What are the priorities for buyers of Mexican real estate? First, always insist on a comparative market analysis of homes sold and a list of the competition on the market for any villa or condo you are considering buying. Don’t take no for an answer.
It is true that historically there has been a precedent of not recording true sales prices in the Mexican public registry, but that doesn’t have to continue. You, as a buyer, have the right to key information before you spend your money.
Until buyers start requiring this information, the normal process will take too long. 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, Mexican national or foreigner, can write up a sales contract for you to sign and receive a commission, whether their work is correct or not. “Buyers Beware,” still holds true.
Information on what has sold, when it sold, and whether or not there was financing by the seller or a third-party mortgage, is important. Traditionally, seller financing commands a higher sales price. Insist on comparisons of what features the sold properties have versus the one you are considering buying.
Learn 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 should get more than one office’s information or this is a red flag.
Insist upon the purchase funds being put into an escrow account. There is no reason for you to use an account of the broker, 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.
Unless you are a Mexican national and understand Mexican real estate law and taxes, or you are a foreigner who is 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. However, if anyone trying to sell you something or acting as your agent tries to talk you out of professional advice, this too is a red flag.
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 Bay of Banderas market of Puerto Vallarta, Bucerias, La Cruz, Punta Mita and many points in between. If you take sound steps in the process, you will be very fortunate and happy, for many reasons, to own a home here.
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.