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The first thing you need to look for when buying a real estate property not only in the Cayman Islands, but anywhere in the world, is the presence and effectiveness of real estate regulations. In the Cayman Islands, real estate regulations are designed to protect both seller and buyer and to meet your standards and expectations. Due to the popularity of the Cayman Islands and the continuous growth of its real estate industry, the government and real estate agencies streamlined the standards in selling, marketing, and purchasing real estate properties in the country.
Real Estate Licensing System in the Cayman Islands
The Cayman government currently has no formal or specialized licensing system to endorse real estate agents and companies. Real estate agents or companies that are at least 60% owned by Cayman residents are required to submit and comply with other additional requirements given by the government.
“Know Your Client” Policy
Real estate agents do not only have the obligation to market and sell properties. They also have to comply with the regulations set by the government with regard to illegal activities. They should help in preventing money-laundering activities, terrorist financing, and other illegal or criminal interests.
It is also a policy in the real estate industry that a real estate agent should implement a “know your client” procedure. The real estate agent will evaluate the background and verify all the information given by the potential buyer to check on the character and to verify the source of funds of the potential buyer.
Foreign Ownership
The Cayman Islands do not enforce any strict regulations concerning foreign ownership of real estate properties within their territories. The land title system used is known as the Torrens title system - the simplest and widely-used system. Oftentimes, the standards enclosed in the provisions of the Torrens system are also used as guidelines and regulations in purchasing real estate properties.
Raw Land in the Cayman Islands
Raw land in the Cayman Islands is a popular investment because it is maintenance-free. If you are interested in real estate properties in the Cayman Islands, you can always refer to the magazine published by Cayman Islands Real Estate Brokers Association (CIREBA). Inside the magazine are available properties that are up for sale in the Cayman Islands. All other information such as the price, available amenities and the contact details of the real estate agent or broker are also included.
Overview of Purchasing Procedure
Once you are have decided on which real estate property to purchase, you should get in touch with your real estate agent who, in turn, will inform you about how much downpayment is required and what the subsequent payment scheme is.
Paying a deposit, which is usually 10% of the total property value, is a standard regulation in the Cayman Islands. You should settle the payment within seven days after going into the contract. The closing period is placed at thirty to ninety days. The only significant closing cost will be the stamp duty which is equivalent to 6 to 7.5% of the property value. This stamp duty is paid to the government within forty-five days after closing in order to carry on with the transfer of title to the buyer’s name.
The Cayman Islands Offers Financial Assistance
Assuming that you do not have enough cash to make the purchase, you may borrow or file for financial assistance from banks in the Cayman Islands. The standard finance term is 25-30% downpayment and the terms are usually between 10 to 15 years on a rate of prime plus one. The collateral shall be the real estate property that the buyer is purchasing. The bank will also require proof that the buyer has the capacity to make the necessary payments.
If you have spotted that piece of land in the Cayman Islands that you want to own, then prepare all necessary documents, double check availability of funds and look for the right real estate agent. Soon you will be the proud owner of that beautiful home in the most dazzling place in the Caribbean.
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