IMPORTANT INFORMATION FOR BUYERS
Buying a home should be an exciting adventure. Here are some useful Q&A’s to help you navigate through the often confusing buying process, some of which are unique to Bermuda (just click any of the titles below to show the answer):
Preparing To Buy
STEP 1 – Pre-Approval
Your first step in purchasing a property is to get pre-approved by a lending institution (currently banks do not charge a fee for this and the pre-approval is typically for 3 months). This will not only establish what you can afford to purchase, but most vendors will not accept any offer without proof of funds and new AML Compliance requires proof of funds.
STEP 2 – Preparing for Bank Meeting
Prior to your meeting with the bank, you will need to complete a mortgage application form. The application will outline the particulars required and ask you to bring these items to your first meeting, i.e. salary verification, passport, employment letter, etc.
What Can You Afford
The banks are very competitive these days with current interest rates listed online. When taking into consideration what the bank will loan you, they use a debt service ratio of 45% to a maximum of 55%. This means the bank does not want fixed expenses to exceed 55% of your net monthly income.
Bank of Butterfield: 298-4799
Clarien Bank: 296-6969
STEP 3 – Closing Costs
Your agent can provide you with estimated closing costs including mortgage fees, stamp duty and legal fees. You must also have proof of a homeowner’s insurance policy in place to receive a mortgage (unless you are purchasing vacant land or a condominium).
We highly suggest that you get a written estimate of closing cost from your banker AND your attorney BEFORE you engage the attorney as there are many additional costs that your agent will not be privy to.
If you have any questions about preparing to purchase or mortgages, just send an email to: email@example.com
What You Should Know About Offers
You’ve Made An Offer… Now What?
So you’ve made an offer on a property and you are anxiously awaiting a reply. What should you expect?
Your agent should have explained to you from the outset that all Real Estate Representatives in Bermuda have a fiduciary duty to the Vendor to present all offers and get the best price possible for the property. In other words, we (the realtors) work for and get paid by the Seller or Vendor*.
Typically, the Seller will make a decision within a few days as to whether or not they will accept your offer. In fact, they may accept, reject or come back with a counter-offer.
Once your offer is accepted, you have a number of things that must be done prior to the property being removed from the market. Unless the ENTIRE list of below items is completed, the property will continue to be shown, advertised and offers encouraged in accordance with established legal practices and contract law.
- Remit a Ten percent (10%) deposit
- Your attorney approves the Sales and Purchase Agreement with agreed conditions
- The Vendor’s attorney does the same
- Once the Sales and Purchase Agreement is agreed by all, it is signed in triplicate by the Purchaser followed by the Vendor and Agency
- Copies are stamped by Coldwell Banker Bermuda Realty
- One copy is distributed to the Purchaser’s attorney, one to the Vendor’s attorney and one is retained by the Agency
Until such time as ALL the above is completed, the Vendor has the right to accept any other offer or rescind his acceptance.
Only after the deposit is received and ALL parties have signed the agreement is it a legal and binding contract.
It is important to be aware that because the Realtor is in a contractual relationship with the Vendor, the Agent is REQUIRED to present ALL offers to the Vendor even if the Vendor has already accepted another offer.
If you have any questions about making offers or being represented by a Buyer’s Agent, just contact the agent directly.
* There are rare cases where the Realtor will enter into an agreement to represent the Buyer. This is called a Buyer’s Agency and the Buyer is then responsible for the commission.
Who Does The Broker Represent?
The Seller Only
Under a listing agreement or other agreement with the seller, the Agency and its Sales Associates act as the Agent or Sub-agent of the seller. They owe their fiduciary duties to the seller only. Where an Agent who is representing the seller has listed the property with another Agent, that Agent is called a Co-broking Agent.
The Buyer Only
The Agent represents the buyer, only if the buyer pays all or part of the Agent’s commission. The Agent owe their fiduciary duties to the buyer only.
The Seller and the Buyer
The Agent is the Agent of both parties. This arrangement is called dual agency. The Agent should only act as a dual agent if both the seller and buyer consent. The Agent is obligated to treat both parties honestly and impartially and to work so as to not favor one party or disadvantage any party.
When you enter into discussions with a real estate Agent regarding a real estate transaction, you should know whom the Agent will be representing in that transaction. All real estate Agents should promptly disclose their agency relationship to each actual or prospective party to a transaction. This disclosure will help you understand the choices that you can make regarding agency relationships.
