Buying a property on Bonaire
Bonaire is part of the BES islands; Bonaire, St Eustatius and Saba. These 3 islands are special municipalities of the Netherlands. This status also ensures a different legislation than in the Netherlands. Also with regard to the sale and purchase of real estate. In this blog post we explain the process of buying real estate on Bonaire.
Bidding on a property
When a property is offered for a fixed price or sales price, there is no possibility to negotiate; when an asking price is used, this is possible. The seller does not have to accept a bid; not even when the asking price is offered. Unlike the Netherlands, on Bonaire, according to the applicable legislation for the BES islands, the entire process from bid to acceptance can be done verbally.
When a buyer or seller accepts an offer, an agreement is established which is binding for both parties. The offer is accepted under certain conditions such as final price, date of transfer and included items such as furniture and belongings of which the seller will provide a detailed list.
The purchase agreement
The real estate agent will then draw up a purchase agreement which includes the above and further rights and obligations for both parties. The contract may be drawn up with reservations, if applicable. One of these is a reservation on financing. The buyer must clearly indicate in advance the amount for which financing will be requested. The purchase can only be dissolved if financing is not obtained. The prospective buyer will in this case have to be able to submit two letters from demonstrably reputable financial institutions with which he demonstrates that he has done everything possible to obtain the financing.
Suppose that you, as a prospective buyer, have made an offer subject to the reservation of financing and the seller has accepted this. The requested financing is approved by the lender but you decide not to buy, then you owe the seller in this case a penalty equal to the down payment of 15% of the purchase price. This is because there is an agreement that can only be dissolved if financing is not obtained. (Unless otherwise agreed in advance)
A second reservation can be a technical inspection. The contract can only be dissolved if a technical report is submitted in which it is stated in detail that the property to be purchased has structural architectural defects. Naturally, this inspection must be carried out by a competent inspector; we can of course advise you on this.
Down payment and other fees
The purchase agreement will be signed by both parties and the buyer will make a down payment of 15% of the purchase price within 10 to 14 days after signing the agreement; to be transferred to the escrow account of the notary here on the island. The notary will take care of the further legal arrangements such as the drawing up of the title deed and the investigation of any encumbrances on the property to be purchased such as mortgages, attachments, etc.
The final account for both parties will also be drawn up by the notary. When buying real estate on Bonaire, the buyer must take into account a buyer’s fee of approximately 7% of the purchase price; this amount consists of 5% transfer tax and other costs such as notary fees and registration costs. If the parties cannot be present in person at the transfer, things can be handled through a power of attorney.
This post described the key points of the buying process. If you have other questions regarding buying real estate on Bonaire, please contact us, so we can provide additional information.