I think it’s useful once in a while to dust off my Mexico real estate 101 for expat buyers and sellers manual and refresh everyone’s memory on the basics for real estate transactions in this country.
First off, if you are a buyer, take the time to learn as much as you can about the area where you want to buy and the properties for sale. Find the best people you can to help you accomplish your goal. And if you are a seller, find out whether you are exempt from or have to pay capital gains upon sale. Plan this in advance of listing your property. Research the market conditions and determine a realistic price range to market your property. Clean up legal or physical problems and then find the best agency and agent to represent you.
Here are a few other basics you need to know about:
1. The listing price of a property is an important indicator of what should become a realistic sales price. If a seller has no real information on the market conditions for his/her area, or how to create a value from an income stream, the asking price is not defensible.
2. The bank, in the case where a fidecomiso is required, is the holder of the real estate and transfers certain rights to the primary beneficiary. The bank gives the primary beneficiary (you) the right to buy, sell, transfer, build, remodel and gift the property. The bank does not have the real estate as an asset on its books.
3. The sales agent and the listing agent have different functions. The exclusive listing agency has taken the responsibility of marketing your property and has committed to make the member agencies within their organization (AMPI) aware the property is for sale. The listing agency commits to advertise the property to these agencies, and through other means, makes the community aware your property is being offered for sale. The participating listing agency also agrees to make known to their member agencies they will receive a commission if their buyer purchases the property.
4. The buyer agent and selling agency have the responsibility to assist the buyer in the purchase of a property for the best price and terms.
5. If you are going to buy a single-family home, a parcel of land or a building lot, you should find a competent, honest engineer to do a topographical survey. Historically, in many sections of the country, when land was originally surveyed, it was done from the air by plane. The legal description of the boundaries and size were not as accurate as a specific survey on the actual land being considered for purchase. These original legal descriptions can be transferred from deed to deed until an updated survey establishes the current boundaries. It is very important for you to know what you are buying. You will be expected as the buyer to pay for and choose the survey.
6. If you need the advice of an engineer, accountant, designer, architect or attorney, you should seek the best available person to advise you. You should expect to pay them a fair and reasonable amount of money for their expertise. No real estate agent should attempt to keep you from using professional advice from other professionals.
A final thought to keep in mind: Everything has a price, so determine what you want, what the cost will be and if you are willing to pay it.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller conduct his/her own due diligence and review.
