On Financially Focused, we like to discuss the global situation in real estate which has been truly positive in this COVID time.
The universe of real estate covers brick and mortar assets as well click and order real estate investments such as mortgage loans and tax liens.
Missed those topics? Check out the real estate playlist on Financially Focused.
That said, you can certainly lose money without the right support team and Robert Taylor, attorney at law is here to share with us two secrets that can make or break millions in your real estate investing career. The transcript of the video continues below.
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Now we already said you are an licensed real estate attorney, however, research has shown that some persons are advising real estate investors that they can use one of three options to buy propert
- Lawyer
- power-of-attorney or paralegal
- common man
So what are the financial implication of these choices?
Next, we look at another hot button. The type of real estate title you are offered when you are seeking to buy property.
- A common law title
- A registered title.
What are the financial implications of these choices?
Now in the global context, all countries have different stages of the real estate purchase transaction.
That said, let’s go through the 13 states of the property purchase in Jamaica.
1. If a real estate agent is involved, their commission is usually 5%+General Consumption tax (GCT) of land/property value payable by VENDOR, although this fee is being passed on to the PURCHASER in modern practice.
2. VENDOR can do an evaluation to establish a sale/purchase price.
3. VENDOR secures an attorney/lawyer. Attorney fees for VENDOR ranges (3%-3.5%) + 16.5%GCT of the agreed sale/purchase price.
4. PURCHASER and VENDOR should understand which title is available, if any, for the property being sold. Two kinds of land title exist in Jamaica. A common law title is a certificate of ownership used for unregistered lands ie lands without an official title. More on common law title here at http://www.antheamcgibbon.com/i-have-a-jamaican-common-law-title-how-do-i-get-a-title.htm). NOTE: By the end of the transfer a properly registered legal and official title must be passed on to the purchaser. The other title is the official and legal title you get upon officially registering your property. The Registration of Titles Act stipulates that the original must be retained at the Office of Land and Titles, while a duplicate is provided to the proprietor.
5. PURCHASER secures an attorney. Attorney fees usually range between (2%-6%) + 16.5% GCT of land value
6. PURCHASER should make background checks. A land survey and title search is done to make sure that no other claim or conflicting interests is registered against the property.
7. PURCHASER makes an offer or accepts VENDOR’S PRICE. Remember that it is normal for payments to be made in installments. NB: Foreign currency remittance for the purpose of purchasing real estate is prohibited without the approval of the Bank of Jamaica. Consent from the Exchange Control Department of the Bank of Jamaica is required prior to engaging in purchase agreements
8. The PURCHASER should lodge a caveat on the property. This caveat will prohibit any other interest from being registered against the property, until transfer has been completed.
9. VENDOR prepares an Agreement for Sale usually via his/her lawyer.
10. BOTH VeNDOR And PURCHASER signs the Agreement for Sale, either at real estate agency if the same is employed, or, in the presence of a lawyer.
10a. PURCHASER pays a deposit of approximately 10%-20% of selling/purchase price.
10b. PURCHASER also pays percentage of stamp duty on the transaction (which may be included in overall deposit)
11. VENDOR submits an application to the Office of the Registrar of Titles.
12. VENDOR pays government duties. NOTE: Documents on conveyance of land must be stamped within 30 days of signing, to avoid substantial penalties.
13. Transfer of deed completes the sale. NOTE: registering of title takes approximately 54 days.
