If you’re an expat thinking about purchasing a home in Mexico, here are four priorities for buyers of Mexican real estate you should be aware of.
Insist on a Comparative Market Analysis of “Solds”
Always Insist on a comparative market analysis of the” solds” and ask for a list of the market competition for any villa or condo you are considering buying. Don’t take no for an answer.
Although it is true that historically there has been a history of not recording true sales prices in the Mexican public registry, this doesn’t have to continue, and it is illegal. You, as a buyer, have the right to information before you spend your money.
Important sold data information includes price, sell date, area and the existence of a mortgage. Traditionally, seller financing commands a higher sales price. Also, some agencies do not show any properties for sale but their own.
Ask for a comparative market analysis and a list of what is available in the areas you like. You should ask for more than one office’s information and if you don’t receive it, this is a red flag. Insist on comparisons of what features the sold properties have versus the one you are considering buying.
Be Careful About Which Agent You Choose to Represent You
Mexico does not require education or fiduciary standards for persons selling real estate. At the present time, anyone, national or foreigner, can write up a sales contract for you to sign and receive a commission, whether his or her work is correct or not.
Foreigners must have permission to work from the Mexican government and be able to give you a copy of their RFC or registration in the tax authority, which shows they are a business.
Insist Upon Using an Escrow Account for Purchase Funds
There is no reason for you to use a broker’s account, which is prohibited by our AMPI chapters in the Bay of Banderas, or to use a notary or any private individual.
Don’t be talked into the idea that the cost of an escrow account is too expensive or a waste of money. Reputable escrow companies provide a “Do not proceed” with any purchase until you obtain local professional advice. There are reputable escrow companies you can use in Mexico.
Do Not Proceed with Any Purchase Until You Obtain Local Professional Advice
Unless you are a Mexican national and understand Mexican real estate law and taxes, or you are a foreigner who is fluent in Spanish and understand Mexican real estate and tax law, you are not capable of representing yourself. There are knowledgeable real estate agents, attorneys and accountants available to help you.
There are no formally approved real estate contracts and no disclosure regulations for you to depend upon. You have to be aware and become good at asking questions and using good judgement.
You have a great opportunity right now to find a wonderful deal on a villa or condominium in our Bay of Banderas market area as well as the rest of Mexico. Just be sure that you know the four priorities for buyers of Mexican real estate.
This article is based upon legal opinions, current practices and my personal experiences. I recommend that each potential buyer or seller of real estate conduct his/her own due diligence and review.