How to Buy Real Estate in Puerto Vallarta – The Notary
One of the most important elements in the Puerto Vallarta real estate buying process is the notary.
Notaries in Mexico are a little different from the notaries you may be used to at home. Rather than being someone who took a course and is now licensed to certify documents, notaries in Mexico are at the top of the legal food chain. They are empowered by the federal government of Mexico to oversee real estate transactions, even collecting taxes on the government’s behalf. They are the highest authority short of a court of law with regards to real estate transactions and are indispensable when buying real estate in Puerto Vallarta.
So what does this mean to you?
The Puerto Vallarta Malecon extension
Notaries handle all the legal aspects of the closing process. They perform the title search, making sure the property you want to buy is legally ready to be sold, that there are no liens or encumbrances, that your future Puerto Vallarta house is not standing on Ejido land, and that the person selling you your beach front condo is, in fact, the same person that owns it. They create the title documentation and when the transaction is done and the house is yours, the notary will file that and all other appropriate documentation with the public registry and other government agencies and ultimately provide you with the title (called “escrituras” in Mexico).
You as the buyer are responsible for paying the closing costs in Mexican real estate purchases. This means you are responsible for paying the notaries fees as well as other taxes and fees associated with the transaction. As a general rule, you can expect to pay about 5% of the purchase price in closing costs… so a home costing $100,000 US dollars would typically require about $5,000 US dollars in closing costs. Many people consider these closing costs to be high, but when you consider that that same $100,000 home would pay only about $50 to $100 dollars (I’m being very conservative here) in property taxes annually, you can see that things more than even out in the long run. One of the great things about buying real estate in Puerto Vallarta is the low holding costs.
Since you are paying for the notary, the choice of which notary to use falls on you, the buyer. This is another place where your real estate agent will come in handy. They should be able to direct you to reputable notaries and get you 2 or 3 quotes to help you shop the best deal. There are cases where the seller may negotiate to use a specific notary for various reasons… this is OK so long as the notary they are suggesting has a good reputation for working professionally. You will want to get a few estimates from other notaries and ask their notary to match the best rate before agreeing to use them.
As you can see, notaries play a huge part in the real estate purchase process… In fact, their participation is required by law. If someone tries to talk you into doing a real estate deal in Puerto Vallarta without the assistance of a notary, run the other way.
I’d like to hear your thoughts, please leave a comment below and share with your friends!
How to Buy Real Estate in Puerto Vallarta – Making the Offer
OK, so you’ve been looking high and low and have finally found that perfect place by the sea in Puerto Vallarta.
Now what?
Hopefully by this time you have found a Real Estate agent you are comfortable with. You will have seen the value of their knowledge and experience in the local market in sifting through all the options available, and now all that knowledge and experience will help guide you through the sometimes muddy waters of the Mexican real estate buying process. Real estate transactions are, by nature, complicated; this is true anywhere and Mexico is no exception.
There are many exciting opportunities in Puerto Vallarta
Your first step in buying real estate in Puerto Vallarta is to make an offer. This may seem obvious, but should be handled properly, to avoid confusion or misunderstandings later. When we make an offer, we typically submit it in writing in the form of a letter of intent. This letter specifies the price you want to offer for the property and outlines the general terms of purchase (specific terms are defined later in a formal purchase and sale contract). If the seller of the property likes your offer, he or she will sign the letter of intent, and we are off and running. Often times, however, the seller will want to counter offer, which starts the negotiation process. Negotiations are typically carried out by the real estate agents involved in the transaction (usually one for the buyer and one for the seller), who would each confer with their respective clients until a deal is reached.
Once a deal is reached, the real estate agents will draw up the formal purchase and sale agreement, which is then signed by both the buyer and the seller. At this time the buyer usually makes a down payment to secure the property and the closing process begins. In most private sales, the down payment is 10% of the negotiated purchase price, for new construction bought from the developer, this is usually higher… about 30% in most cases. Typically the remaining balance is due at closing, although all terms may be negotiable.
We recommend using an escrow account to hold all funds – including the down payment – until closing has completed. Escrow does not formally exist in Mexico at this time, but in areas like Puerto Vallarta where we are used to dealing with international transactions, escrow has become a common tool to help ensure the closing goes smoothly. Companies like Stewart Title and First American Title have a strong presence here in the Puerto Vallarta Real Estate community. Both offer escrow services as well as title insurance.
Now that the closing process is underway, you can relax. Your real estate agent will work closely with the notary who is handling the closing to provide documentation, manage the escrow, and prepare for the closing.
More on all of that later…
Meanwhile, I’d like to hear your thoughts, please leave a comment below.
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Finding the Right Home in Puerto Vallarta
View from the Penthouse at Los Altos Condominiums
Buying a home can be an exciting and nerve wracking experience. There are always a lot of emotions involved with a home purchase, and buying a home in Puerto Vallarta can be especially so. Buying off shore real estate means dealing with a different set laws and customs, so getting advice from a professional real estate agent that works in the market is a good idea. If you are looking to buy a home in Puerto Vallarta chances are you are looking for a 2nd home… a vacation home or an investment property, even a home to which you will eventually retire. So your criteria needs to be a little different than someone looking for a home in suburbs whose main concerns are good schools and proximity to their work. Location is still important, but when finding the perfect home in Puerto Vallarta, you are probably more interested in the view, and proximity to the local market… or seclusion from everything.
So how do you choose?
The first and most important step is to set a budget. Cost is going to be the limiting factor for most people. I suggest you sit down and do a good analysis of your finances. figure out how much you can afford. Many people will buy outright using money from their savings or other investments. Others will want to look at financing options. There is financing available for foreign investors in Mexico as well as options that can use you assets at home as collateral for your foreign property purchase. You can expect to pay a little more for these kinds of loans, so adjust your expectations accordingly.
Other things you’ll want to look at are how many beds and baths do you need, how much space are you looking for, what part of town you want to be in (do you want to be on the beach, or on the hill, or in town?), what kind of view you want. You’ll also want to consider any special needs you have, such as wheel chair access, suitability for pets, single level vs. multi level floor plans. Are you going to want to lock the place up for months at a time and not have to worry about it’s security? Are you looking for rental income from the property? All these things can dramatically affect your choice.
Take stock of the things you are looking for in 2nd home in Puerto Vallarta, make a list of the things you want as well as a list of the things you don’t want (sometimes the things you don’t want can be more important than the things you do). Then go find an AMPI or APIVAC affiliated Real Estate Agent in Puerto Vallarta (I like this one, but I’m probably biased 
) that you are comfortable with and start your search.
