You ever wondered how’s the exact process of buying properties on this tropical paradise? On this guide, shoreline is providing you all the information you need that will give you and advantage and also make you understand the process, so it doesn’t feel stressful.
Macroeconomics of the world that led to Mexico in becoming the favorite for international investors
First we should answer one important question, why I should buy a property in Puerto Vallarta and Bahia de Banderas? We should take in consideration the big picture. Mexico as a country is positioning itself to be a big player during the upcoming recession of 2023. While a lot of countries took either slow or unnecessary decisions during the 2020 pandemic, Mexico responded really well and made investors globally realize that they are a good option to invest in here because of the way that businesses and also the way governments handled the situation. While places like in China still have crazy and horrific COVID lockdowns, Mexico has a great coverage of vaccines people and the cases are barely showing around the country. Why COVID is still important in all of this? It shows how governments handle the private and public industries that are crucial during a development of a region. China was handling a huge volume of exports and producing so much that when the lockdowns happened and nothing was being produced, companies all around the world started to look elsewhere to not rely on production in such controlled country. Adding up to the problem that one of the biggest developers in the world originally from China had to go bankrupt and leave hundreds of thousands of homes unfinished.
China was not the only country to start having problems. The Europe Union are currently experiencing crisis thanks to an ongoing war with one of the world’s superpowers, Russia. This war is making things complicated more than they currently are and people are starting to look into alternatives where they can put their money without the fear of getting into the war, losing currency value or even worse, risking their families lives.
While Mexico might not be a perfect country, it had definitely shown a sign of progress. People are starting to realize that Mexico is not only a paradise of expensive all-inclusive resorts or that in most of the touristy cities are safer than other places around the world.
Now that we got to see the whole picture, we can start talking about why specifically Puerto Vallarta and Bahia de Banderas are a good option to invest in real estate and possibly making it your permanent home.
Why you should invest in Puerto Vallarta and Bahia de Banderas?
One of the main reasons people look into the possibility of investing in the region is that it is a tropical paradise. The area is a beautiful landscape of gorgeous beaches, jungle and mountains, people once they step a foot in here and experience the lifestyle personally they get to fall in love with one of the true wonders that Mexico can offer. Lifestyle is a main factor here because it involves a lot of things like the people that you will meet, the places you will go or even how much money you will be spending to live there. This place checks many boxes for a perfect lifestyle, everyone is extremely nice and serviceable, with most of them with great English level. The places you will go are full of variety, and you will enjoy yourself and find the right spot for you doesn’t matter the location while also not breaking the bank because prices and living expenses are just a fraction compared to most of the main cities around the world without lowering any standard of living. A lot of neighborhoods in Puerto Vallarta and Bahia de Banderas are growing superfast, taking advantage of the growth this place has is perfect for the first time real estate buyer. Land value and listing prices are continuing to grow, while the demand isn’t slowing down. While buying is a huge part of making wealth, buying strategic properties can actually pay your investment overtime through rental income, while not immediate of course your cap rate can be excellent and start collecting actual passive income.
Before you start your process of purchasing a new home
So now that you know a few key reasons of buying real estate in Puerto Vallarta and Bahia de Banderas, how exactly it is the process? The process of buying the property of your dreams is actually pretty simple and straight forward, the only thing you might experience that is not as enjoyable are the legal paperwork and the awful government timing. Now that you know this, It’s pretty easy to move forward. You have two options, either to buy all with one payment or use a loan. If you have the capital available for purchase, you have pretty good power during the negotiation. When investing in pre-construction, you can actually qualify for a great discount or if purchasing an already finished home, you can maybe negotiate some of the price down if they show your interest in moving forward fast. If you’re using a loan, they are a few options available for foreigners that can adapt to your desires and help out in getting your property down here.
You identified the right property, you did your research with the help of your trustworthy realtor, and you are ready to move forward. What is the first step?
