The Buying Process!  

The first step to investing in real estate in Puerto Vallarta, is to Decide. You need to be sure that you want to purchase real estate, in order to be happy with your purchase at the end. Many clients say, we should have bought years ago. You don't want to come back the following year after looking at property and find out that prices are higher.

Step two is to find the property. Take a nice vacation in "The Friendliest City in the World", Puerto Vallarta. Use a reputable realtor in order to be sure that you are only looking at properties that have no legal issues and are priced correctly. Make sure to use a realtor who you feel confortable with. If you feel funny about your realtor, it means you should use someone else. Make sure to see at least three or four properties in order to compare pricing in the area. Do not compare a condo on the beach, to a home away from the beach. It would be like apples to pears. Some of your questions about the property should be, what can the property rent for? How hard would it be to rent? This does not mean that you would rent out your future property, but it gives you an idea of how sought after is the area. Remember in real estate it's all about Location! Location! Location! Try looking at the property that you liked a couple of times before you leave. Take your own pictures if possible. Once you have picked the property, you can enjoy the rest of your vacation. You do not need to be here in Sunny Puerto Vallarta for the process. You can go home and everything needed can be handled over courier.

Step three is making an offer. The best thing to do is to make a good offer to start with. If the offer is too low, the seller might not be happy with it, and at the end you might have to pay more than you would have if you had started with a good offer. Writing an offer should only take a couple of hours, once your realtor receives the right paperwork from the seller's agent. Follow the link to see a draft contract (offer to purchase). Expect a counter-offer and be ready to counter-offer once more. The seller has the right to not accept your offer. If you feel you want him to commit already, accept his counter-offer.

Step four is going into escrow (deposit). Keep in mind that you will never pay any money for the purchase up front to the seller before the closing takes place. Escrow accounts are opened with First American Title Insurance Company, Monex, or Stewart Title. The buyer will be required to deposit 10% of the sales price within one week after the offer is accepted. Your realtor is responsible to open this account.

Step five is picking a notary. Your realtor should get three different estimates from different public notaries to find the one with the best deal. The difference is not much. In order for the notary to get started with the paperwork, the buyer needs to deposit 50% of the closing costs directly to the notary. The balance will be payable at the closing. The closing costs should adjust after the appraisal is done. This is because the closings costs are based on appraisal value, which is less than the sales price in most cases. Please keep in mind that notaries in Mexico are not like Notaries in the United States or Canada. Notaries are federal appointed officials, awarded by the state governor. Notaries have to be attorneys first, before even considering on being Notaries. Notaries have public faith, which means they are more like a judge. The following concepts are part of the closing costs. These would be required to set up a Bank Trust. This includes all bank fees for the first year.

1. ISAE (property acquisition tax).

2. Public Registry Rights

3- Appraisal by Authorized Valuator

4. No Liens Certificate

5. Property Tax Certificate

6. Notaries Honoraries

7. Notaries Legal Expenses

8. Bank Fees

9. Permit

10. Notice to Foreign Affairs

Step six is the Closing. Depending on whether the seller is a Mexican National or Foreigner, the buyer may not need to be here for the closing to take place. In the case that the seller is a foreigner, the buyers have to be present for the closing, or the buyer has the right to send a power of attorney for somebody else to sign at the closing on his behalf. If the seller is a Mexican National, the buyers do not need to be present for the closing. The bank officials will be present at the closing. The buyers sign forms for the bank and send them via courier, they are needed in original. At the end of the closing the buyer gets a copy of what the original bank trust will be. The original bank trust will be ready in six months or less. This is how long it usually takes for the public registry. After the closing, the buyer is the legal owner of the property and there is no way anybody can receive rights to the property unless the buyers sign away the property.

Enjoy your new life!