Get a professional
You can go through the purchasing process yourself, but it is probably best that you hire the professional services of a lawyer or another qualified expert. Typically the law firms will charge you a fee between 1.5% and 2% of the purchase price of the home.
Letter of Intent and Earnest Deposit
You will need to make an offer on the property accompanied by a 10% earnest deposit which will be held with the real estate agency.
Transferring the House
Your lawyer will advise you on this process. But you will have to pay stamp duty before closing on the house. See section on paying your taxes for details.
Purchase and Sale Agreement
Once the offer is accepted, a Sale and Purchase Agreement must be entered between you and the seller. If you are a non-BVIslander, this agreement is contingent upon you getting a Non-Belonger Land Holding License. The Sale and Purchase Agreement normally will provide 45 days, for you to obtain financing if necessary.
Getting Money to Build or Buy
If you need to get a loan to finance your home, you should research and shop around for the best rates. Most banks will usually only finance about 75% to 80% of the appraised value of the property. This is inclusive of the value of the land. The estimated interest amount payable during the construction stage is worked into the loan. If the loan is approved, an origination fee, legal fees, interest and escrow adjustments would be deducted from the requested amount.
The bank will evaluate the value of the land and building and set timeframes in which the house should be completed. Once it is determined how much money the bank will lend you, the rate and amount at which you will pay the bank back must be set. See banking section for how loans are administered.
It is very important to note that once your loan has been approved and you’ve closed on the mortgage, most banks do not give you all the money or even half to begin. Instead you receive a percentage of the loan that the bank estimates is sufficient to get you to a certain phase in the building project (usually within an estimated time frame). Once you’ve completed that phase, then you can go back to the bank for another draw down on the loan.
Before the bank gives you another draw down, the project first has to be appraised by an appraiser assigned by the bank to ensure that you are in fact putting the loaned funds into the building project. If the appraiser reports that you did not show sufficient progress on the building according to the funds you have received to date, you will not be able to get another draw down until you’ve completed that phase. The bank will also require an itemized list of how the draw down will be spent and it is recommended that you stick as close to that as humanly possible.
If you need a loan to build your home, do not start building until your mortgage has been approved. Do not waste your money starting a building project that you cannot afford to finish on your own if you’re not approved for a loan.