Major Expenses to Look Out for When Purchasing a Property - Becoming an Informed Purchaser!!!!

Purchasing a property is an expensive venture and will most likely be your greatest expense. It’s important when purchasing a property that you get the property at the right price in the event that there is a need for any renovations/upgrades. Getting the property at the right price is even more important if you are looking to purchase a fixer-upper property. If the seller is unwilling to negotiate on the purchase price, then it is best you walk away from this property. You do not want to have to spend money on a house without realizing a property value increase – that is like throwing away your hard-earned dollars.

I know this list may seem exhaustive but some points might not be relevant to your property. It is however worth the read as it can save you a considerable amount of time and money in the long run. Take some time to review the below list of things to look out for when purchasing a property. If I miss anything, please add it below in the comments: -

1)    Legal Fees – If you are purchasing your property with a loan you will need to cover not only your personal legal expenses but also the legal expenses of the Bank. Ensure that you get quotations before you commit to a law firm. You can save money by both you and the Bank using the same law firm. Do not wait until the end of the transaction to then see how much these fees are as they can range between 0.5% to 1% of the loan amount. You may need to get a loan to cover this expense and this should be considered when you are budgeting for this new property. 

2)    The Condition of the Roof – Getting a roof fix is a very expensive venture. Ensure that before you commit to purchasing a property that you carry a reputable contractor with you to examine the roof. Please make sure that the contractor knows what s/he is doing because if you select someone who doesn’t have enough experience doing these kinds of checks then key things can be missed. Ensure that there are no holes where bats can enter as having them removed can be expensive and time-consuming. Yes, in case you didn’t know there are bats all over Barbados just waiting for a space in your roof to become available. They can go into your roof and cause a lot of damage if they start to bite away at your electrical wiring. Also, don’t forget that they are very dangerous to your health. 

3)    Solar Water Heater – have someone go up on the roof to check the condition of the solar water heater. Ask the seller how old the unit is as these units have a useful life of 20 to 25 years however if they are not being serviced properly this can be shorter. Turn on all the pipes in the house and make sure that hot water is running from them. If you wait until you have successfully purchased the property to then realize you need to change this unit, it can cost you as much as $5,000*.

4)    Tiling – Does the property have any old carpet or vinyl tiles that you may need to change to ceramic tiles? Check to ensure what is under the existing carpet or vinyl tiles as the cost of tiling can be considerably higher if your Tiler has to spend a lot of time (and equipment) to ready the floor for tiling. You may be able to get your house tiled for $2.75 sq. ft. but if there are old tiles under the carpet that needs to be removed this price can go up by as much as $4 square feet. The price of tiles alone can be very expensive but other material costs such as Tile Cement needs to considered as well.

5)    Plumbing – walk through the house and flush all the toilets and turn on all the pipes. Ensure they are ALL working. Plumbing issues discovered after you purchase a property can be extremely expensive. Look at the toilets in the property – remove the hoods – are they old and need to be changed? Look at the actual condition of the pipes – are they old and need changing? Are there any leaks on the property? Get a plumber to come and turn off the main pipes on the property and observe the water meter to see if it is still moving. If it is you may have a leak on the property which can result in high water bills until it is resolved. Let the owner deal with this issue first before the property is transferred to you or the purchase price adjusted so that you can afford to address the issue.

6)    Cleaning – do not underestimate the importance of this cost. If the house will require industrial cleaning this can be very costly. Are there windows with security bars? Having these cleaned will cost more. If the property has two levels – then reaching certain areas to clean will result in a higher bill. Make sure you walk through and observe the condition of the bathrooms and the other rooms in the house.

7)    Curtain Rods & Chandeliers – ask the owner if the curtain rods and light fixtures will be left in the house after the purchase. If the owner is not leaving them then this cost needs to be taken into consideration when purchasing the property. This cost becomes bigger based on the size of the property and can be ignored if there are few windows in the house. Are there old chandeliers or light fixtures that require changing? Make sure you also budget for this as chandeliers can be expensive to purchase and install. When purchasing chandeliers observe the height of the roof – you do not want to purchase chandeliers that are not suitable for an area in the house that might have a lower ceiling.

8)    Fencing - observe the condition of the fencing – does it need fixing or changing? Make sure you budget for this cost and also consider it in your offer price. Fencing can cost as much as $4K to install or fix.

