Everything you need to know about buying and selling real estate in Mexico, Puerto Vallarta, and the Banderas Bay region

Behavioral Bias in Real Estate

Are Your Emotions Costing You Money?

One of the most interesting asset classes where we see pronounced influence of behavioral biases is in real estate. Real estate is a highly emotive asset in most cultures. This can help explain phases of ‘irrational exuberance’ in property markets where prices move away from fundamentals. Real estate markets suffer from a greater degree of incomplete information. No two assets are the same, and there is often no central exchange. Sellers tend to know more about assets than buyers, a fact that real estate intermediaries can exploit. The quality of, and access to, information is poorer than in stock markets.

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Real Estate Transactions in Mexico

Cultural Differences and Negotiations

The three countries which make up North America are physically close, but each has a different history and culture. Which cultural aspect do you associate with the following:

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The Fideicomiso Trust

Can You Own Beachfront Property in Mexico?

A client who recently bought a condo in Puerto Vallarta, called and said, “Please write a summary of the basic points of foreign ownership: so that not only I can speak about it better, but to teach or remind other foreigners what a unique opportunity we have to own properties near the ocean in Mexico.” This is a summary of the characteristics of a fideicomiso trust: Legal ownership of real estate in Mexico for foreigners comes from the Foreign Investment Law which was approved by President Luis Echeverria in 1971 and became law in 1973.

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Buying Property in Mexico

Real Estate Escrow and Deposits

If you have found a property, and you want to make an offer, I recommend the following: Your offer should include time for you to conduct due diligence, an inspection, or other concerns.  Beware of your having to put your deposit into the escrow company before these issues are resolved. Mexico does not require funds to be put up by the buyer in order to have a binding offer.   In fact, the country does not require escrow. But for you, as a foreign buyer these two issues are important to understand for your safety. 

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