BUYING REAL ESTATE

Navigating the process

BUYING A property is one of the greatest investments you will make. However, the buying process can seem confusing. The steps below are intended to help you successfully navigate the buying process with the help of the NHT.

1. Determine if you are financially ready

Get an eligibility letter from the NHT. This letter will tell you how much the NHT is willing to lend you, the interest rate to be applied and an estimate of your future mortgage payments.

You can combine your NHT benefits with loans from some commercial banks and building societies, so ask your mortgage financing institution about the NHT’s Joint Finance Programme.

Along with the cost of the property, there are other costs that you will need to cover out of your personal funds.

THE DEPOSIT

This could range between five per cent to 10 per cent of the cost of the property. You will need to pay this to the vendor once your offer has been accepted and you have vetted and accepted the sales agreement.

SURVEYOR AND VALUATOR FEES

You will be required to provide a surveyor and valuator report to your mortgage financing institution when submitting your loan application. The fees are paid to the person(s) you have contracted.

CLOSING COSTS

The closing cost is an accumulation of the registration, stamp duty and legal fees. Generally, these fees are about 13 per cent of the cost of the property.

If you have a challenge covering any of the above fees, ask the NHT about Contributions Refund Toward Deposit (CRTD), a facility which gives you access to your contributions, that are not yet due for refund, to assist with payment.

2. Have an idea of where you want to live

Having established how much you can afford, determine where you want to live. Use the eligibility letter to guide your decision. Tour communities you are interested in to get a feel for the area. Consider the surroundings, available infrastructure and amenities along with the areas resale potential. Aim for somewhere you can see yourself building a life. Remember, dream homes are created over time.

3. Consider using a realtor

A reliable realtor can make the world of difference in locating a suitable property. A realtor will provide listings of properties that meet your requirements and help you craft an offer once you have identified a suitable property. Best of all you do not pay the realtor. Realtors are paid by the vendor.

4. Find a property, make an offer

Once you have identified a property you like, make an offer. Once your offer has been accepted you will be required to pay the deposit.

5. Engage a lawyer to represent

The vendor will have an attorney to protect his/her interests, hire one to protect yours. An experienced attorney will ensure that you are signing a fair agreement. They will conduct any negotiation or follow-up on your behalf and ensure that all documents received from the vendor’s attorney are accurate.

6. Review your agreement

A draft sales agreement will be sent to your attorney. Carefully review this document with your lawyer. Seek clarification for anything that you do not understand.

7. Submit your loan application

Once the agreement has been signed by both parties and the deposit paid, complete and submit your loan application with supporting documents. The signed sales agreement, purchaser’s statement of accounts, copy of the registered title, utility letters and up-to-date property tax receipt will be sent to you by the vendor’s attorney.

Remember, loan application requirements vary for institutions.

For the NHT checklist visit www.nht.gov.jm.

8. Almost there ...

While your attorney navigates the legal aspect of your purchase the NHT or the mortgage financing institution of your choice will deal with the mortgage arrangements.

9. Just a bit more ...

All being well, legal loose ends having been tied up, including the transfer of the purchase price balance to the vendor, you will receive a final set of documents from the vendor’s attorney. These documents will include letter of possession, property tax certificate and letters to utility companies.

10. Let the excitement begin!

Voila, you are now a property owner. Begin making plans for the amazing journey of creating your dream home.