Understanding Seller Financing for Foreign Buyers in Belize

Overview

• Session Focus: Understanding seller financing for foreign buyers looking to own property in Belize, specifically in San Pedro or Key Cocker.
• Context: Traditional bank financing methods common in North America are not standard in Belize.
• Location: Key Cocker, co-listing a new condo project with Premier Realty.

Belize Real Estate Landscape

• Size & Population: Belize is about the size of Massachusetts with a population of ~400,000.
• Diverse Regions:
  • Ambergris Caye: Main destination for foreign property buyers, generating 70% of tourism revenue.
  • Cayo District: Known for jungles, Mayan ruins, and natural attractions like Mountain Pine Ridge.
  • Key Attractions: The Blue Hole, cenotes, and waterfalls.

Benefits of Owning Property in Belize

• Titled Property: Foreigners receive title to property, ensuring security and ownership.
• Low Taxes:
  • Property tax: ~$100-$150/year for a standard lot.
  • Income tax on rental property: 1.75%.
  • 0% capital gains tax.
• Easy Estate Planning: Property easily passed to heirs without needing to be in a company.

Financing in Belize

• Cash Market: Real estate market primarily cash-based, contributing to market stability.
• Financing Options:
  1. Seller or Developer Financing:
     • Terms: ~50% down, 3-5 year term, 8-10% interest, no prepayment penalty.
     • About 20-25% of sellers offer this.
  2. Line of Credit/HELOC from home country banks.
  3. International Bank:
     • Key International Bank in San Pedro offers 50% down, 10-year term, 11% interest.
     • Not available for raw land.

Seller Financing Process

• Process Overview:
  1. Offer to purchase completed by realtor.
  2. 10% earnest deposit placed in escrow.
  3. Promissory note completed by closing company.
  4. Monthly payments begin month following closing.
  5. Title transferred once property is paid in full.

Costs and Considerations

• Buyer Costs:
  • Closing costs: ~10% (8% stamp tax, ~2% closing fee).
  • Additional fees: Charge fees, escrow costs, wire fees, FedEx fees.
• Seller Costs: Commissions for both agents, FedEx fee.

Risks and Recommendations

• Non-Payment Risks: After ~45-60 days of non-payment, seller can reclaim property.
• Payment Logging: Ensure all payments are logged and confirmed in writing.
• Backup Contact: Have a secondary contact for payments.

Current Financing Opportunities

• Various Properties Offering Seller Financing:
  • 7 opportunities highlighted, varying in location and terms.
  • Examples include Platinum Point, Fisherman's Cove, and Ruby Villas.
• Interest Rates & Terms: Typically 8-10%, with different down payment and term lengths.

Conclusion

• Contact Information: For queries, email [email protected].
• Presenter: Rachel Jensen, broker-owner, with 13 years in Belize real estate.
• Final Advice: Clearly communicate financing needs to ensure suitable property options.