Purchasing property is no easy feat as there are many facets to finalising this deal.

Most important is affordability. In today’s real estate economy, affordability is a luxury for most, even without the taxes and fees.

If you are interested in purchasing a home, you may have only considered the cost of the property. However, what of the other costs associated with property acquisition? The relevant costs are dependent on whether you are the purchaser or the vendor, as the vendor usually pays more relative to the transfer of the property.

Here are a few things to consider prior to making a budget for acquiring or selling a property.

ACQUIRING AN ATTORNEY

It is advisable that both the vendor and the purchaser acquire separate attorneys to safeguard against any conflict of interest. The attorney, once retained, can charge between two to four per cent of the value of the estate, exclusive of General Consumption Tax which is 16 per cent of the amount charged. Once each party has settled on their individual attorneys, the sale agreement will be drafted.

VALUATION OF PROPERTY

This is required by mortgage institutions as the cost for the property will determine the mortgage loan amount. It is advisable that the purchaser acquire the services of an independent valuator to ascertain the true value of the property prior to signing the sale agreement. This will assist the purchaser in deciding whether the property is worth the amount being asked by the vendor. Similarly, the vendor should have the property valuated to assist in setting a price.

SURVEYOR’S REPORT

This is a requirement for mortgage institutions. As the purchaser, you want to ensure that the amount the property being sold is within the boundaries stipulated and no restrictive covenant has been breached by the current owner. You don’t want to be left holding the bag, with all the expenses associated with correcting that breach (assuming you are paying by cash and not via a mortgage company).

If paying via a mortgage, the institution will require a Letter of Undertaking from the vendor’s attorney that the breach will be rectified. The cost for a surveyor’s report is relative to the cost of the property approximately 0.35 per cent.

SALE AGREEMENT

The vendor’s attorney is responsible for drafting the sale agreement. This agreement itemises information regarding to the purchase price for the property, amount payable for the deposit, carriage of sale, description of the property and the amount and apportion of the stamp duty and registration fee.

The sale agreement is the contract which binds both the vendor and the purchaser. Notwithstanding, it can be rescinded by either party subject to clauses specifically listed as a special condition. The cost for the sale agreement is dependent on the attorney or firm.

REALTOR’S FEE

Once the service of a realtor is utilised, fees are incurred as their commission. This is usually five per cent of the property value excluding the 16.5 per cent General Consumption Tax.

DEPOSIT

This is usually a fraction of the sale price and is payable upon signing the sale agreement. As such 10 per cent is required as payment by the purchaser.

STAMP DUTY

This is regulated at four per cent of the sale price of the property and is shared equally by the vendor and the purchaser.

REGISTRATION FEE

This is payable by both the vendor and the purchaser and is approximately 0.5 per cent of the purchase price.

TRANSFER TAX

This is always paid by the vendor, and is five per cent of the market value of the property.

There are other miscellaneous fees to consider such as the cost for letters of possession. These are letters which are drafted by the vendors’ attorney to the utility companies stating that the purchaser is the current registered proprietor of the property. These fees are shared equally between the vendor and the purchaser.

Rashema Gordon Morgan is an Attorney-at-Law who specializes in conveyancing, probate and civil matters. Rashema may be contacted via email rashema.gmorgan@gmail.com or telephone 876-370-1915. This article is for general information purposes only and does not constitute legal advice.