The Property Banks Buyers Guide to Aruba
Once you are convinced the house is right for you, you start negotiating the price.
Make an offer, because asking prices are never final. Start within
90% of the asking price or even lower, but not too low. Be aware,
because making an offer the seller accepts will at least morally
bind you to buy the house. Always , especially when you make your
offer in writing, make it clear, that this agreement will be made
under the condition, that you bank will approve of the purchase. At
this point you go back to your bank and give them the appraisal and
ask them for the approval of you mortgage.
This can take some time, therefore stay in close contact with your
bank employee assigned to your case. You haven’t signed anything yet
with the seller of the house, so you might loose it, if the process
takes too long.
The appraisal should never be older then 3 months, although some
banks agree with a 6 months old appraisal (one of the questions, you
should ask at your first meeting). Very important: ask your bank, to
provide you with a list of appraisers, they accept as competent.
It can be the appraisal, the seller had already or the one you had
made. The seller is not obliged to provide an appraisal. The buyer
is the one, who needs it to obtain the financing and is therefore
the one, who should have made one.
Once you reached an agreement, you will be asked to sign a ‘purchase
agreement’ (voorlopige koopakte).
Nowadays most notaries ask for a security deposit, before starting
to work on a sale. The amount varies from one to the other. Before
you do have the approval of the bank, you should think about signing
the purchase agreement, because that makes you reliable for the
deposit or at least for half of it, according to what you agreed
upon with the seller. Ask your realtor, how to handle this
situation.
Once you signed the purchase agreement, the notary will start
working on the sale, which means collecting data from the ‘kadaster’
(to see what liabilities there are on the property) and from the tax
department to determine the ‘leggerwaarde” (the tax value of the
house, which determines how much you will have to pay on transfer
cost, which is 3 % of the ‘leggerwaarde’).
Never forget, that the buyer has to pay all the closing costs, the
aforementioned 3 % plus notary costs ( approx. 0.5 to 1 % of the
sales price, ask your realtor to calculate this amount) plus 2 %
over the ‘hypotheekakte’, which means, that you will have to pay 2%
over the amount that you loaned from the bank. There are some minor
additional costs.
Also, all purchase agreements include a stipulation, that a 10 %
(usually, but this is negotiable)security deposit has to be made
towards the notaries account, within 3 or 5 days, according to the
contract. This deposit will be used as a fine, if you don’t comply
with the contract. At the end this deposit will be deducted from the
balance.
When the notary finishes his/her work, after about 6 to 8 weeks (!),
everything should be ready and the notary will send you a final
statement, where the total amount, you will have to pay will be
listed. This goes to your bank and the difference (your down
payment, see above) has to be paid by you before signing the final
deed. After signing, there is a certain period in which the notary
will check on possible claims on the house and has to receive the
total purchase price from the bank.