Is it the right time to sell real estate in Jamaica

Word in the property market in Jamaica currently is that real estate prices are at their peak.

I am an Attorney-at-Law who specializes in Real Estate Law in Jamaica and, given my recent experience in closing several property matters for both Buyers and Sellers, some insight into this phenomenon can be shed.

I have found that the Jamaican properties with peaked prices are those primarily in the middle to upper end of the market – single family homes, townhouses and commercial spaces – where existing stock is limited and new construction is low given the high and increasing cost of labour and construction. As a result, the high competition for these units which do come on the market drives up the prices.

Presently there is a shortage of these properties in the face of healthy demand. A “Sellers Market” exists – a market condition characterized by a limited inventory for sale resulting in Sellers having firm control over setting prices for properties. Indeed, a Seller’s property could attract multiple bids and it would not be unusual for asking prices to be exceeded by bids! Owners of properties have an advantage over Buyers in price negotiations and Sellers can usually sell properties quickly with a minimum of time and push back from Buyers.

In this type of market Buyers can have a hard time given increased competition for few properties so they must be prepared to act fast and, if possible, submit offers for higher prices.

Beyond the obvious though, there are a number of tactics a Buyer may employ to improve his position with a Seller.

A Buyer can submit a cash offer to a Seller which speeds up the completion of a sale. In doing this the Buyer could go further by presenting documents from a reputable financial institution as evidence of the existence of the funds that will be used to effect the purchase. Alternatively, a Buyer could submit a letter pre-approving a mortgage loan so the Seller knows the Buyer can put his money where his mouth is.

Finally, Buyers can waive contingencies that are typically put in place in Agreements for Sale allowing for the cancellation of the agreement by Buyers without penalty (such as a loss of the initial deposit paid). Such contingencies usually surround issues arising on a Surveyor inspecting the property and mortgage approval. These actions are not without risk however and Buyers contemplating such waivers should seek the advise of an Attorney-at-Law experienced in real estate matters.