The process of co-brokerage (a non-automated form of sharing listings among agencies) works well in Bermuda. If you have chosen one agent who satisfies your needs and with whom you are happy, he can work with all of the other agencies on the island to show you every property available which suits your requirements.

Is My Agent Working For Me?

What Can Overseas Buyers Buy?

Looking at Properties Available

If you are working with a single agent, make sure you are being shown both his own and other agencies' listings according to your specifications.

We find that it is difficult to fully take in more than about five (5) houses or condominium complexes in a comfortable day of looking because of the co- ordination with the owners or tenants of the properties that are presently occupied. If the properties is vacant it is easier to schedule viewing appointments.

Try to give your agent comprehensive positive and negative feedback on every property she shows you... It will help to refine his sense of what you are looking for and your subtler preferences.

Touring Tips

If you have been given a printout on each house, or a written list of the properties you'll be seeing, make notes on the ones you like.

After you have let the agent know your thoughts, try to wipe out of your mind entirely any property that is not of interest. It helps to save room' for the more interesting ones.

If you are not familiar with the island, it helps to plot locations on a map, too.

Negotiation

Typically, negotiations will be conducted on your behalf by the agent with whom you are working. In complex situations, it may be helpful to set your wishes down in writing to ensure accuracy of communication.

Note: In Bermuda there is no normal 'spread' between asking and selling prices.

Building Inspection

What Happens When Price and Terms Have Been Agreed Upon?

Immediately

Before Closing

You may have to use the time between signing a sales agreement and closing the deal to secure your financing, to secure a License to Acquire Property (if you are not Bermudian - your attorney will provide you with necessary forms and instructions), or you may wish to re-enter the house to measure for furnishings, etc. These things will be determined by your needs and wishes and your agreement with the Vendor.

Immediately before closing, you may need to arrange with the telephone company, electric utility, Watlington Waterworks, cable supplier, etc. to have these services switched over to your name.

If you have development plans, it can be arranged, by agreement with the Vendor, to have drawings done and submitted to the Department of Planning prior to the closing date, if you so wish.

Closing and How Long it Will Take

The shortest time in which closings normally take place (for Bermudian purchasers) is 28 days. If you are an overseas buyer, the length of time will be determined by how long it takes the Department of Immigration to process your application for a License to Acquire Property. This can range from 6 weeks to 6 months or more, but is typically in the vicinity of 3 months. Sales contracts usually specify that the closing take place within a set time from the date of the grant of the License.

Closing Costs

You may encounter prices listed as 'gross' or 'net'. The 'gross' price is the historical standard in Bermuda and implies that the vendor will pay the agents' commission plus half of the stamp duty and half of the Conveyancing cost. The purchaser pays the other half of the stamp duty and Conveyancing cost. Some vendors prefer to stipulate in their pricing that the purchaser pay the agent's) and/or all of the stamp duty and Conveyancing cost. These variations are referred to as 'net' - (or sometimes 'net net').

Rule of Thumb

On a 'gross' price, you will overestimate your own costs if you add an additional 2.5% which includes half of the conveyance fee and half of the stamp duty (the License Fee of 22% for homes or 15%for condos - for non Bermudians - is in addition to that).

On a 'net' price, 10% will comfortably overestimate added costs which includes the responsibility for the paying both the entire conveyance fee and stamp duty. (plus the License Fee, if you are not Bermudian).

On a ‘net-net’ price, 15% would comfortably overestimate added costs which includes paying the entire conveyance fee, stamp duty, and sales commission (plus the License Fee, if you are not Bermudian)

Commission

The sales commission in Bermuda of 5%. This is established by the Real Estate Division of the Bermuda Chamber of Commerce. This is normally paid by the Vendor, but the purchaser sometimes elects to assume this cost as part of the negotiating process in a "net" offering

Stamp Duty

Stamp Duties are charged on a sliding scale: 2% of the first $100,000; 3% of the next $400,000; 4% of the next $500,000; 5% of everything over $1,000,000 (this equals $34,000 plus 5% of everything over $1million). These are normally divided between Vendor and Purchaser, but the division may be negotiated.

Conveyancing and Other Misc. Legal Fees

Conveyancing costs are on a decreasing sliding-scale. By the time the price reaches $500,000, it amounts to less than 1% of the price; it's 0.7% on $1million. The extra fees tend to run to the hundreds of dollars, so they don't add too much to the overall cost. These costs, when standard, are normally split, but the allocation can be negotiated. (If extra legal fees are incurred by either party for any reason, he will normally bear these himself).

