Merry Christmas!
Just a quick note as we prepare for Christmas Dinner… Best wishes to to you and yours and I hope you are enjoying the holidays with those who are most important in your life.
Merry Christmas!
Best wishes to you and yours this holiday season!
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…
I’m interested in what you think, please leave a comment!
How to Buy Real Estate in Puerto Vallarta – The Development
In recent posts I have been describing the process for buying real estate in Puerto Vallarta, Mexico and I have been giving a lot of information about buying resale properties from private sellers. I thought this would be a good time to give a little more information about buying new properties from the developer in Puerto Vallarta.
Puerto Vallarta Real Estate
The process is very similar to buying from a private party, except the developer will usually have a lot more control over the process. Developers tend to be less negotiable on price and terms (depending on the market) and they carry their own offer sheets (letters of intent) and contracts. They will usually ask for a 30% down payment, and will often have various financing plans available offering differing levels of discounts depending on how quickly you pay. Developers will also often insist on using their own notaries. This is because as a development, they have a great deal of paperwork involved for many different units on the same property. Putting all that paper work with one notary saves a lot of time and labor spent reinventing the wheel. This is all well and good, but it is not a bad idea to see if they will match another notary’s rate, to help ensure you are not being overcharged for their services.
One advantage to buying new from a developer is the warranty. New developments usually have 1 year warranties, which allow you to find any defects that inevitably go along with a newly built building. How good the warranty is really depends on how good the developer is. Your real estate agent will be able to help you find the better developers.
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 – 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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