Virgin Islands (U.s.)
Real Estate Practices in US Virgin Islands
Overview of US Virgin Islands Real Estate Practices
The Virgin Islands, geographically formed of sedimentary rock and undersea lava flows, are located in the beautiful waters of the northern Caribbean. Surrounding the four Virgin Islands of St. Thomas, St. John, St. Croix and Water Island are 50 small, mostly uninhabited offshore islands and cays.
The Real Estate Market in the US Virgin Islands
The real estate market includes houses, land, condos, time share/fractional ownership and commercial properties. The greatest concentration of properties is in the $500,000 - $1.5 million price range, however each island is difference. Real estate on St. John is the most expensive, followed by St. Thomas and then St. Croix. Prices on Water Island are most closely aligned with the price points for property on St. Thomas. The typical size of a lot in the VI ranges from more than a quarter acre to a half acre.
Most buyers finance their homes almost exclusively through conventional mortgages with local banks. Flagstar Bank based in Michigan is another lender licensed to provide loans in the VI and is a frequent alternative to local banks, accessed through local mortgage brokers. Interest rates are slightly higher in the U.S. Virgin Islands than in the U.S. mainland. Down payments range from 3.5 percent to the standard 20 percent, and banks require windstorm insurance with mortgages.
Land is available in all lot sizes from less than a quarter acre to a dozen acres-plus. Factors to consider when looking for land to build on include the view, the slope of the property, access to the property and any site preparations that might be necessary in order to build. Costs of building a house start at around $200 per square foot. All plans must be approved by a licensed U.S. Virgin Islands architect or engineer and permits, which can take 4-5 months for approval, must be obtained prior to the start of any construction. A cistern for water storage and a septic tank are necessary components of a house in the U.S. Virgin Islands.
Condos are often located on or near a beach. Timeshare/fractional ownership options are usually available ranging from $2,000 and up. Commercial properties typically for sale in the VI include hotels, inns, restaurants, yachts and retail stores.
Real estate agents in the U.S. Virgin Islands use a Multiple Listing Service, and all listings can be found on our member’s website. Agents are required to be licensed, and licenses are renewed annually.
Closing costs are similar to transactions in the US and include costs associated with the loan (origination fee, credit report, appraisal, interim interest and escrow account setup), taxes (property, transfer and recording fees) and insurance (homeowners, windstorm and title insurance). USVI utilizes title companies to close a real estate transaction, and a title search is performed to ensure a clear title.