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!
So you Want to Buy Real Estate in Puerto Vallarta…
So you’ve decided to take the plunge and invest in your own piece of Puerto Vallarta Real Estate. So what now? How do you make that dream a reality? Here is a quick overview of the buying process, later I’ll go into more detail on each step.
The first step is to determine your needs and set a budget. The kind of property you choose may vary dramatically depending on how you plan to use it. You might prefer an incoming producing Beachfront condo in Nuevo Vallarta if you are interested primarily in an investment property, or you might want a small home in Bucerias if you plan to retire in Puerto Vallarta. Either way, Knowing what you want from the outset will make your search much easier. Things you should consider are:
- Number of Bedrooms
- Number of Bathrooms
- Construction Area (how many square feet of living area do you want?)
- Lot Size
- Location
- View
- Price
For most people, price is going to be the main determining factor. You’ll need to figure out how much you can afford based on your savings, assets, ability to get a loan, how much you are comfortable investing, etc. (loans are now available for US and Canadian citizens wishing to buy in Mexico).
Once you have an idea of how much you want to invest and what your requirements are, your next step should be to talk to an AMPI or APIVAC certified Real Estate Agent in Puerto Vallarta. They will present you with options to help you narrow your search. Once you have found a handful of possibilities your realtor will schedule viewings to go out and see the properties. If you are not in Vallarta, most of the searching will be handled by email and internet, but of course you will need to be here for the physical property inspections.
Assuming you find the property you like, the next step will be to make an offer. Your agent will help you with this aspect and should be your representative in the negotiation process. Usually an informal offer is made in writing and the negotiations begin. once terms have been settled, a formal purchase contract is drawn up and signed before a notary. The notary adds formality to the process and ensures that all legal requirements are met before the property is transferred at the closing.
If you are not a citizen of Mexico, then you cannot legally own a property in the Restricted Zone of Mexico, which is comprised of a band 50 kilometers wide at the ocean and 100 kilometers wide at the national borders. To get around this limitation, the Mexican government created a systems of Trusts to allow foreigners to invest in Mexico. These trusts are called Fideicomisos in Spanish.
I will elaborate on each step in the process in future posts. Meanwhile I’d like to hear your feedback; if you have any questions or comments please leave a comment!
