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Buying Your First Home

You have made the decision to make one of the largest investments you will perhaps ever make in your life. You are excited and at the same time anxious. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for the down payment? Where do I want to live? What features do I want?

Rest assured you are not alone. The home buying process can be overwhelming, but if you go into it prepared, your first purchase can be a good and memorable experience. Here is a guide to help you through the process.

Let’s get started!

Get pre-approved – Fear of being rejected for a home mortgage is one of the main concerns of first-time homebuyers.  To lessen the stress, it is better to get pre-approved for a mortgage before looking at prospective homes. It gives you a benchmark for how much you can afford which will narrow down your home search from the start, thus saving you time. This will not only help you feel more confident but it will also give you an advantage when there are multiple offers for a specific home. The fact that your mortgage has already been approved is of great value to the seller. It puts you in a better position to move forward quickly with the purchase.

Where do I want to live? – Consider the right location. Ask yourself, what type of neighbourhood do I want to live in? Do I prefer an older neighborhood or newer development? How close is public transportation, a supermarket, shopping and schools? Are there community amenities nearby?

Wants versus needs – Now that you know your pre-approved numbers, make a list of your “wants” and “needs”. Keep in mind these are two different considerations. Your wants are what you desire whilst your needs are necessities. Think of it as, “would like to have but could do without.” Ask yourself, do I really need this or simply want it? This will save you a lot of time and stress in the home search. What size home do I need? How many bedrooms and bathrooms do I need? Will you or someone be working from home and need a separate office space?

Appoint a Real Estate Agent – Engage the services of a professional Real Estate Agent to help you with the home search and to guide you through the process from start to completion. Preview homes that meet your criteria. Your agent will review homes available in your price range that meet your needs. It is now time to view homes and determine what works for you and what doesn’t.

Appoint a legal representative – It is never too early to secure the services of a Barbados attorney-at-law who you will need to do all your legal work. By doing so, it will speed up the process when you are ready to go forward with the purchase.

 Making that offer – You have finally identified the home you want to buy. Before you make that offer, here are some factors to consider – Market conditions. Is the prevailing market a strong buyers’ or sellers’ market? In a sellers’ market the odds could be stacked up against you as there could be bidding wars. However, in a buyers’ market the options may be more advantageous to you. Seller’s motivation.     How motivated is the seller to sell. If his or her motivation is high, this could also be on your side. Length of time on the market. Has the home been recently listed or has it been “sitting” for a long time. Aborted sale. Has a prior deal fallen through? Physical condition. Consider the physical aspect of the home - its condition, the floors, roof, age, mechanical systems – electrical and plumbing, termite infestation, cracks, covenants, everything! Does it require any major repairs or alterations and if so, how much will it cost. Have it inspected by a qualified inspection agency. Valuation report. Remember too, your mortgage application will be subject to a valuation report. This is in order to protect the interest of your lending institution. Consult your professional real estate agent who would be able to guide you in making an offer that may be acceptable to both parties. You don’t want to make an offer that is too low that could offend the seller and at the same time you do not want to pay more for the home than is necessary.

After the offer is accepted -

At a later date, you will be required to sign the Sale and Purchase Agreement and pay a 10% deposit. The seller will also be required to sign the document. A binding contract is now in place and the home is taken off the market. A series of searches on the home will be conducted by your attorney-at-law. This is to ensure the seller provides you with a clear and valid title and that there are no encumbrances, liens, judgments or other impediments against the home that could affect the transfer of ownership to you. Your attorney will also check and ensure any outstanding utility bills and property taxes are paid up by the seller prior to the completion of sale. After this has been completed, a Conveyance is prepared by the seller’s attorney and you will be required to pay the remaining 90% of the purchase price. The sale is now completed. The entire process could take anywhere between 3 – 6 months.

Enjoy your new home!