Ringer
Reged: 01/24/03
Posts: 65
Loc: St. Louis, MO
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Jeff,
I think this is a topic that many board members would be very interested in finding out more about. Vladimir has already expressed an interest on a previous post. Maybe you could lay out the process in broad terms and then we could start peppering you with questions.
Thanks, Dave
P.S. Both my wife and I are from Hillsdale, MI and went to school at UofM and EMU.
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SteveH
Reged: 02/02/03
Posts: 36
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Dave,
The first thing to consider when making an offer to buy is the unfavorable exchange rate.
There is a tax of 7% on existing structures more than, I believe, 5 years old, and 10% on land and new construction.
The banks require a 50% down payment, and a life insurance assignment for the total outstanding mortgage. Be careful here, not all US companies will assign to a foreign bank!
The process takes up to six months from accepted offer to closing if you are using bank financing. Not a time frame we americans are used to!
Please don't hesitate to email with any specific questions you may have.
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stbartslover
Reged: 02/09/03
Posts: 874
Loc: Ann Arbor. Flamands Blue
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My wife and I vacationed in St. Barts for years and fortunately she was supportive of my idea to buy a place there. We wanted something we could use ouselves and rent the rest of the time to sort of break even a little... We looked for a couple of years. I liked a place in Marigot, she prefferd one in Flamands-- so we bought the Villa we both love on the Flamands hillside (a little out of our price range - that required a LOTS of tlc) and within walking distance to the pretty beach there.
That was in '99, and so far, I'd say it's been equally divided between fun and challenge. I enjoy either doing or aranging much of the maintenance work myself to get and keep the Villa in sterling condition, and we're on Island 3 or 4 times a year.
The purchase process is fairly daunting (even for me, a general contractor and property manager) that is not for someone who expects things to move quickly or exactly like you thought. My Mothers's family in Europe has been in property business since the 20's, so owning something overseas was not something I viewed as formidable. We would have been able to finance the purchase through a French bank but instead choose to do it through connections in Florida who specialize in the Caribbean.
As there are no rules that are easy to understand like in the US, I'd advise purchasers to be very careful who you choose to represent you. Items we take for granted in the States like truth in lending, seller's disclosure, a title policy, mortgage survey, and MANY others simply do not exist in forms we are familiar with back home.
The entire process takes about 6 mos to a year, and goes something like this:
select a property
have a purchase agreement (called the compromise) drafted (then translated) & explained ---one of the hard parts...
make a 10% deposit
obtain financing
review the doccuments
come up with funds -- converted to Euros.
have everything explained again
attend a "closing" (or whatever the French name was), and
voila, you own a place in St. Barts!
you can see our place @ www.stbartsvilla.com
Jeff
ps invite us out to say Eden Rock for dinner, and over a good bottle of Bordeaux and I'll be happy share more than you want to know about owning a place on SB.
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Anonymous
Unregistered
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In reading information provided to you from posters, I noticed that an important detail was missing that you need to know before you do anything else...seek the advice of an attorney who is familiar with French and American laws. We hired Chantal DeCombe in Gustavia, and it was the best money we could have spent in the process of buying a house on St. Barths. Her number is 011 590 590 27 85 79.
Chantal is French by birth, educated in the U.S. She is licensed to practice law in both countries. Yes, she is fluent in English. If you didn't know that she was French, you would think she was an American.
This is the really big tip: French inheritance laws are worse than those in the states. There is a special corporation that can be formed to avoid this problem, "SCI". As a result of having Chantal involved as soon we were serious about buying, the mystery was all but removed. We ended up buying directly from the owner who lived in Grenoble, Fr. And, who knows, maybe saved a few dollars by the time it was all said and done. An attorney must represent your best interests (that is what she is hired to do). I don't know if I would put 100% of my faith in someone's opinion who stood to make a big commission if the property were to sell. We are from the Midwest and are very conservative; but at the same time, know when it is time to part with some "green backs" to save our backsides later. Think about it.
Involve your attorney of choice before making a purchase offer. And, some parting thoughts:
1. Remember, you can not change your view or the neighborhood. If you have any intentions of renting the house while you're not there, you must have a pool and a good view. Don't think that you'll be able to put in a pool as easily as in the states...a pool permit is difficult to obtain and can take a while, if not forever. This is the voice of experience speaking here!!!
2. There are many things that you can do to a house as long as it is stucturally sound. And there are termites in St. Barths, have that inspection done!
3. An appraisal can be done on the island for about $3,500 USD...that is a lot of money for someone's opinion; you end up having a piece of paper with a dollar amount on it. That's it. Shop around with a realtor or even by yourself. You'll get a pretty good feel for what the properties are worth.We looked at the good, the bad, and the roofless!
4. MOSQUITOS...are a fact of life in St. Barths. They are typically found in low-lying areas, near the beach or not.
The higher elevations are better for this problem as long as there is a constant breeze.
Have fun in your pursuit. It is worth the effort.
Lib T.
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Ringer
Reged: 01/24/03
Posts: 65
Loc: St. Louis, MO
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Wow! It definitely is a much more involved process than I envisioned. Thanks to all for the input.
I guess the bottom line is that for those who have bought, has it been a good investment?
Thanks again, Dave
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Kat
Unregistered
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Thank you for the detailed information. I have one more question which is whether an American can deduct the interest from the mortgage on a property in St. Barts? Thank you.
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stbartslover
Reged: 02/09/03
Posts: 874
Loc: Ann Arbor. Flamands Blue
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Yes, you can deduct interest on your IRS schedule C, however, consult your own acountant regarding all the details of a SB transaction, first. Of course find someone very qualified (I would interview several) on the Island who is a licensed French attorney (or Avocat) to represent you---they are listed under "Directory Guide to St. Barth"--which is in English too.
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Ringer
Reged: 01/24/03
Posts: 65
Loc: St. Louis, MO
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JeffM,
Sorry about all of the questions. I hope you don't mind answering a few more when you have a chance.
1) Has your villa held its value since you purchased it?
2) In general, how have the real estate values been the last 5-10 years on St. Barts?
3) Typically, what sort of monthly or annual expenses do you have with a villa?
4) How many weeks (on average) per year are you able to rent your villa?
I really appreciate your time and input.
Thanks again, Dave
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bbdesoleil
Reged: 02/01/03
Posts: 24
Loc: centreville, delaware
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Sorry for the late post. I actually just ventured over to this part of the website.
We also have been considering and doing a fair amount of research on a property purchase on the island. The information I have seen on previous posts coincides with the info I have gathered to date. Thank you to all who have taken the time to educate me.
Another item I would like to add for discussion is the idea of an on-island caretaker. I have been told that there are people who provide this service of maintenance, cleaning, and overall daily(weekly) observation. Does anyone have personal experience with this service and opinions good or bad of this service. Unfortunately, we are not able to live on-island full time and care for a property ourselves.
Thanks
Dan
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wbennett
Reged: 07/19/07
Posts: 2
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Good Afternoon,
Beautiful Villa by the way. Your discussion interested me because I have a client who owns his Villa free and clear. We are trying to refinance it and get him some cash but I am struggling with lenders who will do business there. You mentioned that you used a connection in Flordia, do you have any advise or names and numbers to start heading in the RIGHT direction? Thank you for your time and cooperation.
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