Puerto Vallarta, Jalisco, Mexico – I have put together this easy-to-consult reference on the different aspects of buying property here in Mexico and in most cases, in an area called the ‘Restricted Zone,’ which encompasses an area in Mexico of about 47% of the country; it is measured in a strip of land 50 KM from the coastline and 100 KM from international borders.
When I work with clients it is my goal to see that any questions or concerns regarding the purchase of their new home are addressed completely and immediately.
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Many Buyers or potential Buyers are reluctant to “waste an agent’s time” if they feel that they are not quite “ready” to buy. I understand that the process is different for each person and the key is for the Buyer to feel comfortable, know when the time is right, feel familiar with the market and what is out there and, most of all, to be confident that they are making the right decision. That is what a Realtor does.
Before you start your search, your Realtor will be able to prequalify you in order to know exactly what price range of properties you should be searching and the availability of financing. I will initially sit down with you or, if you are not in Puerto Vallarta, speak or correspond with you about what you might be interested in seeing, your current needs and needs for the future, property “must-haves,” and any other special requirements.
I will explain the process to you, answer questions about payments and financing and generally be there to answer any of your concerns. When you are here in Puerto Vallarta, I will take you on a tour, showing you the properties I think fit your needs. I will listen to you regarding each property in order to refine the search criteria for your dream home.
When you decide that it is the right time, I will help you prepare an offer. Our offers are prepared in a double-column format in both English and Spanish so that you are not signing something you do not understand. Our standard offers will establish price and terms, a list of contingency items that must be satisfied in order to close and will set the closing date for the transaction, generally 30-45 days following the acceptance of the Offer. If you are not physically in Puerto Vallarta, the signed offer may be scanned and emailed to me and I will then present the offer to the agent that represents the Seller of the property.
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If you receive a counteroffer to the original offer, it may contain, among other things, a request for a new price and terms, an answer to information you might have requested, and other items. I will consult with you on whether or not to respond with another counteroffer, not responding at all (and letting the deal expire) or accepting the counteroffer as written and thus accepting the offer! Congratulations! This can all be done via fax or email with original signatures required once we have the final accepted offer.
Before we can proceed with the closing process, we need to review the contingency and due diligence items that we have requested in the initial offer and see which have been satisfied. I have a comprehensive list of documents I request in all offers which I think are essential in not only protecting my Buyers but also providing complete information on their new investment.
During the time you are reviewing the documents on the property, you will also have a chance to make construction inspections, obtain financing if that is a contingency, and otherwise determine whether or not you feel comfortable going forward with the real estate transaction. I usually allow for a period of 15 days for due diligence (longer if the property is commercial or more complicated). At the end of the due diligence period, you will either make the determination to go forward or you will decide against the purchase, and any escrow deposits you have made will be returned to you.
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It is the standard here in Mexico for the Buyer to make a good faith deposit into escrow in an amount equivalent to 10% of the agreed upon price. I use well-recognized title companies such as Fidelity Title, Stewart Title and others to hold escrow and the cost is usually about $650.00 USD. A few days prior to the closing, you will deposit the balance of the purchase funds into escrow where funds will be held until the closing date when Seller transfers title to you.
As the Buyer, you may or may not need to be present at the closing. If your presence is required, you can be here personally or grant a power of attorney to someone that you trust to sign documents at closing on your behalf. Your real estate agent cannot act as your representative in this aspect as it would be a conflict of interest. If you cannot be present, the power of attorney can be prepared for you to sign.
You will need to prepare to take ownership of the property and anything that might entail; hiring staff, hiring a property manager, preparing to assume the payment of the bills that correspond to the property once closing has taken place. I will provide you with a proration statement prior to closing to show what expenses were prepaid and must be reimbursed by you to the Seller at closing, if any.
Finally! The closing date is here! The Notary office will set the time of closing according to the schedules of both you and Seller and based upon the Notary office workload and availability. Generally, closings take place after 10 am and before 5 pm. Up to three days prior to going to the Notary, you will usually do a walk-through of the property just to make sure everything is in place. Once the Seller leaves the property after the walk through, they will not return. I will be with you at the walk through and at the closing to answer any questions you might have.
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At the Notary office you will review the paperwork with the Notary and closing coordinator to make sure everything is in order. Aside from the deed transferring title from the Seller to you, you will be signing disbursement instructions to the escrow agent which instructs the escrow agent where to send funds.
Once documents are signed, the Notary will send the escrow agent the disbursement and copies of the deed and funds will be released. You will get the keys from the Seller and the closing is complete! You will receive your final recorded “escritura” (deed) within about 6 months of the closing. In the meantime the Notary will provide you with a copy for your records.
I want to thank Maria O’Connor, Tropicasa In-House Legal Council, for her assistance in the assemblage of the important information incorporated in this article.
If you are thinking about moving to Puerto Vallarta or purchasing vacation or investment property in the greater Banderas Bay area, contact Tropicasa Realty Agent Grace Ramirez at 322-294-1816 or grace(at)tropicasa.com.
Buying a Home in Puerto Vallarta – A Brief Summary of the Process.