The Agent’s Duties
A real estate Agent normally will enter into an agreement to represent and act as the “Agent” for its client. Where an agency relationship exists, the Agent owe a “fiduciary duty” of loyalty, obedience, confidentiality, advice and reasonable care to the client. No real estate agent has any authority to make or give any warranty in relation to a property. Regardless of which party the Agent is representing, the Agent and Their sales associates are required to treat all parties honestly and to deal in good faith. Agents must promptly present all offers, respond truthfully to questions concerning the property and offer their services without discrimination.
There are two situations where Dual Agency occurs:
- The Sales Associate is acting as the Listing Agent & the Selling Agent for both buyer and seller.
- Two Sales Associates from the same company; one acting as the Listing Agent whilst the other is acting as the Selling Agent. Should parties agree to Dual Agency where the Listing Agent is not the same person as the selling agent, the Listing Agent will be deemed to be representing the seller only and the selling agent will be deemed to be representing the buyer only. Each Agent will keep confidential all information obtained from that Agent’s client unless that client consents to disclosure.
If you have any questions about agency representation, just send an email to: firstname.lastname@example.org
Stamp Duty / Conveyance Fees
Stamp Duty Exemption
Are you buying a residential property for $750,000 or less? if so you may be exempted from paying stamp duty.
If so, you should know that the Government of Bermuda offers exemption from the payment of stamp duty on the conveyance of a property for a purchase price of $750,000 or less to first time homeowners.
All circumstances affecting the criteria for eligibility for the exemption must be set out in the conveyance itself and the respective parties must sign declarations in order for the transaction to be assessed as exempted by the Tax Commissioner.
In order to qualify as a fist time homeowner, the purchaser or purchasers must be Bermudian and have never held an interest in another residential property greater than 25% of its market value.
Those transactions which meet the criteria for exemption must be adjudicated by the Tax Commissioner’s office.
The purchase price must be of fair market value and must be paid in cash or by way of a mortgage.
The parties must declare that the conveyance is not a part of a larger transaction where the consideration exceeds the required $750,000 threshold.
Conveyances relating to fractional ownership units or condominium hotel units will NOT benefit from the exemption.
If you have any questions about Stamp Duty Exemptions, please follow this LINK
Why Choose Coldwell Banker Bermuda Realty?
- We are 100% Bermudian owned/operated and have been a trusted local company since it was formed in 1953.
- coldwellbankerbermuda.com is updated every ½ hour
- We have over 400+ collective years of experience in real estate and over 40 licensed personnel.
- We are involved in 1/3 of all the property transactions in Bermuda.
- Our agents are ranked in the top 2% of Coldwell Banker Representatives Worldwide.
- We are a Full-Service Real Estate Company including sales, rentals, commercial sales & leasing, appraisals, land surveying, property management and vacation services.
Greatest Opportunity – our extensive local networking and global reach through Coldwell Banker Global Luxury means you will have access to the largest inventory for purchasing and premier marketing of your real estate listing when it comes time to sell:
- We are the largest real estate company in Bermuda, with the largest inventory, client base, and marketing exposure.
- Our website, BermudaRealty.com, is updated daily to give you immediate access to the newest listings available for purchase.
- Our exclusive Realty Plus sales database (used by our professional valuers and agents to help value property) has over 16,200 island wide records dating back to 1993.
- Our exclusive multi-point marketing plans, tailored specifically to your property, gives the greatest exposure to your home offline and online, including listing on ColdwellBanker.com, the #1 visited real estate website.
Most importantly: We Are 100% Focused On You!
If you have any questions about how we can help you with your Bermuda real estate needs, just send an email to: email@example.com
Why Use An Agent
When you employ the services of a licensed real estate agent, you are hiring an individual who is familiar with the legal and regulatory nuances of purchasing a home in Bermuda.
Commission involved in the transaction (typically paid by the Vendor / Seller), covers the cost of the Agent’s time.
When you employ the services of a Coldwell Banker Bermuda Realty, you are hiring a Company who is committed to and fully capable of servicing all of your real estate needs.
With 40 full-time staff, Coldwell Banker Bermuda Realty offers qualified marketing staff, professional land surveyors, accredited valuers, and the administrative support to make it all work for you!
Generally speaking, all Agents in Bermuda charge the same rate of commission (5% typically paid by the Vendor / Seller). You want to choose the Agent with the most experience and skills to achieve your objective in the shortest time possible. Coldwell Banker Bermuda Realty can offer you over 400 years of Bermuda real estate experience which means a smooth transaction with no surprises.
If you have any questions about how we can help you with your Bermuda real estate needs, just send an email directly to the Agent representing the property.
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