, we can guide you through a diverse range of investment properties, whether you desire the glamour of the platinum west coast, the vibrant family-friendly atmosphere of the south coast, or the serene and cooler climate of the rugged east coast
1. Taking the First Step: MAKING AN OFFER
A professional real estate agent is key when navigating the Barbados property market, they will ensure you are buying a good investment.
Once you decide on your dream property in Barbados, you the buyer will submit an offer. This will be via email, or at this stage may just be a verbal offer. Your real estate agent will then forward it to the seller.
The seller may reject, accept, or counter your offer with a different price. It is always best to take advice from your real estaste agent before making an offer so they can take you through any expectations that both you and the buyer may have. Some sellers are set on their asking price, whereas others sellers may be happy to take a reduction for a quick sale.
2. The Journey Begins: OFFER AND ACCEPTANCE
When both parties reach and agreement on the sale price, your real estate agents draws up an Offer and Acceptance form. Though not legally binding, signing this form marks the first steps in your Barbados Property Adventure.
At this stage the seller will usually agree to remove the property from the market and not allow any further viewings, as long as the buyer agrees that they will proceed with the first contract within a specified time frame.
From signing the Offer and Acceptance form to signing the first legal document, known as the sales agreement, is usually approximately 4 weeks. If the property is a new construction on a new developement it may be sooner.
3. Assembling Your Team: APPOINTING AN ATTORNEY AT LAW
Now is the time to seek the services of an attorney-at-law. Most real estate agents will have a list of trusted attorneys that they can recommend, althouth there is nothing to stop you doing your own reaseach, or going on a recommendation from someone else.
Once decided, both the buyer and the seller appoint an attorney to act on their behalf. The real estate agent sends an introductory letter to both attorney’s, detailing information about the buyer, the seller, the property, and the agreed purchase price.
Remenber to ask the attorney, before they start work, for a break down of the estimated costs. At this stage the legal fees are usually accurate, as the majority of the costs are based on the purchase price of the property. The fees are usually 1.5-2% (plus vat) of the purchase price.
4. Crafting the Blueprint: DRAFTING THE AGREEMENT FOR SALE
The sellers attorney prepares a draft Agreement for Sale, which the buyers attorney reviews. This document outlines the details of the sale. The attorney also verifies that the seller has the title deeds in their possession, and that they have legal ownership.
The attorney will also establish if there is any money owed on the property, usually in the form of a mortgage or loan, and if there are other parties that have legal interest in the property. Once this has all been done it will be time to move on the the next step to start the legally binding process.
5. Inspecting Your Treasure: PROPERTY INSPECTION
Before signing the Agreement for Sale, the buyer should ensure a comprehensive property inspection has been conducted. A further home inspection from a qualified professional may identify issues that weren’t spotted at the intial viewing.
Although the property may still be your dream home, if there are any defeats that were not identified during the first viewing, this would be the time to now negotiate on price.
At the very least any defeats will help prepare you for any long term maintainance planning. This is because if any issues arise after signing and paying the deposit, you may lose your payment if you choose to terminate the agreement
6. Sealing the Deal: SIGNING THE AGREEMENT FOR SALE AND INSURING YOUR PROPERTY
If the buyer is signing the Agreement for Sale outside of Barbados, a Notary Public must witness the signature. The buyer then sends the signed document and their deposit to their attorney. When sending the sale agreement from overseas, it is essential to send the document via a fast track postal recorded service such as Fedex or DHL. Sending by the usual postal services will not be adequate, as once it leaves the country of origin it is no longer traced.
Once the attorney receives the Agreement for Sale and the deposit, they are then forwarded to the sellers attorney for signing. The deposit is held in an escrow account until completetion. The deposit amount is 10% of the agreed purchase price. If the deposit is coming from a financial institution, such as a mortgage, then the deposit will be paid directly from that institution. Once the seller signs and returns the Agreement, the sale becomes legally binding for both parties.
Upon the signing of the Agreement for Sale the buyer becomes responsible for the insurance of the property. There are numerous insurance options in Barbados and it is important to carry out your due diligence and request various quotes. The insurance price should be based on the value of the property, so the purchase price will give you a fairly accurate estimate. If the property is in an apartment or in a gated community, then the insurance might be already included in the service charge. If this is the case you possibily wont pay anything towards th cost until completetion.
7. Ensuring a Smooth Transfer: CONVEYANCE
During the next few months, the sellers attorney performs all the necessary domestic conveyance of the property that includes more indepth checks and searches to ensure that no mortgages or judgements exist on the property.
Any outstanding balances must be settled before completion. This not only includes outstanding mortgages and judgements but it also included all utilities and land tax payments. Meanwhile the sellers attorney sends a draft conveyance to the buyers attorney for review and finalisation.
8. Marking Your Territory: LAND SURVEY
The seller of the property will arrange and pay for a land surveyor to mark out the property boundaries. These markings are shown to the buyer or their representative usually a week or two before completion. Any boundary issues or encroachements should have been rectified prior to this appointment but if they havent it is a final opportunity to resolve any final queries.
9. Securing Your Funds: TRANSFERRING AND REGISTERING MONEY
If the buyer is transferring funds from outside of Barbados, they must transfer their money to their attorney approximately two weeks before the closing of the sale.
During this process the attorney will apply to the Central Bank of Barbados to gain permission to allow the purchaser to buy a property in Barbados.
After approval is obtained the money is registered: when foreign currency is bought into Barbados it must be registered with the Central Bank.
This process ensures a smooth transaction, should you want to sale the property and remove the funds from Barbados in the future.
10. The Grand Finale: COMPLETION
Both the buyer and the sellers attorney arrange for their client to sign the conveyance. This follows the same process as the Agreement for Sale. Upon completetion the balance of the purchase price is paid. The buyers attorney receives the fully signed conveyance, title deeds, and obtains the keys for the property. The seller’s attorney receives the remaining funds for the purchase of the property.
11. Post Completion: RECORDING AND RECEIVING DOCUMENTS
After completion the buyers attorney records the conveyance and the Barbados Land Registry. The purchaser then receives all the paperwork, including the property deeds. At this point it would be a sensible decision to discuss with your attorney having a Will written up and registered.
We hope you found this guide useful. If you are ready to take the next step and explore your property options in Barbados further, we encourage you to schedule a free consultation with us! As you embark on your journey to explore the Barbadian real estate landscape, we want to ensure you have access to the best resources and services to make your property dreams a reality.
We understand that the path to finding your dream property often requires professional guidance. Whether you’re looking to buy, sell, or invest in Barbadian real estate, we are experienced professionals, committed to providing you with personalised assistance and local expertise.
So, as you delve into the world of Barbados property through our informative articles and resources, remember that we are here to offer you the professional real estate services you may require. If you have any questions, need guidance, or are ready to take the next step in your property journey, don’t hesitate to reach out.
