BEFORE BUYING A PROPERTY, STEP NUMBER ONE SHOULD CONSIDER IN THE BUDGET THE ADDITIONAL EXPENSES UNKNOWN TO MANY, AND SECONDLY THE LOCATION OF THE PROPERTY.
1. Budget: It's important to factor in the costs of the deed process, which in Mexico is around 7% of the total property cost, plus bank fees, as well as the additional expenses you'll incur to live in the property. Many developers deliver the property without a gas tank, appliances, a kitchen, or curtains. There are even developers who, upon delivery, request fees of up to $100,000 pesos for equipment or the establishment of the condominium regime, or even for the first maintenance fee.
Therefore, consider an additional 10% of your original budget as expenses beyond the total cost of the property.
2. Location. This is a crucial issue, regardless of how attractive the price or the development's visual appeal may be. Don't be guided by renderings. Always investigate whether the area has sufficient roadways for the future and whether there is basic infrastructure for future services. In Mexico, it's very common for communication routes to become saturated over time or for developments to be left without basic services like water supplies. This ultimately damages the value of the properties and their quality of life.
3. If you are a foreigner, please note that to legally purchase and own property in Mexico, you will need to do so through a trust. Therefore, you will at least need to consider the notary fees and the issuance of the trust in addition to the property's cost.
BEFORE SIGNING A CONTRACT, MAKE SURE THE DEVELOPER HAS ALL THE APPROPRIATE DOCUMENTATION, AND THAT WAY ENSURE YOU WON'T BE A VICTIM OF FRAUD.
Historically, in Mexico, there have been many cases of developments that do not legally have all the necessary permits and documents issued by the authorities. Therefore, it is necessary to check that the developer, in the case of a new development, has each and every one of the following documents:
1. Deeds (Legal Ownership of the Land)
2. Land Use (Permit to develop on the site)
3. Environmental Impact Statement (This is a fundamental document in many beach destinations)
4. Construction Permit (Permit to build)
5. Condominium Regime (Permit to subdivide the property)
6. Completion of Construction (Occupancy Permit)
If the developer doesn't have these documents, you're very likely to face legal problems in the future, such as foreclosures, or being unable to register the title deed or even occupy your property. Excellent advice would be not to buy until you've verified that the developer has all these documents.
As additional legal documents, it's important to review the feasibility letter from the local water and sewer service.
If you're purchasing a property that isn't pre-sold, or that no longer belongs to a developer or private individual, the documents you'll need to legally purchase the property are the deeds and the property tax. The notary public through whom you make the purchase can be chosen by the buyer, and they will be required to verify the legality of all the documentation.
It is always advisable not to make any payment or deposit without first having the contract in your possession and reading it completely. Keep in mind that by law in Mexico, all developer contracts must be approved by the Federal Labor Federation (Profeco). Protect your assets by verifying this and take into account the following points:
1. Payment Schedule: This will be the most important point and must always be tied to a percentage of progress. We recommend that if you purchase a pre-sale property, the percentage of the amounts you have paid be tied to a date and percentage of development progress, creating a delivery date from the developer for your invested capital. You should consider that this must be very specific, with a delivery date by which, if the developer fails to comply, you can be sure your assets are not at risk.
2. Carefully read and understand all contract clauses. The developer may have clauses that oblige you to accept your property in any condition, including poor condition, or to continue making all payments, even if the developer hasn't made any physical progress on the project. We strongly recommend asking the developer to change these types of clauses.
3. Settlement Clauses: Keep in mind that securing your property title is crucial to ensuring legal certainty of ownership. Always consider leaving the largest possible final settlement payment against your property title.
CONSIDER BEING VERY ATTENTIVE WHEN YOU RECEIVE YOUR PROPERTY, HIDDEN DEFECTS AND POSSIBLE REPAIRS CAN PERSIST FOR YEARS.
When you receive your property, there are quality aspects that you should demand from the developer:
A) Immaculately finished. You are purchasing a new product; you should not sign for receipt if the woodwork has scratches, if the floors are chipped, if there are cracks in the walls, scratches on the windows, or if any services such as water or electricity are not working properly.
B) 100% completed development or infrastructure. You purchased the property with all the amenities, roads, and services. We recommend not accepting your property if they are not 100% complete. A developer could take months to complete them and achieve the promised quality.
C) Verify that the developer has complied with NOM-247. This Official Mexican Standard protects real estate buyers. By law, every developer in Mexico must comply with it. It is nothing more and nothing less than a regulation that requires developers to deliver to the client exactly what they sold in the renderings and information described. If, upon receiving your property, you are not receiving what the developer promised, this Official Standard protects you at all times.
D) By the time you physically receive your property, you should have already signed the deeds, or you should already have an appointment and date to do so. Visit your trusted notary to verify that all the documentation is complete and legal before signing a receipt and fully finalizing your payments.
Nuevo Vallarta
Avenida de las Palmas N.3
Interior 13, Nuevo Vallarta
63735. MEX.
