Ask a property owner in Freeport how’s the real estate market and you will get many different answers. About 50% of the people think their property value has increased or has stayed at the same value over the last year and 50% the people think their property value has decreased. In reality 80% of the property has lost value over the past year. You would certainly not know that our prices are down if you look at the thousands of listings on the real estate brokers web sites or try to buy piece of property.
But keep in mind that listings are not what a property sells for but rather they are what sellers WANT to sell their houses for or the List price. Of course Realtors and Sellers are to blame because everyone needs to be more realistic with real Market Value and price homes and land accordingly. What a house actually sells for is the most important statistic and the only way to know this information is to talk to the realtors or ask someone who has actually sold their house. The Bahamas Government Registrar General’s Office has this information on microfilm but it is time consuming to access their records and the records are not very current as they are back logged with recording the title documents after conveyances are stamped and recorded.
Is this bad news for the Real Estate Market? Not really, it only means that sellers have to be realistic with pricing if they want to sell because it is a Buyers Market. A Buyers Market simply means that there are more Sellers (more inventory) than Buyers and so naturally savy Buyers are looking for deals and more realistic prices. The stubborn sellers who think that prices have not come down are going to have a very tough time selling their homes.
There are buyers out there and the market is starting to make a snails pace recovery. The recovery simply means that buyers are buying again BUT they are paying lower prices. So if you really want to sell adjust your prices to real market value and you will increase your chances of selling in a shorter time frame. I can assure you that buyers who are making offers are getting noticed. There are many sellers out there that are tired of waiting for their property to sell and willing to negotiate on the prices. The good news is that if you are a buyer this is a good time to buy, but the trick is in the successful contract negotiations.
There are motivated sellers in this buyers market but selling price for a home or investment property is only one factor in determining whether the buyer and seller can reach an agreement. The sales contract (Purchase/Sale Agreement) has many facets that must be considered, understood and accepted by all. An experienced broker is a solid advantage to both buyer and seller, because they have been through countless transactions and understand the principles of successful negotiations.
At James Sarles Realty we have seen deals fall apart over very minor, petty issues and we have saved deals where parties have walked away from the closing table. As the old saying goes “It aint over till the fat lady sings”. We don’t look at deal is done until the checks clears, the buyer has keys in their hand and the seller has money in the bank.
The issue of price or consideration in your deal is only one aspect of the finances. The contract should specify who pays for stamp tax, legal fees, and real estate fees. A typical gross offer or list price that you may see advertised implies that stamp tax is customarily split between buyer and seller, whereby each party pays for their own attorney fees and seller pays for the real estate fees. HOWEVER, any of these costs can be negotiated with either party paying any of the fees as the closing costs are NOT mandated by law. Its real estate and its negotiable as long as it is clearly stated. Sometimes the purchaser makes a net offer which means that the seller receives whatever is offered and the purchaser agrees to pay ALL closing costs including ALL legal fees for both parties, ALL real estate fees. In a net deal the percentages of the legal fees, the real estate fees and the government stamp tax are based on the Net price.
An important clause that is left out of many contracts is who pays for conversion fees. If a foreigner is purchasing property from a Bahamian or if a Bahamian is purchasing from a foreigner there is a conversion charge from US dollars to Bahamian dollars (.995) or Bahamian Dollars to US (1.0125) as Bahamians can’t accept or hold US dollars based on Exchange Control Regulations or purchase with US dollars. There is no hard and fast rule of who should pay for these charges. They can be paid by either party or split but MAKE SURE IT IS CLEAR WHO WILL PAY WHEN YOUR ARE NEGOTIATING THE DEAL!
A good real estate professional will make sure that there are no surprises in the transaction and that all aspects of the deal are covered. The team of a professional competent attorney and a professional competent real estate broker makes for a smooth transaction.
If you have been thinking about getting in the market this may be your opportunity to buy that property at the right price with sellers who are motivated. If you really want to sell then make sure your pricing is right so you can attract the motivated buyers.
Good Luck with your negotiations. Until next week.
