Puerto Vallarta Real Estate Market Update
In the 4.5 months of 2018 (Jan 1-May 13, 2018) we have sold $123,946,641 usd of inventory with an average sales price of $327, 901 usd at 94.6% of list after an average of 298 days on the market. **
We have experienced more sales volume and a higher average sales price than last year for this some time period. Condos account for $82,000,000+ usd and homes over $33,000,000 usd. **
Centro South, South Shore, and Hotel Zone areas are leading our sales volume with pre- and new construction projects, for the most part.**
WHAT WE NEED TO DO
- AMPI* has ethical and business rules stating all offers must be in writing, every offer must be presented to the seller, and answered in writing whether the response is an acceptance, counter, or rejection of said offer. THE ANSWER TO ANY WRITTEN OFFER MUST BE IN WRITING FROM THE SELLER, NOT THE SELLER´S AGENT.
Obviously, the seller answer will be sent to the buyer agent/buyer through the seller agent. You, as the buyer or seller need to insist on this procedure if you are not experiencing this transparency from your agent.
- In Mexican law, a verbal agreement may be recognized as legal, but real estate agents working with buyers and sellers, on offers and negotiations have to conduct offers and sales in writing.
- Buyers and sellers must initial the pages they are agreeing to be part of the offer or agreement. If changes are written in, they need to be initialed also by seller and buyer in order to be recognized as binding.
- All names of the principals to the offer or the agreement, must be printed or type separately from their signatures, which are not always legible.
- At closing or shortly after closing, the notary must furnish the seller with a formal receipt (factura) of the amount of capital gains paid to the Mexican government by the notary. With a factura comes an xml encrypted code. You must keep this code for proof of your payment.
As seller, you should also receive an informal receipt of the cost you have paid for a fiscal strategy to lessen the amount of tax you owe.
You are owed two receipts.
- As the buyer, you must be sure you receive from the notary or condominium developer a pdf file and xml encrypted file stating the exact amount of money you paid as the purchase price. Save these files or you when you sell you will not be able to use your purchase price as your basis. If you have little or no basis, you will pay capital gains tax on the original price you paid plus any gain in equity. This rule became law in 2014.
- You need to realize your purchase and sale prices are recorded in Mexican pesos and the differences in these amounts, creates for you a gain or loss which in turn creates what amount of tax you owe the Mexican government, or if you owe no tax.
*AMPI Asociación Mexicana de Profesionales Inmobiliarios, AC (Mexican Association of Real Estate Professionals, AC)
** FLEX MLS operated by FBS, with reporting by Ampi agents in chapters Nayarit, Vallarta, and Compostela.
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