BAHAMAS REAL ESTATE GUIDE FOR SELLERS
Government Taxes on Property Conveyances:
For Individuals, Government Value Added Tax (VAT) on all Real Estate transactions is charged as follows:
2.5% on transactions valued at $100,000 or less
4% — $100,001 to $300,000
6% — $300,001 to $500,000
8% — $500,001 to $700,000
9% — $700,001 to $1 million
10% — More than $1 million
Please note that First-time Bahamian Home Buyers will be charged $0-$300,000 – 0%; $300,001-$500,000—4%.
The standard practice in the Bahamas is for the Tax to be shared equally between Buyer and Seller unless otherwise agreed Upon.
A 10% Value Added Tax (VAT) is levied on Real Estate Services, including Appraisals, Legal Work, Commissions, Common Area Maintenance (CAM) and Insurance. Laws and Policies are subject to change.
Stamp Duty on Mortgages is payable at a rate of 1% on the amount borrowed. The Bahamas Bar Association follows a minimum scale fee for conveyances and mortgage transactions at 2.5% of the sales price in addition to out-of-pocket expenses.
Bahamas Real Estate Commissions:
Developed Property: 6%
Undeveloped Property (Vacant Land): 10%
* Please note that all commission rates are also subject to VAT. See under Value Added Tax Section.
7 STEPS TO SELLING
Step 1: Reason for Selling
It is often more emotional to sell a home than to buy a home, and the reason for selling your home may be a determining factor in the urgency of the sale. The urgency may also have an effect on the price of the property.
It is important to take the following factors that can influence the sale of your home into consideration:
- Reason for selling
- Condition of property
- Design / style
Step 2: The Cost of Selling
It is very important to first calculate the expenses that may be incurred while selling your home. This knowledge is absolutely necessary because it helps you determine a price for the property as well as the potential profit that you can realize. The cost of selling your home may include taxes, property inspection fee, real estate agent’s commission etc.
For more details, please refer to our more detailed document on “Closing Costs & Taxes” under the INVESTING Page.
Step 3: Condition of Your Property
The condition of your property is always an important factor in the sale process. Be sure to asses the general condition of your property and make appropriate lists to reflect:
- Any upgrades and their value;
- Any structural damages or work that is required to be done on the house.
Step 4: Pricing the Property
The most important factor when putting your property on the market to sell is setting the right price. The price at which your property is marketed can make or break the deal. Selling a home is an emotional process, yet pricing a property requires objectivity to determine a realistic market value of your home. We highly recommend you choose an agent who can accurately price your property based on comparative market analysis, this will result in you achieving the sale of your home.
At KRA Bahamas we promise to determine the price point that will sell your home quickly for the highest price possible.
Things to keep in mind when pricing your property:
Over-pricing the property will most likely:
- Generate less interest from potential buyers, and
- Extend time on the market which will result in lower offers. Do not forget extended time also means continuing all your expenses associated with the property such as management fees, maintenance, property taxes, insurance, mortgage interest etc.
- Price Reductions will result in lower offers.
Under-pricing the property can:
- Give a negative perception and create a sense that something is wrong with the property;
- Can be a preferred choice for some sellers in certain market conditions when it can create ‘ a buzz’ and create bidding. Please consult your agent.
Here are some other things to consider when pricing your property:
- Recent comps in your neighborhood?
- Is the neighborhood your property is located in well-established, up-and-coming, transitional?
- Is your property located in an urban or rural area?
- Vicinity or access to the beach ?
- Accessibility to the shopping centers, schools, main roads etc. Your agent will work with you to highlight the places of interest that are most accessible to your home.
Step 5: Maximize Curb Appeal
Acquiring the best possible price and elevating your home above the others in the same price range often comes down to first impressions. For the full list of tips how to improve your home and better prepare it for sale, please refer to our document “Tips for Selling Your Home Faster.”
It is the first impression that leaves the most imprinted memory of a home for most buyers. We should always look for ways to improve that first impression and leave our buyers breathless. There are some inexpensive ways to maximize your home’s curb appeal such as paint the front door, clear debris and clutter from yard, mow the lawn and prune hedges, pot colorful plants to attract attention from the street, fix broken doorbells, screens and outdoor lighting. These are small investments will make a difference and improve house appeal and first impression.
Step 6: Consider Staging
Once you have worked on the curb appeal, you need to think about how well your property would show.
You only have once chance to make a first impression and that is when most buyers form their opinion about a home. We want to capitalize on that moment. Research suggests that homes staged prior to listing sold an average of almost 80% faster than homes staged after being listed. According to the National Association of Realtors (NAR), the average staging investment is between 1 and 3% of the home’s asking price, which generates a return of 8 to 10%. It’s the investment worth making. Consult your agent and let him/her be your guide.
Well-placed furniture can open up rooms and make them seem larger than they are. Sometimes existing furniture does not emphasize the space as well, although it has worked well for you and your family needs. It might be a good idea to think about staging your home. Our goal is to help you prepare your home to look its absolute best. Staging a home effectively can result in your home selling in a much shorter amount of time and for a higher price.
In today’s world every home search starts online. Making sure your home is effectively staged before photos are taken for your listing will significantly increase your chances of selling. For more details on inexpensive ways to highlight your homes best features, please refer to our document “Tips for Selling your home faster”
At KRA Bahamas we promise to sell your home quickly for the highest price possible.
CONTACT US or call today 242.424.8369