Closing Costs Estimator

Price	Commission	Stamp Duties	Legal Fees (approx.)	Vendor’s Portion (per customary gross price split)	Buyer’s Portion
$100,000	$5,000	$2,000	$1,500	$6,750	$1,750
$200,000	$10,000	$5,000	$2,500	$13,250	$3,750
$300,000	$15,000	$8,000	$3,375	$20,688	$5,688
$400,000	$20,000	$11,000	$4,125	$27,563	$7,563
$500,000	$25,000	$14,000	$4,875	$34,438	$9,438
$600,000	$30,000	$18,000	$5,375	$41,688	$11,688
$700,000	$35,000	$22,000	$5,875	$48,938	$13,938
$800,000	$40,000	$26,000	$6,375	$56,188	$16,188
$900,000	$45,000	$30,000	$6,875	$63,438	$18,438
$1,000,000	$50,000	$34,000	$7,375	$70,688	$20,688
$1,250,000	$62,500	$46,500	$8,000	$89,750	$27,250
$1,500,000	$75,000	$59,000	$8,675	$108,838	$33,838
$1,750,000	$87,500	$71,500	$9,250	$127,875	$40,375
$2,000,000	$100,000	$84,000	$9,875	$146,938	$46,938
$2,500,000	$125,000	$109,000	$10,500	$184,750	$59,750
$3,000,000	$150,000	$134,000	$11,125	$222,563	$72,563
$3,500,000	$175,000	$159,000	$11,750	$260,375	$85,375
$4,000,000	$200,000	$184,000	$12,375	$298,188	$98,188
$4,500,000	$225,000	$209,000	$13,000	$336,000	$111,000
$5,000,000	$250,000	$234,000	$13,625 (plus)	$373,813	$123,813

What Institutions in Bermuda Provide Funds?

Mortgages may be provided by any of the following:

The retail banks: Bank of Bermuda and Bank of N. T. Butterfield
Bermuda Home
Gibbons Deposit Company
Somers Mortgage and Finance
Bermuda Savings & Loan
Occasionally by certain insurance companies
Some law firms' trust departments
Bermuda Housing Corporation (qualified Bermudians only.)

Will They Lend to Overseas Buyers?

Each institution has its own rules for determining eligibility. Some prefer to lend to prior depositors. But most will undertake to lend to overseas buyers as well as local.

What Are the Terms Normally Available?

Terms will range from 15 to 20 years, typically, with interest rates variable. Most mortgages provided in Bermuda are callable.

Development Potential

Bermuda's Department of Planning ultimately determines what can and cannot be done by way of development, however their guidelines are set out in written form. You will not be denied permission to do anything which falls within these specifications, and with the right guidance may well be permitted to do projects which fall beyond that scope. It is highly recommended that you work with an architect who has a good track record at working with the Planning Department.

Can I Subdivide?

The potential for subdivision will be governed by the zoning of the area. Non- Bermudians may not subdivide unless the portion subdivided is sold to a Bermudian and the portion retained has a qualifying ARV which is $43,800 for houses and $15,000 for Condominiums.

What Zoning Areas Are There?

Residential properties are typically zoned either Residential 1 or Residential 2. Residential 1 is higher density than Residential 2. We have a copy of the complete guidelines in our office, if you would like more specifics.

Where are the Guidelines Set Out?

Land Tax

Bermuda's land taxes are relatively low by world standards. Payable twice a year, they are calculated annually on a sliding scale based on the ARV (government- assessed 'Annual Rental Value'), not the 'value' of the property.

Other

There are no other taxes on property.

Utilities

Electricity is expensive in Bermuda. Count on spending $400/month or more without air conditioning and a pool.

Water

Every house has its own catchments area (roof) and cistern (usually below the house, itself) to supply all your needs. The smaller the cistern, the greater the likelihood that you will need to supplement that supply. This can by done through a well on the property (with a reverse osmosis system, if needed, to desalinate that supply). Another source could be Watlington Water (if you are in a location where it is available), or you purchase water from a supplier.

Building Maintenance

Costs will vary with your preferences. Houses should be painted every 5 years or so (exterior) and roofs every 2-3 years, as needed. Contractors costs will generally run in the $20/hour to $35/hour range with 'overheads' added.

Building costs are reckoned to start at about $175 per square foot. Superior quality finishes can add significantly to this cost i.e. $200 per square foot or more.

Grounds Maintenance

A gardener will cost about $20 per hour. There are numerous gardening contractors who will quote you for year-round maintenance.

What Areas Are Most Secure?

Bermuda's crime rate is low by any standard, with very petty burglaries seeming to be the most prevalent crime. Almost all of Bermuda is, therefore, relatively secure. The prime residential areas have a particularly low crime rate. These include, among others, Tuckers Town, Fairylands, Point Shares, Paget's south shore, Harbour Road, and many other sections of the island.

Do We Have to Pay a Tax When We Sell?

The vendor is typically responsible for paying 50% of the stamp duties on a conveyance. (See 'Closing Costs' above).

If We Buy a House Does It Entitle Us To Bermuda Citizenship?

No; nor does extended residence on the island.

If We Buy a House Can We Work Here?

The granting of a work permit is entirely separate from the issue of home ownership.

What Nationalities Tend to Buy in Bermuda?

The English and Canadians figure most prominently among our guest residents, with Americans and other Europeans also well represented, as well as Australians, and to a lesser degree Asians.

What Tax Benefits Do We Have (in our home country) ...?

A tax specialist with expertise in your own country's laws will have to help you on this one.

If We Rent a House Does That Give Us the Right to a Residency Permit?

Home ownership will give you the right to reside on the island. There also exists a separate document called a 'residency permit', about which your Bermuda lawyer can tell you more.

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