The first step to buy real estate in Puerto Vallarta and Bahia de Banderas
Offer stage and documentation check
First is the negotiation or offer stage. During this time with the help of your realtor you should find ways to get the perfect price, this usually starts with a formal letter with no commitment to the listing agent or owner In which you state your desired price, your intentions and maybe why you are the best candidate for purchase. Before going forward with anything or sending any type of payment, please make sure of this important factor. The house in order to be purchased correctly must have a deed / title or “escritura” with the name of the current owner / seller. This document is super critical, if the original copy is not certified by a notary then it’s an immediate red flag. Do not purchase any property if it doesn’t have this document. Besides the title, one key factor is that the house must be registered in “registro publico”, This entity verifies that the property is free of any debt like mortgages or collateral deals that the owner could still owe. If you purchase a property without the registration you could be having a lot of headaches, there are exceptions that the property might not have this like in pre-construction or if the property is currently in the process of being registered, it’s important to check exact details of your situation with your expert realtor.
Formal offer and gathering important documents
If the letter is agreed or if a renegotiation reached an agreement now it’s time to move forward and do a formal offer of “compra venta” this contract basically ties all the parties and makes it official to move forward. On this document you will find a lot of information about the property, clauses of the purchase, realtor commissions, what’s included in the purchase, penalties if cancellation and more. Once signed, it is important to do a property inspection to see if the property might have any hidden flaws that can make you reconsider the purchase or price.
After the purchase contract is signed, your realtor should be able to have a notary of trust that he can connect you with and guide you through the process. With the notary, a lawyer will be assigned to your transaction and help you out in coordinating the closing. Purchasing the property is not only the listing price, you have to add up the closing costs that could be up to 7% of the property purchase, the price could vary depending on factors like honorariums of the notary, fees, taxes and more. After you decided with what notary to move forward, you will be required to pay 50% in advance, so they can start the process of the closing. During this time it is normal for them to request your personal and detailed info that it is important to comply by law. Also, they will be requiring documents that have to do with the strict money laundering laws in the country.
Bank trust or “Fideicomiso”
One of the important steps of foreigners acquiring property in Mexico in certain areas is that you will need to set up a bank trust or “fideicomiso”. By law, some places need foreigners to have a trust to purchase a property. This trust is basically a loophole in the law that will allow you to rightfully own a place here. The trust can have a duration of 50 or 100 years and have to be renovated. This is included in your closing costs that are quoted by your notary. This step usually is the reason that makes the purchasing process a little slow, could take up to a month to set up one, so it’s important that with a correct notary and lawyers with right connections can help with getting good prices and fast times.
Final details and closing
After some time you should be able to have a closing date, once the date arrives make sure to have your documents ready for the day. These documents are your passport, immigration form provided by the airport and any specific things detailed by your closing lawyer. At the signature date, make sure that the lawyer explains to you what are you signing and that all required fields are signed. Make sure you sign with blue ink and at the end you are provided with an original copy. One important tip is that it is stated that nothing is owed by the owner of the property. Get letters signed in original by the water, electricity services, property taxes that nothing is owed.
Congratulations, you are a new tropical homeowner!
And just like that, you are a rightful owner of a tropical home in the beautiful Puerto Vallarta. After you close and get the keys, everything should be set up and ready to enjoy your newly purchased property. The process sometime seems harder than it seems, but with the right knowledge and guidance everything turns to be enjoyable and stress-free.
Looking to purchase your next tropical home?
Shoreline loves to help everyone that is looking to purchase, sell or rent a property in Puerto Vallarta and Bahia de Banderas. Since 2018 we’ve been helping people reach their dreams or achieve financial goals with our great knowledge of the market and complete insight of the macroeconomic factors. We are committed to guiding you during the process and solve every question you might have.
If you’re looking for real estate in Puerto Vallarta, real estate in Bahia de Banderas, property management, buy house in Puerto Vallarta or buy condo in Puerto Vallarta, Shoreline Realtors in Puerto Vallarta can help. Visit www.shoreline.mx for more.
ES 
EN