The real estate market is thriving throughout the Banderas Bay area. This is a wonderful time to consider buying Pre-Construction: Developers are bringing new projects to the area and expanding to surrounding areas throughout Jalisco, Nayarit, Compostela, and beyond. To the north and the south of Puerto Vallarta, new projects abound.
Buying Pre-Construction in Puerto Vallarta
The Banderas Bay has weathered the global pandemic (investors think in decades, not years or parts of years) and construction activities are at levels unseen and unheard of in the Pre-Construction market for quite a long time.
New projects make economic sense for developers and buyers when an active market is in progress. Some developers are initiating projects on a property they have held in inventory, others are actively buying developable land. It is a refreshing change after almost eight years in which few new projects were launched.
It is common for reputable developers to offer pre-construction discounts as an incentive to buyers. Although there are numerous payment plans available, typically … the buyer makes a down payment, and then through the course of construction, they make monthly payments, with the final amount owed payable at the closing. It is a win-win for the buyer and the seller. The buyer gets a condominium secured at a predetermined price and the seller benefits from cash flow and secured sales.
Investing in a foreign country feels risky to some buyers, so it is important to consider risk management as a part of the buying decision. The key factor is to ask the right questions and assess the answers you receive. AMPI Vallarta y Compostela strongly suggests that you do as much due diligence as possible throughout the entire process.
Keep in mind that thousands of condominiums have been successfully purchased under the Pre-Construction formula. However, there have been a few cases wherein the buyer has ended up unsatisfied for a variety of reasons. Your AMPI Vallarta y Compostela real estate professional can give you guidance and advice so that these situations are avoided.
So how do you maximize your opportunity for successful negotiation in a Pre-Construction purchase and keep your financial risk to a minimum?
Eight Steps to maximize your success in purchasing Pre-Construction and lowering your risk
1. Look for an AMPI Vallarta y Compostela agency-listed development. If the project is listed through FlexMLS as a Pre-Construction project, it will have already met a rigorous standard of scrutiny and vetting. (If it is not listed as development through FlexMLS, choose an AMPI-affiliated agent to help you scrutinize the development.) Ask for agent credentials and references and have your AMPI real estate professional follow through on checking these with you.
2. Legal due diligence: Confirm that the Seller is the legal owner of the property or has a legal contract of sale or transfer from the owner of the property. Insist on seeing the deed (escritura) for the property on which the construction is to take place.
3. Building permits: Confirm that the Seller has current/paid-up construction permits in place for the project contemplated. Also ensure that the developer has contracts in place, or at least provisions made, for all required services, such as potable water and sanitary services, electricity, internet connectivity, etc.
4. Confirm the reputation of the developer. Ask for references from happy previous clients and verify these.
5. The same goes for the master broker/marketing entity. Confirm his/her/their history, reputation, and experience in Pre-Construction projects.
6. If the project is in or adjacent to the Federal Zone (this usually means oceanfront) be sure that the seller has an appropriate Concession in place which permits the contemplated project. An environmental impact study is required as part of this. Ask to see this.
7. Finally, be sure you are happy with the sales agent with whom you are directly dealing. Do they understand, and can they explain to you the legal structure on which the development is based?
8. Have the sales contract fully reviewed and explained to you by a competent individual. This can be your AMPI Vallarta and AMPI Compostela real estate professional, though a real estate lawyer should also be considered.
At the end of the day, the Developer’s reputation (for having successfully delivered projects of a similar scope in the same region), and your AMPI real estate professional’s references (of satisfied past Pre-Construction project customers) will combine to give you the security you are looking for.
If you would like further information on this topic or help, please find the link to our agency page here. Our agents will be happy to assist you.
