The buying process in Cayman

Cayman Islands real estate has a magnetic charm, offering sun-soaked days and island living without compromise. It’s a lifestyle everyone wants and a market everyone wants to get in on. So, while island living might be laid back, the competitive market can make investing here daunting. Not knowing the buying process, potential hidden costs or the right questions to ask can feel overwhelming and stressful. To help, let’s shed some light on the secondary purchasing expenses beyond the property price and walk through the buying process. The key information you’ll need to make an informed property purchase in paradise.

Silent Costs and Budgeting for a Home in Cayman:

Let’s dig into the additional costs associated with property purchases that you should be aware of. On top of the purchase price, you’ll need to budget for property stamp duty, deposit, mortgage stamp duty, and legal fees.

Stamp duty is charged at a fixed rate of 7.5%, which applies to the purchase price or the Surveyor’s property valuation, whichever is greater. It’s important to note that first-time buyer exemptions only apply to first-time Caymanian buyers and properties below a specific threshold.

If you’re considering financing, the minimum down payment on a primary residence is typically 10% to 15% of the purchase price for local residents of Cayman. International buyers and properties that are not the borrower’s primary residence are considered riskier, so the deposit required may be closer to 30% and subject to higher interest rates. Use our mortgage calculator to get a quick estimate of how much you could borrow.

Another expense to remember is the stamp duty charged on your mortgage. The government charges 1% for loans under CI$300,000 and 1.5% on anything greater. It is essential to remember that stamp duty is paid in addition to your down payment and is not financed. The only scenarios in which stamp duty or other fees may be financed are: if you already have equity in a home, own property, or contribute a larger down payment than your bank requires.

Budget between 0.5% to 1% of the property purchase price for legal fees.

These costs and property upkeep expenses should be factored into your budget to avoid overextending yourself. A basic rule of thumb is to budget an additional 10% to 12% of the purchase price for closing costs.

Step-by-Step Guide to Buying in Cayman:

1. Get Pre-Approved: Begin by contacting at least two banks to get the best rates and terms for your mortgage. This step will help you understand your borrowing capacity and streamline the search and purchasing process. To help you get started, I’d happily connect you with the local mortgage advisors I recommend. Just send me a quick email, and I’ll make the appropriate introductions.
2. Connect with an Agent: It’s time to shop! Location, bed and bath count, dwelling type, a stratified community, or personal property, there is a lot to consider. Let’s discuss your must-haves and start the exciting search process.
3. Viewings: Once we’ve narrowed down the options, we’ll schedule viewings and gather any preliminary information on the properties that will help with the decision-making process.
4. Make a Written Offer: With the guidance of your real estate agent, submit a written Offer to Purchase with identification. As your agent, I will assist you in determining the best offer price based on market conditions and negotiations with the seller.
5. Add Conditions to the Contract: I will also help you add necessary conditions to Clause 5 of the contract. Examples include home inspections, obtaining financing, property valuation, and reviewing strata documents. These conditions ensure your interests are protected and allow for due diligence.
6. Prepare Deposit Funds: Once the offer is accepted, you will be required to have deposit funds ready to be placed into the listing broker’s Client Trust account until the closing or completion of the transaction.
7. Fulfil Conditions: It’s now time to work through the conditions outlined in the contract. I will guide you through this process, ensuring that necessary inspections, valuations, and other due diligence are completed. If the property is within a strata, a common condition included is buyers’ access to the strata information. This could include the AGM meeting notes, rules and bylaws of the complex, current financials, and the building insurance cover note. The seller’s listing agent will provide this to fulfil this contract condition.
8. Waive Conditions: As the agreed-upon dates approach, you may need or choose to waive conditions once satisfied with your due diligence. However, if necessary, I can also assist with requesting extensions from the seller to provide you additional time without termination of the agreement.
9. Mortgage Approval and Documentation: Your mortgage broker will provide you with a list of documents required for approval. It will vary from bank to bank and on whether you get paid a salary, commission, or self-employed. Ensure that you promptly provide the necessary information to expedite the process, which can take up to six weeks. 
10. Attorney Involvement: Once you have mortgage approval, your bank will assign an attorney to complete the Transfer of Land document. You can select your own attorney if you prefer or are not obtaining financing. Either way, your attorney, real estate agent, and the seller’s attorney and agent, will work together to finalise the deal. This process typically takes 30 to 45 days. Without proper support, the closing period can feel long and stressful, but as your agent, I will be there every step of the way.
11. Strata Fees: You will receive a “Section 6.4” document stating any outstanding strata fees to be settled at closing. This would include any pro-rated reimbursements to the seller or advanced payments required from the buyer for items such as special assessments. These items would all be uncovered during the fulfilment of the contract conditions.
12. Property Walk-Through: Before the day of closing, you can request another walk-through of the property. This visit ensures everything is in order, verifies the property’s condition, and all agreed-upon chattels are present. I highly encourage my clients to do this and happily attend with them.
13. Closing Day: The big day has arrived. You now own a home in paradise! On closing, you will receive the keys and a copy of the Transfer Documents from your attorney or real estate agent. These documents are necessary to set up accounts at the relevant utility companies, such as CUC and Cayman Water or Water Authority. Top Tip: Try to avoid closing on a Friday to ensure you have sufficient time to make account applications to transfer utilities. If this isn’t possible, see if the previous owners would be willing to extend utility coverage over the weekend. A written agreement can be made between the buyer and seller to cover any incidentals.

Purchasing real estate in the Cayman Islands is exciting but can quickly become overwhelming. It’s essential to stay informed throughout the process. By considering all costs, budgeting appropriately, working with a knowledgeable agent, and following the step-by-step guide, you will feel in control of your property journey.

I’m here for your questions and to help make your buying process seamless. I’d be honoured to assist you in making your Cayman property ownership dreams a reality.