Updated and featured in Vallarta Lifestyles Magazine, Winter/Spring 2011 issue.
Purchasing real estate in Mexico may appear to be a daunting venture. To help demystify the process, we’ve created this CliffsNotes-style, jargon-free guide. Providing an informative overview of this multi-dimensional topic, it includes answers to a number of the frequently asked questions that repeatedly come our way.
Yes, you should, whether you are buying or selling. The process is not as simple or straightforward as it is in the USA and Canada, and there are potential obstacles that a guide will help you navigate through (unless you speak Spanish, you’re at an immediate disadvantage). They also have access to marketing tools, such as the MLS, that sellers are not privy to.
AMPI, the Mexican real estate association, has three chapters in Puerto Vallarta that provide traditional real estate services and also ensure that realtors are behaving according to the highest professional standards. There is no mandatory licensing currently for realtors in Mexico; however, in Puerto Vallarta AMPI has stepped in to fulfill a similar role as best they can. More information regarding the local real estate association can be found at www.vallartanayaritmls.com.
There are few systems in the region providing MLS service, one of the first and the longest running in Mexico, comprising two systems, Multi-List Vallarta (for the resale market) and Multi-Dev Vallarta (for developers), can be found at www.mlsvallarta.com, www.mlsnayarit.com or www.vallartarealestateguide.com and on many real estate company websites. The real estate association AMPI also has an MLS system, which can be viewed at www.vallartanayaritmls.com.
Yes. Although the restricted zone specified in the Mexican Constitution prohibits a foreigner from acquiring direct ownership of land within 100 kilometers along the border or 50 kilometers along the coast, you can obtain all the rights of ownership in the restricted zone via a bank trust known as a fideicomiso. Since Vallarta lies within this zone, you need to use a trust here if you are not Mexican, but for all intents and purposes, it’s just like getting title.
Because of the restriction mentioned above, a buyer can request a Mexican bank of his choice to act as a trustee on his behalf. The fideicomiso (trust) can be established for a maximum term of 50 years and can be automatically renewed for another 50-year period. The title is transferable to any other party. The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary, who has all the benefits of a direct owner.
There are a number of print publications. Two of the more popular one’s are the Vallarta Real Estate Guide (free distribution all over town) and Vallarta Lifestyles (hotel rooms, newsstands and advertising clients), or check online at www.mlsvallarta.com, www.mlsnayarit.com, www.vallartarealestateguide.com or www.virtualvallarta.com.
Whenever a real estate purchase takes place in Mexico, a number of additional closing costs are involved and should be taken into account. These can vary in amount and complexity, depending on the type of transaction and whether a trust is involved, and are determined by the notary office of your choice, along with the real estate agency handling the transaction.
Property taxes are very low compared to the USA and Canada; however, condos charge additional fees, such as homeowners’ association and master homeowners’ association charges. Utilities are reasonably priced, and household staff, such as maid, chef and butler, is extremely affordable.
Yes. This process is easier than ever, and interest rates are lower than in the past. Many banks currently have English-speaking divisions, and many realtors are bilingual. Established realtors often have their own mortgage broker who can pre-qualify purchasers.
The HOA is responsible for maintaining and administering the common areas of any project or development. They collect maintenance fees from the owners, provide reserve funds, pay the bills and work with a board made up of homeowners. A well-run association can keep your costs down, but it’s a good idea to find out how it’s functioning in any property you may be interested in. This is something that is too often overlooked when prospective purchasers are considering a property.
What the condo fee covers varies from project to project, so research thoroughly before purchasing to find out exactly what the fees include.
When purchasing a re-sale property, you know exactly what you’re getting; however, if it’s an older home or condo, it may require maintenance or upgrading or may be missing the stylish amenities a new unit may offer. Pre-sale purchases often involve purchasing over floor plans, models and artist renditions, which may leave some aspects up for contention later. Sometimes, though, it turns out even better than the buyer expected, but not always! Also, in challenging economic times, a developer may cut back on quality of finishing, in order to save money. But with a pre-sale property, you get the advantages of sometimes better pricing and stylish, new amenities. And it’s new, so serious maintenance should not be needed for some time.