Settling in Paradise--five house hunting snags

Relocating to America’s Paradise? Since St. Croix is a US Territory buying or building should be just like the states, right? Not quite.

Mortgage Rates

Be prepared for mortgage rates up to 1 point higher than stateside. The probability of damage due to natural disasters and high default rates on loans yield the increase mortgage rates. Compute this rate hike in your budget while house shopping. The high interest rates may put a once affordable asking price out of reach.

Property Insurance

In comparison with the states, property insurance can be astronomical. In addition, it is doubtful that you will be able to continue coverage with your local stateside insurance provider. On St. Croix all the property insurers are Caribbean-based. A buyer can retain his previous stateside insurer to provide insurance on the contents of the home.

Amenities such as hurricane shutters and home construction material affect rates. A wooden structure would result in a huge insurance bill. Most houses on St. Croix are constructed of concrete for both exterior and interior walls—in short a hurricane bunker.

Flood insurance is required based on land surveys. Not only low-lying properties are affected—a house located on a mountainside could potentially require flood insurance due to storm run off.

Building Costs

At present (mid 2007) the building costs on St. Croix average $200 to $250 per square foot. Land costs (the price of which has increased dramatically in the past five years) are extra.

Homeowners Associations and Road Maintenance

Many neighborhoods operate under the agreements of a homeowners association. Similar to stateside groups, St. Croix’s homeowners association often take on the additional duty of road maintenance. Limited Territorial government budgets for road repair and maintenance typically result in the repair of main roads only. Homeowners associations step in, collect dues, and repair and maintain roads within their respective jurisdictions.

Closing Dates

A 60 day closing time frame is typical. So get ready to wait a few days to move in to your new dream home.

Search the multiple listings service (MLS) with St. Croix-based realty agency (operating since 1930) Farchette & Hanley.