Buying Presale Property in Mexico
Congratulations! You have decided to purchase a new property in Mexico, and you have seen quite a few advertisements regarding presale properties. The prices are very attractive, you are being offered the first choice of units, and perhaps they have even offered to include other incentives like upgrades and furnishing packages. But what is a presale property? And what are the steps in purchasing one?
What is a Presale Property?
A property is considered presale if it is still under construction or a property in which the condominium regime has not been completed. The condominium regime is a document granted by a Notario Publico and recorded in the Public Property Registry.
What are the Steps for Selecting & Purchasing a Presale Property?
First, you will want to select a real estate broker who will help you find the right property. Once you have found a property you are interested in, you should ask your broker to find out the following information from the developer:
- Will the property be subject to a rental plan?
- What are the average HOA fees?
- What is the developer’s experience?
- If possible, ask your broker to show you other properties completed by the developer.
When you are ready, your broker will help you make an offer. Since an accepted offer will generally require a deposit, it is highly recommended that you review all documents with a lawyer before you sign them. A lawyer will be sure the deposit is refundable if issues arise during the due diligence and you do not wish to continue.
Once your offer is accepted, a Promise of Sale Contract will be drawn up. Again, it is critical that the contract is reviewed by a lawyer to be sure your interests are being represented. Your lawyer will also complete a due diligence process during which the following documents will be requested and reviewed against the public record registered with the municipal and state governments:
- Title of the property and tax information
- What kind of structure the developer has and who owns the company?
- Construction licenses
- Condominium regimen, if available
The Promise of Sale Contract will include:
- Developer’s legal background
- Purchase amount & installments
- Terms of the sale
- Penalties in case of non-compliance by either party
- Construction start and completion dates & delivery date
- Any other offers or promises made by the developer
Once the review is complete, the Promise of Sale contract will be revised, and you will review the contract with your broker and your lawyer before you sign. Remember, once it is signed, it is the absolute proof between the buyer and developer that a legal agreement has been entered into.
Remember, the Promise of Sale Contract is the only claim and evidence of purchase. It is not a title of the property. The property title can only be issued when the developer obtains its Condominium Property Regime.
For more information about presale properties or any questions related to purchasing real estate in Mexico, please contact our experienced team of real estate attorneys.