Buying a resale
This is the most straightforward way to buy a condo.
- You can see what you’re buying. You don’t have to imagine how it will look from
a floor plan.
- There is no wait. You get to move in as soon as you close.
- If the unit has been lived in for more than a couple of years, you might need to
set aside money for renovations.
- You can end up in a bidding war for a good unit in a popular building, and you
may be outbid.
- You are first owner of the unit and you get to customize certain things (such as
appliances, cabinetry, flooring).
- Pre-construction condos tend to begin at a lower price because of a risk that the
project will be delayed or even called off.
- You may be able the builder a series of payments and have time to accumulate
the entire purchase price. The initial deposit may be 20%-30% of the purchase
price with negotiated installment payments. Builders generally to not charge
interest on the unpaid portion of the purchase price if your payments are on time.
- You are buying based only on a floor plan without seeing the finishes, the layout
or outside view of the building.
- You can occupy your unit when it’s ready, but other parts of the building may still
be under construction.
- Until the building is completed and officially registered as a condominium
corporation, you cannot record the escritura to show you are the legal owner.
- At the time of closing with the notary, you will still have to pay your buying closing
- Nothing is guaranteed. A condo building usually takes several years to complete.
There is always a chance that the builder won’t sell enough units to proceed with
construction, or can’t finish construction for some other reason, so you don’t get
your condo. And sometimes the condo may look a bit different when it’s finished
compared to what was initially proposed by the builder.
Assignment of a Pre-Construction Contract:
These are the two main ways to buy a condo, but there is a third:
- Buying from someone who has bought a pre-construction unit instead of buying
from the builder.
- Buying an assignment can be very tricky, because it is difficult to determine how
much to pay up front as it varies with each case.
- You must pay the owner all the deposits already paid to the builder plus enough
to cover whatever profit the owner is trying to make.
- Depending on how close the unit is to completion, the same pros and cons as
pre-construction apply to some extent.
Both pre-construction and resale have their pros and cons, depending on your preference, your budget and the amount of risk you’re comfortable with. Before you decide, it’s a good idea to consult a qualified bilingual real estate attorney and competent AMPI* real estate agent to guide you through the process.
*AMPI: Mexican Association of real estate professionals
This article is based upon Flex MLS reporting, 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. If you have any other questions, contact me through my website.Harriet Murray