Puerto Vallarta Real Estate
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Buying property in Mexico involves many steps, not only finding the right villa or condo in the right area and at the right price, but also complying with a system of property ownership quite different from what is usual in one's home country.
A "Buyer's Representative" or "Buyer's Agent" is available to help you find the right property and negotiate the best price and terms. Our Puerto Vallarta real estate articles page provides valuable information on buying and selling Puerto Vallarta real estate. Our commitment is to provide you with a professional, care-free purchase or rental experience.
Please visit our Luxury Rental pages for your vacation accommodations. All of our Puerto Vallarta vacation rentals will provide you with more comfort and privacy, and a better per person value, than standard hotels. We can provide you with a one-bedroom condo on the beach, or a fully staffed private Puerto Vallarta villa with pool and tennis court. Let us help find that special retreat.
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"A deep recession in the United States has sent the Mexican economy into a punishing downturn but there are signs of a recovery on both sides of the border."
Reuters.com financing website
real estate articles...
"I have written several articles with the purpose of educating those looking to buy or sell Puerto Vallarta real estate. The following is a sample of these articles.Please visit our articles archive for more related information."
Trust in Mexican Real Estate Market
Real estate is a commodity like oil or pork bellies. Commodities are influenced by the same principles. Price and supply go up and they go down.
Read more...
Casa El Dorado (Formerly Casa Ava Gardner)
is undergoing a renovation by the new owners.
Supply and Demand
By Harriet Cochran Murray
"Good merchandise finds a ready buyer." Plautus 200b.c.
How does inventory become absorbed in an overbuilt market?
First, you have to have demand.
USA, Canada and countries with mortgages have a process with resales to help get rid of inventory. Developer inventory can be absorbed with attractive mortgages which the developer buys to make his product competitive.
Mortgage companies and banks handle absorption by renegotiating the terms of the mortgage. When they have to take the property back, they release the inventory slowly to not flood the market. In this system, selling for less than tax value does not create additional taxes for the buyer. Some municipalities adjust tax values to reflect the decrease in values in the marketplace.
Resort areas and in foreign countries have fewer mortgages. In these resort areas, fewer properties are used for mortgage collateral, so inventory may be absorbed more slowly. There are no third parties taking back inventory. These third parties typically can control the amount of supply in the market as they do workouts.
Resales compete with all other resales and the best price usually wins if there is any demand. A buyer’s market is not a good time to sell unless the seller is really motivated. The amount of inventory or supply is great. Resale price discounts are not according to a formula. Sellers need to be realistic or suffer the consequences. Realtors don’t help by letting the seller set the price unless the seller is realistic.
In Mexico, a long history of "low deeds" has caused the government to enact tax laws currently costing the buyer an extra tax if they are buying below tax value. This extra cost puts a limit on what the buyer will pay for the property since closing costs and taxes can be substantial.
What should buyers know in this market?
Each sale is individual and a buyer will most likely deal only with a seller, not a lender. Buyers should be patient and do their homework. Keep 2 or three properties on the top favorite list. Be prepared to make offers and face rejection. Don’t fall in love with only one property, like a few very much.
All cash is the best position to be in to make an offer. A foreigner cannot close "tomorrow". He must wait on the paperwork of the trust. A Mexican can sell quickly to another Mexican because no trust is required. I have seen a quicker close take priority over an all cash foreigner buyer who needs a trust.
What can the seller do?
Be sure he wants to sell. Be motivated. Do not take it personally if a low offer is made. Stay in the game. Continue communication back and forth with the buyer. Determine if incentives can keep the price higher. If there is no washer and dryer, offer to put them in or give a cash payment or price deduction. Pay some of the buyer’s closing costs. Consider seller financing. Offer a buyer a 3-5 year term on an amortization of 30 years. Require a balloon payment of the entire mortgage at the end of the agreed-upon term. Or really reconsider a negotiated cash price both buyer and seller can accept.
Today I noticed a small detail, which because of the competition, could eliminate my clients considering a specific property. There were a number of exemptions in the furnishings. We were told the owners will replace this furniture with other pieces. My advice: Get this taken care of ASAP. Take the furniture not included in the sale out right now. Competition is so fierce that any difference, any extra work or issue for the buyer, can disqualify the seller who creates any uncertainness.
Sellers, put your best foot forward. It takes only one person seeing the real estate to become your buyer. Don’t waste even one showing with a poor presentation.
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 own due diligence and review.
