Buying Property
Foreigners are allowed to own up to one property of 3,000 square meters (approximately 0.74 acres) of land in his or her own name. For larger properties or for mor than one property, this can be done through a Honduran corporation. Two or more people buying one property in their names cannot buy another – the property counts as the one property allowed for each of them. If two people want to own two properties without forming a corporation, then they would buy one each, and not one together.
A Honduran corporation for holding properties is a legal entity established in Honduras to own and real estate or other assets. The corporation itself owns the property, not the individual shareholders or members. Properties held in a corporation are separate from the owners’ personal assets, providing a layer of legal protection. Shares of the corporation can be sold or transferred instead of transferring the property itself, which can simplify the process and reduce taxes.
Financing through a Honduran bank is extremely difficult for a foreigner, interest rates are high and requirements are demanding. Most foreigners who buy here make cash purchases, either from savings, personal loans, home equity, and retirement savings – some retirement plans let you invest in real estate. Sometimes and seller will finance – this usually requires a large down payment, a short payoff period and high interest rates. But financing terms is part of the negotiation and sellers who finance may be less negotiable on price.
If you decide to finance the sale of your property, you have two options. One way is though a mortgage, the other is through a promise to sell. The difference between the two is that in a mortgage, the property gets transferred to the new owner, with a lien against it. In the event of a default, the seller can foreclose on the property. In a promise to sell, is an agreement to sell in the future; the price and conditions are sent at the signing of the promise to sell, but the transfer of the property is done when the conditions of the sale have been met.
Buyers pay the closing costs in Roatan, which include transfer taxes, a municipal certification and site inspection fee, registration fees, stamp fees, a security tax and lawyers fees. The total can run up to 6% of the sale price. As a buyer there will other expenses; you’ll need an RTN number – this is similar to a social security number under which all the taxes will be paid. There will be incoming wire fees for the payments sent, a fee to transfer the electric account to your name, if needed, and a security tax. And lastly, there may be prorated amounts for taxes, electric, and other services the seller paid in advance.
The first step is research – how much do you know about Roatan? Are there locations you like more than others – do you want a waterfront property, a property with beach access, or a property with a view – Roatan has some of the best ocean views in the Caribbean. Then find a realtor, preferably one in the RRA – Roatan Realtors Association. RRA members have a code of ethics and are members of the National Association of Realtors. RRA brokers are members of the Honduran Real Estate Chamber of Commerce which has it’s own code of ethics.
You’ve been working with your realtor and you’ve found the prefect property. You’ll work with him to put together an offer, which your agent will present to the seller’s agent to submit to the seller. The seller may accept, reject or counter your offer, and his agent will get back to your agent. Negotiations can go on until either an agreement is reached or one side decides not to continue negotiations.
Congratulations! The next steps for a buyer are fairly straight forward. Typically you will have seven days to send a deposit – we don’t ask for a deposit with the offer, only when the agreement is reached. Once the deposit is received, the property is marked as pending and you can start looing for a lawyer – your agent will have lawyers they can recommend. You and the seller will have the time to meet the contingencies you and / or the seller have agreed to in the offer, if any. You’ll provide your agent with your identification, if you haven’t done it when you presented your offer and your agent will start the process of getting your RTN numbers. The only thing then
Selling Property
A seller is responsible to have all his paperwork ready to sell a property. He needs to have his ‘escritura’ or title, and if the property is in a corporation he needs the corporate documents in order to list his property for sale. He’ll also need his RTN number, legal identification, and copies of paid taxes and HOA fees if any. Once a deal is agreed upon, the seller needs to provide a survey and catastral certificate issued by the municipal, less than one year old. The seller’s agent will provide all these documents to the buyer’s lawyer through his agent. If the buyer’s lawyer finds issues in the paperwork, it is the seller’s responsibility to have them resolved.
There are many things you can do to prepare your property for sale that will attract buyers and fetch the best possible price, and here are a few…. Clean and declutter; remove excess items, personal belongings, and unnecessary furniture to make spaces look bigger and more inviting. Organize storage areas. Make repairs and improvements. Enhance curb appeal; trim bushes, mow the lawn. Ensure the front door and exterior are clean and welcoming to create a great first impression. Ensure everything works; check that appliances are working and faucets and shower heads don’t leak. Prepare the home for showings; open curtains and blinds to let in natural light, turn on lamps in darker areas, and eliminate odors.
Questions About Roatan
Crime rates in Roatán are generally lower than in mainland Honduras. Petty theft can occur, especially in crowded areas or beaches. Violent crime is less common in Roatán compared to the mainland, but it’s still advisable to avoid isolated areas and be cautious at night. But like anywhere, keep an eye on your surroundings, and keep valuables secure.
There are many good contractors on the Island, and finding one is easy. Ask for referrals and follow up by visiting some of the houses they built. Depending on their schedules and the availability of materials, construction can take a several months to a year or more.
Yes, there are several furniture stores and department store on the Island. Some shop in La Ceiba and San Pedro Sula on the mainland and have furniture shipped to the Island. And some buy things in the US and have it shipped ocean freight. Newly constructed homes and condos are unfurnished, but may come with appliances. Properties being resold are usually sold furniture included.
Many people rent their properties in Roatan. The revenue can offset the costs of keeping the house, and some rental units make a profit. There are some good property management companies that can manage the property and the rentals. Most developments that do not allow businesses run from homes on the grounds, also allow rentals.