With a super first quarter of 2013 behind us the Puerto Vallarta real estate market looks like it will be following in the footsteps of our neighbors to the north. Mexico’s strong economy and the demand for lower living costs along with the lifestyle foreigners can find in Mexico, Puerto Vallarta is poised for a strong 2013.
Rebounding housing prices in the United States are helping the US baby boomers have more confidence in purchasing that retirement home they have been putting off. If prices are rising in the US it won’t be long for that trend to catch up in Puerto Vallarta,
As we are usually 8 months to a year behind the real estate trends in the US whether they are declining or rising. This could make the market tricky territory for buyers to navigate. While it stood stagnant for several years after the housing bubble popped, today’s market is headed for robust, particularly in Puerto Vallarta areas like the Romantic Zone with its new construction projects as well as Amapas, Conchas Chinas, and even the luxury end of the market on the South Shore.
Competition will be fierce among those looking to purchase new homes during this year’s growth, but there a number of ways sellers can be persuaded to accept an offer below their asking price. According to a March survey by Fannie Mae, 41 percent of buyers expect home values to increase over the next 12 months. The sound of a promising investment has a lot of consumers looking to broker a deal in the near future. But inventory in the housing market will be more and more limited in Puerto Vallarta, especially for the better finds. Coupled with aggressive competition, that presents a host of challenges for prospective buyers.
Arguably the biggest handicap is a seller’s market. Home prices in the US saw an 8.1 percent jump in January 2013 compared to last year, marking the largest hike since 2006. Those trends should follow us here in Mexico’s beach communities as well.
Consider these tips on how to purchase the home you want at a reasonable price:
Know your creditworthiness. If you know you want to get a loan, before diving into your search, check your credit report for errors. Consumers are entitled to one free report per year at www.annualcreditreport.com. The process for fixing mistakes can be time-consuming, so it’s important for buyers to look at their credit history several months before starting their housing hunt.
If your credit isn’t up to par, devote time to paying off bills and revolving credit card debt. Those with a credit score of 700 or above typically get a better interest rate on their mortgage, so it may be worth waiting until you inch over that hump before applying for a loan.
Get preapproved for a mortgage. Many buyers make the mistake of browsing houses before applying for a mortgage. “There’s no point in driving around the neighborhood to look at houses without seeing a lender first,” says Taniel Chemsian of Timothy Real Estate Group. Pre-qualifying buyers can determine their price range and avoid wasting time looking at properties they can’t afford.
In today’s market, being preapproved for a loan is a must.
Find an Agent you trust. Consumers who house shop without a real estate agent put themselves at risk, especially in Mexico, largely because a typical homebuyer doesn’t have contacts in the local industry to know what homes are for sale that aren’t publicly listed or know how purchasing in Mexico works. Most buyers don’t know the tricks to brokering a deal, which can ultimately cost them a lot of money and aggravation, especially if they don’t know what documents you need to request from the seller. You’ve heard it before, “Buying a home is one of your major purchases in life.” Why would you want to do it without an expert guiding you especially in a foreign country?
Decide where you want to live. “When you buy a home, you’re not just buying a home–you’re buying a neighborhood,” Stella Leavitt says. Everyone’s needs vary, depending on their stage of life: Couples raising a family care about the school system, safety and job opportunities; singles pay close attention to entertainment, nightlife and the percentage of unmarried residents; and retirees survey the nearby hospitals, senior care and recreation activities, such as golf or tennis or proximity to shops, restaurants, and social events.
With so much data at your fingertips–it’s particularly important to have an agent by your side. “The data is accessible, but it’s easy to misinterpret it,” Donna Davies at Timothy Real Estate Group says.
Peruse your options. This is the fun part. Start by scanning the Web for homes that pique your interest. Listings without photographs are easy to eliminate, as they’re usually an indication the property isn’t exactly visually flattering and the listing agent isn’t very professional. Savvy smartphone users can drive around their desired neighborhood and use a mobile device like Timothy Real Estate Group’s mobile web site, which pulls up information on nearby houses for sale. With less inventory and buyers ready to pounce, get in the habit of checking for new listings every few days. Ask your agent to set up automatic emails from the MLS system with automatic updated new properties alerts.
Price check. Sellers use comparable homes to determine their asking price, but buyers can use them to help determine a property’s fair market value. Focus on those that have sold within the last 60 days.
Many people mistakenly review asking prices of nearby homes on the market when determining their offer. “Anyone can ask any price for a home, so don’t get bogged down by looking at what’s currently on the market,” says Luis Muñozcano, an agent with Timothy Real Estate Group, it can be beneficial to look at what houses have been sitting on the market for a while, since Muñozcano says there’s a reason why they’re not selling.
Do a full inspection. Even though it’s a competitive market, don’t feel pressured to skip the inspection. It’s a critical step for both ensuring the home is safe and uncovering any areas that will require renovating. If you’re making an offer, agents advise clients to make it contingent on a satisfactory home inspection.
A general home inspection typically costs anywhere from $200 to $500, although companies may charge more for large homes due to the extra square footage they have to evaluate.
Frequently, roofing, chimneys and sewer lines aren’t included, as most general home inspectors aren’t experts on those areas. Certain regions also require geological inspections. For example, with hillside in some areas, buyers can pay for an inspection of the soil conditions of the property, how the home was built and the age of the house, since those factor into how risky the home is in terms of damage from an earthquake or other natural disasters.
The buyer at the closing table can use inspections that reveal needs for improvement as leverage. Many times, a seller will agree to lower the price of the home or offer a credit to cover some of the closing costs. However, professional agents will say, “Don’t expect you’ll get that $10,000 credit you want, but do what you can to convince the seller it’s a reasonable request.”
Discuss closing costs ahead of time. They vary by a property’s value, but closing costs typically range from 4 to 5 percent of the purchase price. These costs can add up significantly, to an amount some budgets may not be able to bear. Simply because people hear the word “closing” doesn’t mean they should wait until the close period to discuss the costs.
Present your offer. If you’ve done your research, consult your agent to determine your offer. Although there may be less room today for negotiating the purchase price than in the last few years, ultimately, the market value is what a buyer’s willing to pay and what a seller is willing to accept.
Timothy Real Estate Group – An innovative company setting new standards in property sales and services has combined the most thoroughly professional and experienced talents to keep clients informed about the intricacies of Mexican real estate ownership, local real estate markets, local codes and regulations, financing, rentals and perhaps most importantly, sound analysis for every aspect of real property ownership. With combined real property services experience of more than 35 year’s worth of real estate sales, accounting, management, and property services, Timothy Real Estate Group is unequaled in its professionalism and experience with foreign investors. Ask about our Real Estate Listings