AMPI Members Meet to Discuss the Status of Tourism Real Estate
I ran across this article recently… It talks about the state of the tourism based real estate market in Mexico. It talks about some areas having taken a 50% hit in property values since the crisis began. I think about 25% is closer to the truth in Puerto Vallarta, which speaks to the inherit stability in the market here… the very large amount of equity in the market combined with a basically attractive destination location has kept the Puerto Vallarta real estate market a much safer investment than many other cities both in Mexico and around the world.
Nearly one hundred members of the Mexican Association of Real Estate Professionals, (AMPI) met earlier this month in the Nation’s capital. The purpose of the all-day meeting was to discuss the status of Mexico’s real estate market in the “tourist” zones and develop strategies that might help a recovery.
Click here for the entire story…
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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.
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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.
| bahYa247 |
The Ins & Outs of Driving in Mexico Part 6 What to do if your car breaks down in Mexico
This is Part 6 of my 6 Part series on Driving in Mexico. Click here for Part 1, Part 2, Part 3, Part 4, Part 5
What to do if you break down in Mexico
If you plan on bringing your car to Mexico, you should make sure it is in good shape before you come. As with any long car trip, you’ll want to check your tires, change your oil, check fluid levels and filters, etc.
In spite of your best preparations, sometimes things can still go wrong with your car. This does not mean your trip is ruined… here are a few pointers:
If you are on the main highways in Mexico, especially on toll roads and in what are called tourism corridors, areas of interest to tourists, the government sponsors rolling mechanics called the “Angeles Verdes” (Green Angels in English). The Green Angels patrol major highways and stop to help motorists in need. They can help out with minor repairs, or a little gas if you didn’t top up at the last gas station. If your problem is beyond their ability to fix on the road, they can call a tow truck for you. The Green Angels services are free but if you need a tow, the tow operators fees would apply. If you are stranded, you can dial 078 on your cell phone for assistance.
Av. Vallarta in Guadalajara, Jalisco, Mexico
A quick note about cell phones: If you plan to travel in Mexico, it’s a good idea to carry a cell phone. Call your provider before you come to Mexico to see if they have international roaming plans, and have them turn it on for you. Once you get to the border, confirm that your international service is working. Another alternative is to pick up a pay as you go phone when you get into Mexico. Just look for one of the ubiquitous Telcel stores in any shopping plaza in the country. They sell the “Plan Amigo” kits with a cheap phone and minutes for about $50USD. I recommend Telcel because they have the most coverage in rural areas and you can buy minutes for them on just about any street corner in the country.
A good mechanic is hard to find anywhere in the world. In Mexico you can walk into a primitive dirt lot and find a mechanical wizard …or not. It’s really hard to tell and looks can be deceiving. If you were helped out by a Green Angel, ask him where you should take your car. If you weren’t, ask around a little… ask where you had lunch, or at the hotel, or at the auto parts store. Once you have your mechanic, ask for a price up front (that’s the same advice I give if you want to take a Taxi, btw). Most people in Mexico are honest and helpful, but there are crooks everywhere and waiting for the mechanic to finish before discussing price is an invitation for the unscrupulous ones to charge whatever their hearts desire. Car repairs are not always straightforward and may end up costing more than the estimate (hence the name: estimate), that doesn’t necessarily make the mechanic a crook. But if you run into someone who gets evasive when you ask about cost up front, you may want to try another mechanic.
Mexican mechanics are pretty good at adapting and jury rigging. That’s why they call it “a la Mexicana,” or Mexican Style. This is good because parts for your car may not be available, or may be very hard to come by. Even if you see a car just like yours driving by, parts may not be interchangeable between American cars and their Mexican counterparts; even if the car is the same make and model,and both may have been built in the same Mexican factory… Strange but true. Your mechanic may suggest some odd solutions, but chances are they will work and get you down the road. Just be careful that his fix doesn’t make any permanent changes that can’t be undone later.
