Puerto Vallarta Real Estate Articles

Costs associated with a purchase: In the restricted zone, a buyer holds the property within a fideicomiso, which requires payment for a permit from the federal government. The cost of notary fees, tax appraisal, bank administration fees, acquisition tax, can amount to 6-10% of the sales price. You can ask for an estimate of costs from the notary beforehand, to better estimate your overall costs to purchase.
A seller has the responsibility to pay or receive a waiver of capital gains. He may also have cost of the trust transfer or cancellation, as well as utility expenses to date of closing. The seller has agreed to pay commission fees if he has signed a listing or specific agreement.
A public notary is an attorney with specialized knowledge related to the transfer of real estate. The notary is appointed by the state in which he/she is authorized. The notary also handles registration documents such as powers of attorney, corporate information, wills, official witnessing, as well as collecting taxes owed to the government.
If you want to have representation in real estate legal matters, you will need to hire your own. The notary is responsible for being neutral and fair to all parties, but he cannot advise you as a client in a transaction in which he is acting as the notary. If you know the law and are fluent in legal Spanish terminology, you may want to take the risk of not having legal representation. You may also want an accountant to represent you in examining financial documents, if you are buying a property with cash flow.
There are no inspection companies per se created for the purpose of inspecting and giving reports on the condition of a property. If a purchaser wants to have the plumbing or structural foundation inspected, he needs to find and hire the best expert he can find with this specialized knowledge. These experts are not insured or bonded. It is up to a buyer and seller how they want to handle the results of an inspection.
In general, sellers wish to sell "as is" and are not used to having inspections or repairs as a part of the offer. Because there is no standard practice of requiring a seller to make repairs and no lender or government requirement, a buyer needs to address this issue at the beginning of the negotiations. If an inspection is important to you, bring it up in the beginning of the negotiations.
Capital gains tax applies to owners of real estate when they sell, unless they meet the requirements of the law, which allow them to waiver or not pay this tax. You will receive a lot of information and advice from different parties on this subject. The notary public is responsible for collecting this tax and he determines what a seller needs in order to be exempt from capital gains. Do your homework before you sell, find out exactly what the notary requires. Check the country where you have your citizenship to know if you also owe tax there.
Hacienda is the national government agency that levies and collects taxes. This agency is the equivalent to the IRS in the USA. Taxes are owed on services and products, including real estate. If you buy or sell real estate, find out what taxes are owed, and who is suppose to pay them. Get a receipt from the notary if he has paid capital gains taxes for you to Hacienda.
The notary orders a tax appraisal on the property being sold. It is customary for the buyer to pay this cost. Market appraisals are rare. There are few appraisers that work in this specialty in Mexico. Because of the difficulty of knowing actual sales prices, it is difficult to obtain sufficient information for a comprehensive market appraisal. It is difficult, but not impossible to do.
A survey can include the boundaries of the lot, a topographical of the grade of the land, and the foot print of the dwelling. The escritura or deed will include a description of the boundaries using north, south, etc. and give the total number of meters. The deed may have a copy of a plat or survey showing the dimensions of the lot.

You need to decide if it is important to you to have a new survey. You will need to shop for a professional, reliable and honest engineer to do this work. If a new survey is not done, the information in the existing deed will be copied onto the new deed. The notary's office can check with the city-planning department for their records of the property dimensions. Older developments were surveyed aerially, so there was less exactness in the property lines. Consider paying for a new survey as part of your closing costs.
Realistic sales prices are higher to determine when there is less accurate public information available. Resort property is many times an emotional purchase and this influences the sales price. If you are a seller, ask your listing broker to give you their research on actual selling prices. Selling prices can be analyzed with different criteria. The date of a sale, the size of the home and land, the location, the amenities, all influence an overall value. The date of a sale is important as well.

Adjustments for pluses and minus of the subject property can be made to determine a range of an expected sales price. If a property is sold at a much higher or lower than others that are comparable, don't take these two extremes into consideration. If you are a buyer, don't get off track with discussions just about asking prices within a neighborhood where you have an interest. Asking price is not a verification of actual sales prices.
A verbal offer is valid if it is for a specific property and there is an agreed upon price or compensation to the seller. If there is consent on the terms of the purchase: price, method of payment, and the specific property. As a practical matter, a sales contract should be in writing in order to give the buyer, seller and other parties a framework to go by in the process of a transfer of property.

This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer conduct his own due diligence and review.