Pointers for Purchasers of Real Estate in the Turks and Caicos Islands
Posted: Sunday, May 21, 2006
by Bernadette Hunt
Turks & Caicos Property, Ltd.
The first thing to understand about the Turks & Caicos Islands is that it is a small place, and there is limited inventory on the market. We get lots of enquiries from people with a very specific idea of what they want - e.g. 2 storey, 3 BD / 4 BTH home on beach w/pool jacuzzi tennis court, etc. While those sorts of enquiries can occasionally be accommodated for the most part people have to aim for the properties that come closest to what they are
looking for.
1. Get the basics right based on your objectives:
(a) Residents have a relatively easy task because their purchasing decisions are often driven by necessity. Factors such as avoiding rent, being in a position to invest in improvements, etc. means that on some level a resident who needs a house or a business premises is not taking the same financial risk as a non-resident investor.
(b) Non-resident investors looking at undeveloped commercial property need to do some background work and be aware of planning and zoning issues which might limit development and resale values. By way of example, if you are considering an undeveloped commercial lot on the Leeward Highway with 300 feet of road frontage because you expect it can be subdivided into 3 or more lots and resold you need to ensure:
(i) that Planning will let you subdivide the lotHaving a knowledgeable real estate agent and an attorney to advise you throughout is generally desirable. It is also worthwhile getting an overall understanding of the market - i.e. there is quite a bit of migration to the Grace Bay area on Provo for certain businesses that are tourism related which may affect rentals in certain areas industrial development is mainly on the road to South Dock (the main port of entry) financial services industries have historically gravitated to the Leeward Highway area to be close to the main banks.
(ii) that Planning will give you highway access to each
subdivided lot to be resold (the policy is to minimize the number of turn-offs from the highway)
(iii) that there are no zoning surprises - the general category of commercial zoning covers a multitude including multi-family residential, tourism related development, industrial, light-industrial, etc., each of which permit certain types of development
(iv) that you get an understanding of set-back requirements based on your plans for the property to ensure there are no surprises.
(c) If you are looking at residential housing and undeveloped lots neighborhood is very important. Driving around by yourself will help but an experienced real estate agent can generally provide additional information which isn't readily apparent from visual inspections such as Government planned infrastructural improvements comparable sales figures proximity to desirable and undesirable areas and neighborhoods an overview of recent purchasers and
their plans for property in the area.
2. Use the MLS site as an informational resource:
TCREA (Turks and Caicos Real Estate Association) member agents put the majority of their listings on the MLS and listings are shown in the quarterly magazine which everyone reads, and on the TCREA website (www.tcrea.com). As of the 21st of May 2006 there are 649 residential properties and 36 commercial properties listed on the MLS which makes it the single largest publicly available informational resource for real estate in the islands. The site has a functional search engine which lets you search for the type of property that interests you (e.g. beachfront condos ocean view homes commercial properties etc.) and will give you a general sense of pricing.
3. Use a TCREA agent and brokerage:
You need to know that the agent that you are dealing with is liable to sanction for misrepresentation, material non-disclosure and so forth. The TCREA has a code of ethics and an ethics committee which actively regulates member brokers and sales agents. While there are non-member agents that have carried on business successfully for years, if you don't have a personal connection it makes sense to consider an agent who provides a service in accordance with specific guidelines. TCREA agents also have more access to comparable sales information through the MLS system than non-member agents and will generally have more up-to-date and detailed information on a wider selection of properties as a result.
When you have a fixed idea of what types of property you are interested in contact a real estate agent and enquire about the listings that you have seen (whether on that agent's site or on the MLS) and ask for more information on those listings and any comparable properties that they are aware of in the price range. For the most part agents will be able to email you
photographs and give you a bit of background information which you would not otherwise have access to.
4. Give your agent an idea of your price range:
This is a sensitive area for many buyers. The legitimate concern is that if you are dealing with a listing agent they owe a duty of care to the listing party to get the best price they can for the property and if you tell them what you can afford you will be less likely to press pricing. The
downside of that approach is that if you don't give an agent a good sense of what you may be prepared to pay you can lose a few days looking a properties that are priced above what you can afford, or alternatively, are not up to the standard that you are looking for and can actually afford. Generally the best approach is to provide a price range and update it depending on what you are shown. A TCREA agent should not mislead you if you ask a legitimate question, and asking questions (comparable sales pricing and properties previous offers length of time on the market) is essential in ensuring that you have a good understanding of what you
are getting into. Talk to your agent about this important point to save you both time, and if you aren't comfortable that you can reach a workable understanding look for another agent that you are more comfortable with. If you have contacts that are based in the Islands or have property here ask them if they have heard anything negative about the agent you are dealing with.
5. When buying an existing structure consider a structural survey:
There are a number of structural engineering firms in the islands who can carry out a home inspection for you which will generally give you a better sense of what you are buying. My preference is to walk through a property with a building contractor (which can generally be arranged for about $200) to identify any apparent issues and ball-park the cost of repairs or upgrades.
6. Use an attorney:
Although much maligned (for the most part unfairly), your conveyancing attorney is one of the most important cogs in the purchasing wheel. Your attorney is the only party in the process that is not (or at least should not be) conflicted in giving you independent advice and feedback - that is why you pay attorneys for their time in the event that you decide not to proceed.
Their job is to try to protect your position throughout and if needs be, tell you that you shouldn't proceed. A real estate agent has a vested interest in committing you to a purchase, and while more successful agents provide more balanced feedback the apparent conflict of interest is there, so retaining an attorney is always a smart move.
7. Deal with one agent (per island at least):
Because this is a small place if you insist on dealing with more than one agent the chances are good that if you decide to buy a property there will be a dispute between 2 or more agents over who is entitled to a sales commission. Avoid potential conflicts by choosing an experienced agent that you get on with and stick with him or her until the ground has been covered. If you want to hop from one agent to another then deal with listing agents on their specific listings and let them know up front if they suggest a property which you have already seen through another agent - i.e. if you want to take a second look at a property that you have seen previously go back to the agent that showed it to you first. If an agent is not inclined to follow your suggestion on this and deal fairly with the other agent(s) concerned, you have to expect that they will be less likely to look out for your best interests also.
8. Plan a trip! (buying sight-unseen is a last resort):
With the run-up in property prices there are numerous examples where would-be purchasers have delayed in taking a decision only to end up chasing higher prices. As a result we have seen more and more examples of purchasers putting in offers sight-unseen to avoid losing a property in a fast moving market. Unless you have already dealt with an agent, have a good
understanding of the market and a high level of trust buying sight-unseen is always less than ideal. Even if you have that level of trust you should ask your agent to go out and photograph the property for you so you have up to date pictures. They say a picture tells a thousand words and that is particularly apt in the Turks and Caicos where agents tend to be photographers of the point-and-click variety. If a property photographs well it is worth putting it on a short-list, but bear in mind that your agent may be struggling with his/her new digital camera and/or the property may be difficult to capture, so ask for an opinion while the property is fresh in your agent's mind.
We have assisted clients on occasion in purchasing sight-unseen but there has usually been a prior relationship, and/or we have had a very clear understanding of what the client is looking for and their expectations. If you are committed to buying real estate in the Turks and Caicos the first and most important step in the process is buying a plane ticket and doing some
on-the-ground research. If you have been to the islands and are pursuing property in a particular neighborhood which you are very familiar with and you want to tie it up before someone else does, at the very least try to arrange a trip down for a walk-through before you go to contract, or try to negotiate closing subject to visual inspection.
Happy hunting!
Bernadette Hunt is a principal of Turks and Caicos Property, Ltd.
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