Buyers Guide

You have probably already heard that before you start your search for your first home you should establish how much you can afford to spend. This amount will be determined by how much you are thinking of putting down on your future home and how much a lender is willing to let you borrow. In order to find out what a lender is willing to lend you, you should get a Loan Pre-Approval. A Loan Pre-Approval is when a loan officer at a lending institution actually pulls your credit and reviews your income and assets and says what you personally should be approved for. The loan officer then puts this into a letter form for you. Getting pre-approved is important so that you know what kind of price range you have to work with. Lending institutions are for instance banks and insurance companies. For more information you can contact one of the lending institutions listed at “Links” on our website.

You have determined your budget and are ready to start looking at properties. Before you look, list the features and benefits you want in a home.Consider pricing, location, size, layout and extras.Decide what’s most important and how much you are willing to compromise. Ask us to send you free of charge our Checklist for Finding the Ideal Home. Knowing what you are looking for, you can start looking at houses to orient yourself by classically driving around neighborhoods of your choices looking for the recognizable “For Sale” or “For Rent” signs. Nowadays is property search online very popular.

Step 3: Contacting the real estate broker for showing appointments

You have oriented yourself and perhaps even have made your priority list of properties you would like to see and will now contact a real estate broker. The broker will arrange an introduction meeting with you and start making showing appointments. At Alto Vista Real Estate we also assist you in arranging showing appointments for properties listed at other real estate brokers. As you look at houses, you will develop adiscriminating eye about what you like and don’t like in a home and what is acceptable and what isn’t. You may view very few properties or perhaps more. It depends on your specific needs. Review your notes to narrow down the choices.When you find the home of your dreams, be sure it is a good fit for you and your family.Consider all of the pros and cons of the property including its future resell value. Once a buyer has selected the best choice for their new home, it’s time to get funding.

Today there are many options on how to go about financing your new property. For the majority of people buying a property today is getting a mortgage an important part of the buying process. A mortgage is a loan that home buyers can procure from a bank, insurance company or another lending institution. Talk to several lenders to find out the best loan program for you. The lenders will inform you about the process of getting a mortgage, the requirements and costs involved. You will also be informed about all kinds of insurance attached to the purchase and ownership of a property. Once you decide on a lender, you will have to provide information about your income, your debt, your down payment money and other personal information. An appraisal report of the property is also required. This estimates the value of the property for your lender to make sure its value supports the loan amount. For more information you can contact one of the financial institutions listed at “Links” on our website.

Once your financing is in place you can make an offer. Regardless of how the offer is presented, once it is presented, the sellers have three options, they can accept it, reject it or make a counter-offer. If there is a counter-offer presented by the sellers the buyers have the same aforementioned three options to determine the outcome of the counter proposed items. By acceptance you have a deal, a purchase agreement.

A purchase agreement is the legal document that spells out the terms of the purchase. Once the price has been agreed upon, you will be asked to sign a purchase agreement which often writes that 10% of the purchase price will be transferred as a security deposit within a certain number of days from the signing by the buyer to the escrow account of the civil law notary who will be handling the transfer of the property. This 10% shall be deducted from the selling price upon execution of the deed of transfer of title. The notary shall refund the security deposit to buyer only if the purchase agreement has been dissolved otherwise than due to buyer’s default. For this reason we would like to warn you in case you consider to make an offer and sign a purchase agreement without having your financing approved yet by your lending institution. We therefore advice to include a protective article in your offer and purchase agreement that writes that in case you do not receive an approval from at least two lending institutions within a certain period of time, the offer and purchase agreement shall automatically be considered dissolved and not considered buyer’s default. In last case however the notary could still invoice seller and buyer for work done.

As from the moment the notary receives the purchase agreement, the process of preparation for the turning over of the ownership of the property to the buyer starts. The notary will obtain data from the land registry office (kadaster) and from the tax department to determine if there are any unsettled and conflicting charges against the property, and to determine the tax value (leggerwaarde) of the property. The transfer tax rate is 3% or 6% of the tax value or the purchase price depending on the highest amount of the two and the limit amount of Aruban florins 250,000.00 (US$ 141,243.00). The six percent transfer tax rate is applicable if either the tax value or purchase price surpasses aforementioned limit. The notary will prepare also the mortgage commitment papers. This whole process takes about six to eight weeks. Note that the buyer bears all closing costs such as the transfer tax and the notary costs, which have to be settled before signing. The buyer is the one who usually makes the choice of the notary. For more information you can contact one of the civil law notary offices listed at “Links” on our website. The real estate broker’s commission is usually paid by the seller.

It is now time to have your first dinner in your new home!