First and foremost, the process of buying real estate in the U. S. Virgin Islands is in all the essential elements, the same as the process in the continental United States;
- A title agent will search the title to insure all releases are secured by the time of the Closing and your title to the property is free and clear and, your deed will immediately be recorded at our Recorder of Deeds office following the closing
- Title is held fee simple, full ownership on residential properties*
- Offers are generally made contingent on a structural inspection and there is an absolute right to cancel the contract thereafter if done within the prescribed time frame (usually must be completed with 10-14 days of contract)
- Offers may be made subject to a financing contingency and final commitment but Sellers frequently require that Buyers be pre qualified by a lender before submitting their offer so it is best to connect with a VI Lender before beginning your search. Pre-qualifications can be obtained in a day or two once they have your information. Loan commitments generally can be secured in 45-60 days though FHA loans require more time
- Either an attorney or the Realtor will hold the Buyers’ escrow deposit until the time of closing; customarily the deposit is $1,000 or more at the time of the offer and is increased to 10% within 10-14 days of Contract
If you are securing a loan, there will be an attorney hired by lender to handle the closing. This is an expense borne by you, the Buyer/Borrower. This attorney can go over closing documents with you and can answer your questions but they actually represent the lender. In general, your interests and the banks are the same, i.e., clean title to the property, documents in proper order and promptly recorded etc. but it is a distinction that you should be aware of. **
Other buyer expenses include title insurance, cost of the appraisal and other bank fees, cost of structural and pest inspections and a portion of the surveyor fees if you are buying land or a home (referred to as an as built survey it checks for encroachments). As occurs in the continental U.S, local jurisdictions are paid a ‘transfer fee’ when properties are conveyed. In the Virgin Islands, it is referred to as the Stamp Tax and is a negotiable item which can be paid by either Seller or Buyer or paid 50/50. It is paid on the full value of the sale on a sliding rate scale by value of the property, e.g., on sales $250,000-$999,999, the Stamp Tax is 2.5%; at 1M it goes to 3%.
*Commercial listings may be leasehold, i.e., they are selling the business and its assets including the lease but not the real estate. Fractional ownership, i.e., time shares or vacation clubs may or may not be fee simple ownership
**We are considered an “attorney state”. Attorneys vs. escrow companies generally handle closings
Essential resources and tips to help you purchase real estate in the United States Virgin Islands.