9)    Removal of old & not working fixtures – does the owner have any old antennas (huge ones) installed in the ground that now need to be removed? Ensure that you ask a question about the expense of removing these items. They may also have other things on the property that need to be removed – make sure you consider this cost in your purchase price/ budget.

10) Painting – observe the paint job on the property. Does it require painting? Look at the burglar bars do they require painting? Is the paint colour standard or customized? Customized paint costs more money and is harder to match back if you need to do a paint job. If you are looking to change the colour of the house understand that you will be required to do two coats of paint which is more expensive. It becomes more expensive because you will need to purchase more paint and also your Painter will charge you more as his labour will increase. Understand this expense as it can be a big-ticket item in your renovation cost. This cost can be up to $5,000 - $26,000 depending on the size of the property (could be even more) and if you decide to go with a contractor.

11) Utility Issues – ask the current owners and neighbours about any utility issues in the area. Is the water always off in the area? Does the property have a water pump? Is electricity always going off? Does the property have solar panels? Is garbage regularly collected from the area? Make sure you ask someone other than the owners as you must always keep in mind that you and the current owners have two conflicting objectives. You want the property at the best price so you can perform any needed changes to your likings. The owner wants the highest price for his property.

12) Outstanding Statutory Charges – make sure that the current owners do not have any statutory charges outstanding over the property (e.g. outstanding NIS payments, PAYE, Land Tax, or water bill). If any of these expenses exist under the owner’s name, then these expenses become legal charges over the property. Although this cost is the responsibility of the current owners this can hold up the sale of the property and needs to be considered especially if you are renting a property while waiting for the sale of the property to close. Make sure you understand how this expense will be paid BEFORE you gave your deposit. If the owner does not have the money to pay these expenses how will it be paid? Will your bank allow the funds to be taken from the mortgage proceeds? I would recommend that the owner shows you evidence that these expenses have been paid before you make your deposit on the property. The main reason for this is that Barbados’ legal system is very slow and if you have any issues after paying your deposit it can take years before you can successfully either get your deposit back from the owners or sue the owners for any inconvenience/expenses you incurred due to their inability to meet the closing date on the Sales Agreement. Speak to your attorney and banker about this BEFORE you give your deposit. 

13) Customized windows and doors – bring a carpenter with you to the property to understand the number of customized doors or windows on the property. If these need to be changed, it can cost you a considerable amount of money if they are not standard doors or windows. Additionally, in order to change a customized window in Barbados, it can take as much as 3 weeks to have one built. All this needs to be considered especially if you want this work done before you move into the property for various reasons (e.g. you may have allergies that will prevent you from being in the property while this work is being completed). Customized windows and doors can cost you twice as much as the standard ones.

14) Mason Work – observe the property is there any mason work that will be required? Are there any windows or unsightly decorative holes in the property that you will like to be removed? Make sure you take this cost into consideration when completing your budget. When it comes to mason work one of the most expensive things is the cost of cement and labor - make sure you understand from an experienced Mason how much material will be required to complete a job. You also need to understand the length of time required to complete the job if your Mason is charging a daily rate.

15) Electrician work – If the electricity on the property has been turned off then you may be required to rewire the entire house which is not a cheap venture. Rewiring a property can cost you as high as $20,000 not to mention you need to make sure you have an experienced electrician to ensure that you meet the requirements in order to pass the inspection. Ensure when you are walking through the property that you are turning on all the lights. If all the lights cannot be turned on ask a question. Make sure you understand where all the light switches on the property are located. Does the property have enough capacity to install air conditioners or any additional electrical items you will need to use (e.g. are there any 220 volts in the kitchen?). Is there an electric garage door – does it work? Will it need changing?

16) Landscaping requirements – what is the condition of the surrounding property? Do you need to have it landscaped? This is not a cheap venture and needs to be taken into consideration when purchasing a property. You will be surprised at how quickly an $8 plant becomes a great expense when the area requires up to 20 or 50 in order for it to create the desired garden hedge.

