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First-Time Homebuyer? Do This, Not That.


We're Morley, a real estate company owned and operated by Bahamians with experience spanning four generations...

We're Morley, a real estate company owned and operated by Bahamians with experience spanning four generations...

Apr 22 10 minutes read

Buying a home in The Bahamas for the first time? Use this list of "dos and don’ts" as your guide.

Don’t: Rush

Your first home purchase is an exciting moment, but it’s important to not rush any part of the process. Taking your time has numerous benefits and can prevent costly mistakes. 

Shopping around for lenders instead of jumping at the first one who offers you a mortgage, for example, can save you $1,000s on closing costs and interest over the lifetime of the loan.

Meticulously going through each piece of paperwork will help prevent big problems. Skimming because you’re in a hurry could cause you to miss details and cause delays — or worse, land you in a contract with clauses you didn’t fully read. While your real estate agent has your back, and their expert eye can help you avoid this type of problem, it is best to hire an attorney to give you sound advice through the legal aspect of the home purchasing process.

Where else should you stop to take a breath in the process? The very first step - create a must-have list. Slow down and create a comprehensive picture of your dream home that includes location, size, number of beds and baths, amenities, and anything else you can’t live without. Categorize or prioritize the list into dealbreakers (things that really are must-haves in order for you to buy) and flexible items that you’d enjoy, but be willing to let go of if necessary (also called nice-to-haves). Don’t forget to include on your list the items that you don’t want to see on the property, like certain landscaping features that may trigger your allergies. Taking the time to think through every detail will ensure that you’re happy with your home purchase for years to come.

Don’t: Sign anything you don’t understand

The "heretofores", "hereinafters" and basically all legalese is complex enough to give anyone a headache, and it’s common to feel confused or overwhelmed when you’re trying to process it. It’s totally fine, understood and the reason to hire an attorney. While your real estate agent can go through the purchase agreement with you clause-by-clause to give you some comfort, it is your attorney that needs to give you the level of comfort you need and expect.

Don’t: Forget about closing costs

When you’re coming up with your home purchase budget, you likely know how much you need for a downpayment and how much you can afford in monthly payments. But as a first-time homebuyer, you might not be aware that depending on the purchase price you’ll also need an additional 8% to 10% of the home’s purchase price to cover closing costs in addition to the downpayment.

What are closing costs? They’re the fees associated with the real estate transaction itself. In The Bahamas they include items like the transfer tax (VAT), title search, your legal fees, home inspection, appraisal, mortgage committment fee and more. The seller also pay certain closing costs too which are paid by the seller out of the proceeds of the sale.

Don’t: Be afraid to walk away

FOMO (fear of missing out) can be strong during the home hunting experience but don’t jump into a home purchase that doesn’t feel quite right because you’re afraid someone else is going to snag it. You should feel 100% confident that you’ve found the home for you — the right fit, at the right price with the right terms — before you agree to buy it.

Remember those complete and detailed must-have list you made earlier? Stick to it. If you find that your budget and your list don’t align, then you can make adjustments — but don’t go for any house just because it’s available. You’re likely to live in the home you buy for several years at least, so you want to make sure it’s the right one for you. Ignore the pressure, and don't be afraid to hang in there until you find that dream home.

Do: Be realistic

Speaking of the must-have list — do you really need a fourth bedroom, or can that move into the nice-to-have category? Does the home need to be in exactly this neighborhood, or will a few streets over be just as good?

This isn’t to say that you should compromise on every item. But taking a clear-eyed look at each one and asking yourself, “Do I need this to be happy, or am I just being stubborn?” will help you narrow down the list to something manageable. One way to do this is to think of each item’s actual use. If you need a fourth bedroom because you work from home or because you frequently host guests, then it stays. But if you can’t say exactly why you want it, or you want it because you just do, consider moving it to the "nice-to-haves" part of your must-have list so that finding your home in your budget is easier for you.

Ah — the budget. This is another area where being a first-time homebuyer can be challenging. First-time homebuyers don’t have the equity of another property to fund their first home purchase, so budgets tend to be smaller—and that’s okay! But it’s important to understand the market in the area where you’re home shopping and be realistic about what you can get for the amount you have. If you’re preapproved for financing up to $500,000, you’re probably not going to have any luck shopping in a neighborhood of million-dollar homes. Additionally, if $500,000 is the average cost of a three-bedroom home in your area, you might have a hard time finding four bedrooms at that price.

Talk with your real estate agent about your budget and your expectations, and they can provide information about the market to see if anything needs adjusting.

Do: Get preapproved

You should get properly preapproved by the bank before you start your home search. Why? Preapproval: 

  • Gives you a clear picture of your budget - what amount the bank is willing to lend you and what amount you can afford to pay monthly on your mortgage payments.

  • Locks in your mortgage rate for a set period of time.

  • Lets sellers know you’re capable of and serious about buying. Effectively turns you into a "cash-buyer"

  • Speeds up your financing down the line because the bank already has your documentation.

How do you get preapproved? Start by shopping around the banks for quotes. When you’re ready to apply, you’ll need to gather a variety of paperwork which typically includes pay stubs, bank statements, a list of your monthly debts, employment verification, and identification. If any part of your downpayment is a gift from another party, you’ll need a gift letter verifying that the money doesn’t need to be paid back. You may also be asked to provide rental information and landlord references if you’re currently a renter.

Once you fill out the application, your lender will analyze your information and tell you whether or not you qualify for a mortgage. If you do, they’ll issue a preapproval letter that’s usually valid for 90-180 days. You can use this as part of your offer to show a seller that financing won’t be a problem for you — which makes your offer more competitive!

Do: Ask questions

It’s normal to have questions throughout the home shopping process, and you should never hesitate to ask. Whether it’s a complex question about real estate laws to ask your attorney, or a small detail to discuss with your real estate agent about a house you saw. Remember, there’s no question too big or too small, and the only silly questions are the ones you don’t ask. It’s important to be as well informed so you feel comfortable and confident when you purchase your home — so ask away.

Do: Look into first-time homebuyer special offers

Most banks offer financing specials for first-time homebuyers as they too want to help first-time buyers. These special offers sometimes may include favorable interest rates, a lower downpayment, or a smaller commitment fee.

How do you find them? Ask your Morley agent, frequently look at your bank's website or talk to your bank. 

Do: Hire the right real estate agent

Everyone should hire an experienced real estate agent when they’re shopping for a new home or property. Your real estate agent should find you your dream home from several options that meet your must-have list, provide you with market insight, help you make a competitive offer, and negotiate to get you the best deal. Morley agents are your guide for every step of a complex process, and you can depend on us to provide you with accurate information and help you make informed decisions on important things.

Don’t have a real estate agent yet? Get in touch. We can’t wait to help you buy your first home.

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