When you're ready to think about buying or selling your Vallarta property, you need to ask yourself the following questions: Do you have the time, energy, sources of information, and contacts to buy or sell a property in Mexico? If you were one of the "do-it-yourself" people, would the results be as good or better than they would be if you had professional assistance? Would it have gone smoother? Would it have given you more personal time? Would you have purchased for less, or sold for more, if a real estate agent was involved?
The acronym FSBO stands for "For Sale By Owner", and is commonly used in the USA and Canada to denote a person or family who have decided to sell their home on their own, rather than use the services of a real estate agent. It may work well north of the border, and there are a number of services available today to assist one with the process. But in Mexico, it is another matter and anyone considering taking the selling process into their own hands should consider the following:
Are you available at all times to show the property?
Most Canadian/American homeowners in Puerto Vallarta are here only part of the year, so it can become difficult at times to show the property when out of the country.
Do you speak Spanish?
Not all prospective buyers may speak English, so if you don’t speak Spanish, you’ll be at a disadvantage. It is also important when it comes to closing the sale, for in order for contracts to be legal they need to be in Spanish and you are going to want to ensure you understand every clause in the agreement. The same goes with working with a Notary, who will have to be involved in the sale, and perhaps a real estate lawyer.
Do you understand Mexican real estate law?
Just because you may have sold a property back home doesn’t mean you understand how real estate law works in Mexico. If you don’t, you’ll want to have someone represent you, such as a lawyer, to ensure that what you are selling is properly defined in the agreement.
Do you understand how the sale may affect you fiscally?
Capital gain laws seem to be changed or adjusted every year, and if you don’t know how to best set yourself up fiscally for this, you could end up paying a large capital gains tax.
How will you market your property?
Most real estate in Puerto Vallarta is marketed and sold using a MLS service, and this service is only available to real estate agents and agencies. The MLS, or "Multiple Listing Service", distributes the information of all properties to member agents through an online portal. As well, it is available for the public to use and see. But only real estate agents can publish properties in the MLS systems most used in the region; Flex and MLSVallarta. There are other outlets available for marketing your property, but not as good and they have a cost, which you have to pay for upfront. Whereas if you are using a real estate agent you only pay for marketing when you have sold the property, at a price that you are willing to accept, less also the commission. The same goes for advertising online or in print publications; you have to bear these marketing costs.
So if you didn’t answer yes to the questions above you may want to talk with a realtor. Read the following information and learn how a real estate agent can help you understand everything you need to know about a real estate transaction.
The Buying Process
The process of buying a home or investment generally starts with determining your buying power; that is, your financial reserves plus your borrowing capacity. If you give a real estate agent some basic information about your available savings, income and current debt, they can refer you to lenders best qualified to help you.
Once you know how much you can and want to invest, the next step is to find the properties that most nearly fit your needs. This is the time to choose a real estate agent that agrees to abide by a strict Code of Ethics. Our members have many resources to assist you in that search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
Your job is to make the final selection of the right property for you. This is when excitement and emotion run high. Your real estate agent can assist you in the selection process by providing objective information about each property. Agents who are members have access to a variety of informational resources. Members can provide local community information on utilities, zoning, schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
There are a myriad of negotiating factors, including, but not limited to price, financing, terms, date of possession, and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should also provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
As soon as you are reasonably sure the property is right for you, the process of obtaining financing, if necessary, begins. Your agent can help you in understanding different financing options and in identifying qualified lenders. This is something relatively new in Mexico, but financing is available.
Closing or Settlement
Finally, there is the closing, or settlement, as it is known in different parts of the world. Every area has its own unique customs. Your agent can be the best source of information regarding a swift and secure transaction. Again, your real estate agent can guide you through this process and make sure everything flows together smoothly. This can actually be the most important part of the whole process, and ensuring that your title is transferred properly.
It also involves establishing a trust account (or Fidiecomiso, as it is known in Mexico) with a Mexican bank, which foreigners need to use in order to own real estate along the coast of Mexico. The trust system has been used for over 25 years in Mexico, offering a manner in which foreigners can actually obtain property in the country. Your broker can help explain this in more detail.
Property Management and Maintenance
If you purchased a property for investment purposes, your agent can be instrumental in the realization of your financial goals through a continued representation of your interests. All member agencies have 'in-house' property rental programs featuring marketing, tenant screening, collections, automated payment services, maintenance programs, etc, that can be tailored to your specific needs.
Selling Your Real Estate
This process generally begins with a determination of a reasonable asking price. Your real estate agent can give you up-to-date information on what is happening in the marketplace and the price, financing, terms, and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
The next step is a marketing plan. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, a large percentage of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer.
Your agent acts as the marketing coordinator, disbursing information about your property to other real estate agents through Multi-List associations or other cooperative marketing networks, open houses for agents, etc. The Multi-List Code of Ethics requires Members to utilize these cooperative relationships when they benefit their clients.
There is a misconception that advertising sells real estate. Studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends and family, and personal contacts.