The Cayman Islands Buying Process
Anyone who only occasionally transacts with real estate will be familiar and comfortable with the buying and selling process. This is true in all countries and as with a lot of things in the Cayman Islands they have their own ways. The Cayman Islands are a British protectorate but being so close to the USA have adopted and adapted a lot from their systems.
The real estate brokerages are founded on the American model of real estate agents within their brokerage competing against each other. MyRealtor.ky is different and is building an English model estate agency. Where all the realtors are working together for the benefit of our clients.
Registering interest
CIREBA (Cayman Islands Real Estate Brokerage Association) agents will recognise introductions to buyers from other agents but the agent has to get the foot in the door first. This is important because the CIREBA agents will take 7% of the sale price as commission and this is factored into the sale price. MyRealtor.ky only takes 2% whether acting for the buyer or the seller. If we get a split of the fee for an introduction to an agent and that is greater than our 2%, we will pay our client the difference.
We will accompany or undertake viewings. If you are overseas, we can arrange for a virtual tour to be photographed and give you complete tour online, if one is not available. We will assess reasonableness in the value of the property and alert you to the benefits and problems so you can buy with your eyes as well as your heart.
Making an Offer
When you find your dream home, the process is akin to dancing round handbags. You have to make an offer which to be considered is a formal document called the Offer to Purchase. This document is really important. Once exchanged you are committed to the purchase and subject to any conditions in the Offer to Purchase may lose your deposit if you do not close on the purchase.
The Offer to Purchase is a legal document but is put together by the real estate broker. It outlines the purchase price, the timetable for the transaction, conditions on the offer, and arrangements for chattels. It is important to have a professional broker who can explain the Offer to Purchase, is happy to take your through step by step and explain clause by clause. Walks you through the timetable to be sure you can meet the obligations. As an aside at this point, if you cannot close by the date contained in the Offer to Purchase then you may get an extension however, it isn’t agreement with the seller and there is no obligation or requirement on them to agree to extend the date.
The Conditions
This is probably the most important part of the Offer to Purchase as it ensures you have the ability to get all surveys, valuations, finance and other requirements carried out and the dates by when they will be undertaken. A professional and extremely experienced broker is worth their weight at this point as it can make the difference in meeting all your needs and not.
Exchanging the Offer to Purchase
Once the prospective buyer has signed & initialled each page of the Offer to Purchase then it is submitted to the seller or their agent to accept. In the Offer there will be adage by which they have to accept the offer. Normally there will be discussion with the seller or their agent on price & levels that would be acceptable. However, it is very common for a broker to entertain no conversation & wait for the formal signed Offer to come in to them.
Once the seller accepts and signs and initials his part then exchange takes place and that commits the buyer to the process and timetable. A deposit is paid and normally held in the seller’s agent’s escrow (client) account. Watch out as some agents don’t have an escrow account and if buying a development off plan (ie not built yet), the deposit may be passed to the developer. Either of these options is risky because if they go bust or run off with your money there is no recourse. With MyRealtor.ky being regulated by the RICS we have client money protection which means your money is safe regardless.
The Deposit
There is no set deposit amount and it varies quite a lot up to 10% of the purchase price. It would be paid when putting in the offer or within a few days of the acceptance of the Offer. Or a combination of the two. We always make sure we know where the deposit is going to and how it is going to be held.
Chattels
If you are buying an existing home it is not uncommon for the seller to want to sell the furniture. This may be included in the purchase price or negotiated separately. Either way it will be specified in the Offer to Purchase as to what is to happen. It is very important when closing the purchase to know the amount for the chattels and ensure that is removed from the stamp duty calculation.