Monday, April 7, 2008

Real Estate Transactions in Jamaica - Post Contract

After executing the contract and paying his deposit the Purchaser then has to work on getting the balance purchase price to hand. If he is getting a mortgage loan he must meet with his lender(s) to ensure that they send out a letter of commitment to the Vendor within the time stipulated in the contract.
The lender(s) also referred to as the mortgagee(s) will have indicated to the Purchaser certain conditions which must be met before they can commit to the loan. They will instruct the Purchaser to present information relating to:
  1. Income & Expenses – income statements must be presented to substantiate the declaration as to the amount earned; bank statements must be presented to substantiate claims as to savings
  1. Credit report – this is crucial to determine whether you are a credit risk
  1. Property
    1. Valuation report to confirm whether the value of the premises is high enough to support the investment by the lender. This is important as if the Purchaser defaults on his payments the lender would wish to recoup his investment;
    2. Surveyor Identification report – this is necessary to reveal whether there are any breaches of restrictive covenants, any discrepancies between the registered boundaries and the boundaries on earth and any other defects in title.
The issue of examining and inquiring about a property is a most important obligation of a purchaser. The rule of caveat emptor (let the buyer beware) is a rule which tells a buyer that he is to take responsibility for what he is planning to buy. Therefore even if the purchaser is buying cash he should avail himself of the services of a surveyor and a valuator to ensure that he is getting good title, good quality property and value for the money his is expending.
Once the purchaser delivers the mortgage commitment to the Vendor’s attorney he should get a statement of account to ascertain whether the loan covered all money payable (both purchase price and closing costs). If not he will have have to pay the balance before the Vendor’s attorney usually lets him sign the Instrument of transfer.
The Instrument of transfer is the document which will be sent to the National Land Agency along with the certificate of title so that the buyer’s name can be endorsed on the title.