17) Main Gate – does the property currently have an entrance gate? Will it require one? What type of material is the existing gate made of? Does it need changing? Will you like to replace it with a metal gate? Make sure you understand the cost of replacing or repairing existing gates on the property. The main gate in Barbados can cost you up to $10,000 depending on the size and material. If your property is located close to the beach, then the type of material you can use might be limited due to the sea salt sprays that quickly damage certain types of material.

18) Reputation of the surrounding neighborhood – ask questions and do research on the area where the house is located. Are there a lot of robberies or criminal activities? Will you need to have security bars installed on the property? Will you need to install cameras or have security dogs? Ensure you understand the issues of the area as you do not want to be surprised at the end of the sale process. You could ask the current owners but I also suggest that you do your independent research as well.

19) Availability of the owners after the purchase – It is important that the current owners are reasonable and understanding. As you move into the house and make your way through it you may at times need to contact them to ask questions about the property. Questions such as where something is located e.g. the solar water heater valves? Ensure that the current owners are reasonable people that understand this and wouldn’t give any issues if they are required after the sale closes.

20) Encroachments – Are they any encroachments on nearby properties that need to be fixed before or after the sale of the property? Please make sure you understand this issue as this can also result in a significant delay in the legal process if your property encroaches on nearby land or if a nearby one encroaches on your property. Some financing institutions will require that you have this fixed before the sale can be finalized. Some financing institutions will not move forward with the loan if encroachments exist – ensure that you have a land plot that clearly outlines any issues BEFORE you give your deposit. You would be surprised as to how many properties in Barbados have encroachments. Also, remember this for when you are doing any future work on your property, ensure that you keep within your property border lines.

21) Property Line marks – Ensure that you understand where the property line marks are and that they are clearly labeled. Some owners are not even aware of where their property begins and ends. Ensure that you see clear labels of this before you commit to purchasing a property. Also, ensure you observe any foot movements (pathways) on the property. Is your property being used as a “short cut” for unsightly visitors? Is there a walking path that will cause issues when you move into the property and decide to enclose?

22) Customized curtains – this might seem small but it also needs to be considered. The standard curtains lengths tend to be between 74 to 80 inches. Ensure that you observe this need in the house by measuring the length of the windows throughout the entire house as some areas can require standard ones while other areas require customized ones. Understand this cost and budget for it in your expenses. 

23) Rental of garbage skips – if the property requires a lot of work then you may need to rent a skip which can add up over time if it has to be on the property during any required renovations. Make sure you understand this cost. In Barbados delivery is usually $190 for a large skip with a daily rate thereafter of $10 a day. Make sure you budget for this cost based on the proposed length of the time for the renovations.

24) Location – visit the property at different times during the day to truly understand any traffic jams/ issues that might exist nearby. How long does it take for you to get to work or to drop the children off at school? Is the time frame reasonable and something you can see yourself doing over the next 25 to 30 years? When the children get bigger will they be able to easily get back and forth to the property by public transportation? Are there any unsightly “limers” in nearby properties that can cause security issues? I remember visiting a lovely property at 12 pm during the day and observing two young men smoking and drinking in a nearby abandoned property. If you are comfortable with this situation, then this will be acceptable to you but this article is here to allow you to be an informed purchaser. You need to know exactly what you are purchasing. Are there any large housing developments being built nearby that can potentially worsen any current traffic conditions?

25) Water Tank – if there is a water tank on the property ensure that the existing size can satisfy your family. Will the size of the water tank cover you for the average amount of time the property location tends to be without water? Also, make sure that the current owners were servicing the water tank i.e. having it cleaned. Do not go into a new house and just start using the water tank without checking the condition of the water in the tank. You can make yourself very sick. Do you need to also install an additional water tank for the general cleaning of the yard or your cars? Ensure that your budget includes this as well as the installation of a new water tank with a pump (to allow for the correct amount of water pressure) can cost you up to $3,000.

You might not be able to get an adjustment in the purchase price for all of the costs listed above. Some listed items above can be seen as personal preferences that you do not need to do in order for the property to be in livable conditions. However, you know what you need to do to the property in order for it to be to your likings and therefore you need to budget accordingly. If the owners are not moving on the purchase price walk away from the property. I know sometimes you may fall in love with a property and try to compromise but understand that this property will be with you for years! Compromising now can be a big mistake in the future.

 *All cost mentioned in this article was relevant for the time period 2021 but is subject to change with any price changes.