If you have read all six parts of this post, thanks for reading. A lot of what I said may sound alarming; I tried to be a little bit pessimistic for the benefit of the first time driver in Mexico because it is important that you take the time to learn the ropes carefully when driving in Mexico, but once you have a little experience, you’ll find that driving here is no more difficult (a bit more exciting, maybe) than driving at home. Just remember to do as they say in Texas… “Drive Friendly” and you’ll be fine.
Click here for Part 1, Part 2, Part 3, Part 4, Part 5
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The Ins & Outs of Driving in Mexico Part 4 Temporary Permission to Bring Your Car into Mexico
This is Part 4 of my 6 part series on Driving in Mexico. To jump to other parts, click here: Part 1, Part 2, Part 3, Part 5, Part 6
How to Get a Temporary Permission for Your Car in Mexico
Everything I have said up until now is academic if you don’t have a car to drive in Mexico. It is perfectly legal to bring your car into Mexico with you, but you’ll need to get a permit to do so and there are restrictions.
If you come to Mexico by car, you’ll cross the border at one of several border cities such as Laredo, Nogales, or Tijuana. The procedure varies slightly from city to city, but generally you cross the border and make a customs declaration (as necessary), get your tourist visa, your car permission, then on to the checkpoint. Usually, the first 3 items can be done right at the border, in some cases, such as Nuevo Laredo, you need to drive into town to get permissions after clearing customs at the border. Either way once you have your permissions and proceed into the interior of Mexico, you are going to run into a checkpoint.
Getting your car into Mexico takes a little extra effort, but it is well worth it
There is an agreement between Mexico and the United States that allows US citizens (and by default pretty much everyone else) to cross the border and visit Mexico without a visa so long as they go no further than 25 kilometers into the country. At the 26 kilometer mark there is a checkpoint where your documentation is checked. In order to proceed further you will need a tourist visa and vehicle permission. If you don’t have these two items you’ll be sent back to the border to get them. Fortunately neither is hard to come by (as long as you have come prepared).
While at the border, you simply need to present your passport (along with your application and a fee) in order to receive an FM-T tourist visa, which are both generally good for six months. Once you have your Visa, you can get your Vehicle permission. Vehicle permissions are a little trickier, you’ll need the following documentation:
- Temporary Vehicle Importation Application (Available at the border)
- Tourist Visa (The one you just got from immigration)
- Passport
- Drivers License
- Credit Card
- Copy of the vehicle’s title or, if the vehicle is financed, a copy of the letter of credit from the finance company, plus a letter from the finance company authorizing you to take the vehicle to Mexico. You’ll want to contact your finance company well in advance of your trip to get that straightened out… you don’t want to try to figure that out while you are stuck at the border!
- Copies of your visa, passport, driver’s license, credit card and vehicle documentation (there is usually someone there with a copy machine who will make your copies for a small fee)
Take all your paperwork to the vehicle permission representative, who will enter your information into the computer, charge your credit card for the application fee (around $20 US) plus they keep a copy of your credit card as guarantee that you will remove the car from the country when you leave Mexico. Once the paperwork has been processed, the representative will go to your vehicle to confirm the serial number and affix the permission sticker to the inside of your windshield. They will give you the permission documents and you are on your way. The car permission is granted for the same duration as the visa; usually six months. Crossing the border can take from one to many hours depending on where you cross and how busy they are at the time. I usually assume the crossing will take half a day and make my travel plans accordingly. Before you travel, you’ll want to check with your nearest Mexican consulate to confirm these requirements as they may change at any time.
As I mentioned, there are some restrictions. When you leave Mexico, you need to turn in the vehicle permission. If you don’t you may find a charge on your credit card for up to several hundred dollars. This varies depending on the value of the car. Also, you won’t be able to get another permission for future trips until the first permission is canceled. Another thing, Mexican nationals may not drive your car unless you are in it. The only exception being if the person is married to you and they have a marriage certificate to prove it. If a Mexican national is caught driving your car without you in it, the Mexican is likely to end up in jail and your car confiscated… it’s difficult, if not impossible to get your car back in such a case.
Next: Part 5 – What to do if you get into a car accident in Mexico
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