There are many things to consider when buying a home or property in Mexico, but you should keep uppermost in mind the following three priorities for buying real estate in Mexico.
Comparative Market Analysis
First, insist on a comparative market analysis of the properties sold and the current competitive listings for any villa or condo you are considering buying. Don’t take no for an answer.
Historically, there has been a precedent of not recording true sales prices. You, as a buyer, have the right to information before you spend your money. Until buyers start requiring this information, the normal process of looking and making offers will be problematic. Opinion is cheap and thought requires work.
Mexico does not require education or fiduciary standards for persons selling real estate. At the present time, anyone, national or foreigner, can write a sales contract for you to sign and receive a commission, whether their work is correct or not. “Buyer Beware” still holds true in Mexico.
Information on what has sold, when it sold, and whether or not there was financing by the seller or a third-party mortgage lender, is important. Traditionally, seller financing commands a higher sales price. Insist on comparisons of what features the sold properties have that are similar or dissimilar to the property you are considering buying.
Ask how much inventory is in the area where you are looking and what the price ranges are for similar properties. Some agents do not show you other available properties on the market. Some agencies do not show any properties for sale but their own. If you ask for the comparative market analysis and a list of what is available in the areas you like, you also should ask which belong to the agency you are using, and which do not.
Escrow Account
Insist upon the purchase funds being put into an escrow account. There is no reason for you to use your broker’s account, which is prohibited by our AMPI chapters in the Bay of Banderas, or to use the 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 badly needed service at reasonable fees.
In the case of new construction projects, some builders use a master trust and your funds are put into that bank trust. In all cases, know where the money you are paying is being sent and what your rights are in case of seller default.
Professional Advice
Unless you are a Mexican national and understand this country’s real estate law and taxes, or you are a foreigner fluent in the language and understand Mexican real estate and tax law, do not proceed with any purchase until you obtain local professional advice. There are knowledgeable real estate agents, attorneys and accountants available in every major expat center. If anyone trying to sell you something or acting as your agent tries to talk you out of professional advice, consider it a major red flag.
In Mexico, there are no formal, 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 judgment.
You have a great opportunity right now to find a wonderful deal on a villa or condominium in our market of Puerto Vallarta, Bucerias, La Cruz, Punta Mita and many points in between. But remember to make sure that you insist that your realtor comply with these three priorities for buying real estate in Mexico. You’ll be glad you did.
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.
