*Vallarta Real Estate Information 101

Tue, 08 Dec 2009 19:59:47 UT

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, loaded with concise information about Puerto Vallarta real estate. 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.

Should I be working with a real estate agent?
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 Multi-List Vallarta, that sellers are not privy to. If you are considering selling, ask for a Multi-List Vallarta affiliated Realtor, as they can assure you property get maximum exposure, both online and in print.

Is there a RE association, and are realtors licensed?
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 licensing currently for realtors in Mexico; however, in Puerto Vallarta AMPI has stepped in to fulfill a similar role as best they can.

What is the MLS system in Vallarta?
Our MLS service, one of the first and the longest running in Mexico, comprises two systems, Multi-List Vallarta (for the resale market) and Multi-Dev Vallarta (for developers), which are merged together on our websites. It can be found at www.mlsvallarta.com or www.vallartarealestateguide.com or on many real estate company websites.

Can I actually own land in Mexico?
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.

What’s a “trust”?
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.

What other ways can I find out information about real estate in this area?
Consider our print publications: Vallarta Real Estate Guide (free distribution all over town), Costa Vallarta/Riviera Nayarit (newsstands, real estate offices and boutique hotels) and Vallarta Lifestyles (hotel rooms, newsstands and advertising clients). Or check online: www.mlsvallarta.com, www.vallartarealestateguide.com or www.virtualvallarta.com.

Benefits of Owning Real Estate in Mexico/Vallarta
• Variety of real estate options

• Real estate price points to suit every budget

• Low property taxes

• Lower cost of living than you may be used to

• Affordable household staff (i.e. maid service and gardeners)

• Great weather year round

• World-class amenities and services such as legal and medical available in English

• Growing expat community with a year round array of social events and activities

• Fabulous golf, boating and water activities throughout the year

• Chain outlets such Wal-Mart, Home Depot and Costco to provide the comforts of “home”

What are the closing costs involved?
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. The following examples, provided by Tropicasa Realty, are broad guidelines that should give you an idea of what to expect.

Property Type •   Value
Home    $950,000 USD
Home    $385,000 USD
Condo   $230,000 USD

How much are property taxes and other regular home expenses?
Property taxes are very low compared to 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.

Is financing available?
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 that can pre-qualify purchasers.

What are the advantages and disadvantages of condo living?
Advantages: When it’s time to leave, you simply lock the door, making it more secure than a private home.

• Sharing maintenance costs with the other residents lowers monthly expenses.

• Condos often offer a better view if you live on a higher floor.

• Because 80 percent of the product inventory in Vallarta is condos, there are properties available at all price points, with a wide variety of locations and styles to choose from. Disadvantages: Sharing your costs means living in close proximity to others.

• Decisions about the property are made by group majority and may not reflect your preference.

• Homeowners, association meetings can be challenging, particularly for those who’ve never lived in a condo.

What is the role of the homeowners’ association (HOA)?
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.

Are maintenance fees consistent in all developments?
What the condo fee covers varies from project to project, so research thoroughly before purchasing to find out exactly what the fees include.

What are the advantages of buying pre-sale vs. resale?
When purchasing a resale 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 even turns out 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.

A Short Questionnaire to Help Focus Your Housing Search
1. Do you want to be close to town or do you want to get away from it all? More people are moving toward developments for social and security reasons and because they relish a sense of community.

2. Do you want a condo, a villa or home? All options are readily available, so consider the pros and cons of each.

3. Amenities? If amenities and activities such as golf, surfing, shopping are important, find out where the ones you’re most likely to frequent are located and investigate the housing options within reasonable proximity.

4. Is having a view important? The Puerto Vallarta area offers river, ocean and jungle views, with prime properties offering all three.

5. Which floor is best when purchasing a condo? All floors have their pros and cons. Talk to others to live in condos and find out their preferences, especially if you’re coming from a single-family dwelling.

6. Will this property be primarily used by adults or entire families? Some developments cater more to adults, while others have beach clubs and children’s activity programs and are suited for the entire family.

7. Do you need quick access to medical facilities? There are some excellent hospital throughout the area. Make sure you know their location before viewing properties if this is an essential amenity.

Puerto Vallarta, Mexico - Test

*Vallarta Real Estate Information 101

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