What are the top priorities for property buyers in Mexico? There are four things you need to remember: Access to information, representation, escrow and use of an attorney.
Access to Information
Insist on a comparative market analysis of the “solds” 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.
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.
Information for sold data, such as price, sell date, area, and if there is a mortgage, is important. Traditionally, seller financing commands a higher sales price.
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 find more than one office’s information, or this is a red flag. Also, insist on comparisons of what features the sold properties have versus the one you are considering buying.
Representation
Be careful about which agent you choose. Mexico does not require education or fiduciary standards for persons selling real estate.
At the present time, anyone, Mexican or foreigner can write up a sales contract for you to sign and receive a commission, whether the work is correct or not.
Expats should have permission to work from the government and be able to give you a copy of their RFC or registration in the tax authority, which shows they are legally working.
Anyone telling you not to use professionals such as accountants, engineers or attorneys, raises a red flag.
Escrow
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 an important service to hold funds before closing and then disburse when the notary provides evidence of the transfer of the property.
Use of an Attorney
Unless you are a Mexican and understand Mexican real estate law and taxes, or you are a foreigner who is fluent in the language and understand the Mexican real estate and tax law, you are not capable of representing yourself. You need to pay an attorney here to review the legal documents of the property and advise you of his/her findings and if there is a known risk.
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 market of Puerto Vallarta, Bucerias and 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 in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.
