To some it feels like a different planet searching and buying properties in Puerto Vallarta, especially when compared to the U.S. and Canada.
Here’s a simple primer on a few things you should know before embarking on a search for the ideal property.
AMPI: Asociación Mexicana de Profesionales Inmobiliarios
In Mexico, unlike the U.S. and Canada, real estate agents are not a licensed, regulated body of professionals. Since virtually anyone can present themselves as a real estate professional, a non-profit agency was established in order to established standards of conduct for the industry.
From the AMPI website:
AMPI has published ethical and fiduciary standards that its members are required to maintain. Those standards provide some assurance that the often complex process of a real estate transaction is less likely to go awry through a lack of due diligence on the part of the real estate professionals.
The bottom line is this; to ensure quality of service, integrity and knowledge, be sure that your agent or realtor has AMPI accreditation. Read more about AMPI from an earlier article published on Ron Morgan’s blog or visit the AMPI website.
Fidecomiso Bank Trust: How Non-Mexicans Own Property
In the 1970’s, a foreign ownership program was created in Mexico to encourage non-Mexicans to invest here – before then it was prohibited.
Simply put, for a small yearly fee, the Fidecomisco (bank trust of the buyers choosing) acts as the Trustee/Purchaser for the buyer. On your behalf, the trust is held by the bank but is not considered an asset of the bank.
Read more about Fidecomiso right here in an earlier blog piece.
Although it may appear at times – and many assume – that most purchase procedural activity, offers etc are spelled out English, all contracts must eventually be translated into Spanish. Be sure that your lawyer is fluent in both languages.
There is a detailed list of procedural steps in order to complete a home purchase/ownership transaction. If, like many buyers, you wish to know every step along the way, it goes something like this (and please bear in mind this is a simplified list – your agent will guide you through every step)
Finding a Property
- Once you find a property, you write the offer and condition of sale.
- Once the offer is accepted, all docs are signed, initialed and dated.
Once the condition of sale is agreed upon and signed, the buyer has a predetermined amount of time to provide documents, meet the condition of sale, financing, and accept the inspection etc.
- Documents must be reviewed by lawyers.
- Escrow contracts are completed.
- Deposits are wired to financial institutions.
- Buyer must send deposits to lawyers.
- Buyer will supply IDs, proof of address, etc in order to set up the Fidecomisco.
- Seller’s Fidecomisco bank must review all documents.
- All utilities, taxes owed on the purchased property are settled between seller and buyer.
- Finally, the buyer receives keys and a detailed account of costs, purchase price, notary closing costs.
Simple as it may sound, the process takes time, patience and experience. It’s always best to involve a trusted, bilingual lawyer and AMPI-certified agent to manage the steps. Do not try to do it all by yourself.
For more information regarding any of these items please contact Ron Morgan at +52 322 222 66 78 or by email.