By Sun Special Report from the December 2010 Edition
ALL IMPORTANT QUESTIONS ABOUT BUYING REAL
ESTATE IN MANZANILLO
Written with the help, input and expertise of some of Manzanillo’s finest realtors
You have been on holiday to Manzanillo on several occasions, love it and wonder, is it possible to buy a place here for yourself? The answer is that it is most definitely within the realms of reality and we will explain the circumstances to the best of our ability and with the help of our many professional friends.
In Mexico, the known factors in buying a home or property in ones own countries are being replaced not only with different rules, such as those surrounding foreign ownership but in dealing with a major purchase in a different language. How to find a good Real Estate Agent in the first place? Ask others who have purchased, who they have used and whom they would recommend or check the listings on the Manzanillo Sun’s website. When choosing an agent initially, ask if they work with other agents and company listings, or solely promote their own listings.
The best advice we can offer is to be aware that it is more important to ask a question, than be in a situation you are quite unprepared for. There is not a blueprint for this process as every single situation and purchase is different. Just take it slow and easy because making the ultimate leap into ownership in Mexico cannot be hurried. Throughout the process the most important thing is to be patient. Make sure that if something is not understood, the Real Estate Agent answers your questions, which should be many. Patience! Patience! Patience!
AFFORD TO BUY – YES OR NO
Manzanillo has something to offer everyone, regardless of the size of pocket book or the desired lifestyle. There are many lovely homes available in small pockets around golf courses and just off the beach which are generally at lower prices than those in the hills with panoramic vistas or on the beach with the proximity of the largest swimming pool available anywhere! There are some lovely homes tucked away in unexpected places which could suit you to a tee!
So the quick answer is – yes – it’s affordable.
Manzanillo has been not overbuilt like Puerto Vallarta or Los Cabos and prices asked are nowhere near those in these locations. Real estate prices in Manzanillo are at a vast array of levels and there is absolutely something for everyone. Ask your agent to show you around town or to suggest areas that you might like to visit on your own.
But always keep in mind that properties located on the beach, or with great views, or reasonable access to the beach, good location for ease of shopping, restaurants, bus routes etc, will be higher priced than those in other slightly less convenient locations. Above all, be flexible, surprises can quite literally be just around the corner.
Prices of properties are all over the spectrum with condos going for $95,000. USD for a one bedroom unit, to $335,000.USD for a fantastic 3 large bedrooms, 2 1/2 bath, 2700 plus sq. ft., 2nd floor condo, recently renovated with upgraded furniture and on the beach. There are properties in an exclusive, gated, secure community where the starting range of homes is $555,000, USD and more reasonably priced homes on a golf course for about $200,000 + USD. Lovely homes on with large gardens within a Mexican community* can be anywhere from $100,000 USD.
* We must say here that Mexican communities should not be discounted as they are generally good and safe with the inhabitants welcoming, neighborly & very helpful. Most people have good tales to tell.
foreigner buying property in Mexico at the given address where your offer has been accepted. Fidio Comiso’s are required on all property purchased by foreigners within the 50 km limit of the beach.
There are numerous other fees involved in closing, such as registering title at Land Titles, Municipal Hall, traveling to the Fiduciary Bank, sales taxes, photocopies, etc. and lastly, the Notario fees which are based by percentage on the value of the purchase. These fees will be in the neighborhood of $5,000 USD for property under the value of $100,000 or if your purchase is $250,000 (as an example) then approximately $12,500 USD would be the closing costs.
Also remember, as financing is now available in Mexico, should you decide to finance your purchase in whole or in part, there will be not only added time (minimum 30 to 45 days) for closing but additional costs will also incur.
If retirement is not immediate, why not consider buying a lot and building your dream home 3, 4 or more years down
the road. Taxes on bare land are not a major factor in Manzanillo. For example, in the development known as Peninsula de Juluapan (Las Lomas del Mar) lots with nice views can be purchased for as little as $35,000 USD. A number of lots (approx. 700m to 800m are available under the $50,000.00 USD. with property taxes being about $150/year. The taxes are figured on a table used by Catastro (a Government agency) and it depends on the value placed on the property.
There are many excellent architects available locally, who know the area and what is required by local laws for safety and security for both a building and its inhabitants. Many are bilingual but if not, there are people around who are glad to act as interpreter for a small fee. A builder usually charges $50.00 to $90.00 per sq. ft. depending on the finishes. Land has been a good investment in Manzanillo but prices, again, depend on location. Do realize that with the planned expansion of the Costa Alegre (Puerto Vallarta to Manzanillo) these can be much higher in the not too distant future.
CLOSING COST A CONSIDERATION
In Mexico, unlike in Canada or the USA, closing costs are a major expense. It is important to know that all real estate transactions must go through a NOTARIO PUBLICO (very similar to a magistrate). The Notario is required by law to do the applications and registrations for a BANK TRUST or Fideo Comiso. Firstly, there is the need to apply for a permit or First Permission. This will cost approximately $1100 USD payable immediately upon application. This is where the owner is registered as a foreigner buying property in Mexico at the given address where the offer has been accepted.
Fideo Comiso Article 27 of the Constitution of the Republic of Mexico prohibits foreign ownership of real property located within 30 miles (50km) of any coastline or 60 miles (100km) of either border. This is referred to as the “Prohibited Zone.
NB: It is absolutely not recommended that purchasers make a private contract with a Mexican friend listed as owner, as in case of disagreements, the property could be lost by the actual purchaser.
There are numerous other fees involved in closing, such as registering title at Land Titles, Municipal Hall, traveling to the Fiduciary Bank, sales taxes, photocopies, etc. and lastly, the Notario fees which are based by percentage on the value of the purchase. These fees will be in the neighborhood of $5,000 USD for property under the value of $100,000 or if your purchase is $250,000 (as an example) then approximately $12,500 USD would be the closing costs.
There are several mortgage lenders for financing in Mexico. Rates will vary with an average of 6.75% to 8% depending on credit score and amount of loan. Most will lend 75% of the purchase price. Be aware that should you decide to finance your purchase in whole or in part, it will be not only to add time for closing (minimum 30 to 45 days) but also additional costs.
Questions you may not know to ask and which the realtor must check on your behalf;
* Are Predials paid every year.
* Ensure there is no lien on the property and it is “Libre de gravamen”
* If the property is registered in “ Registro Publico de la Propiedad “ and can be proved thus with a FOLIO REAL number.
* Read the “Escrituras” before making a firm deal and ask to see the owner’s identification papers to ensure that it is in the correct name.
* Go to the “Municipio” and ask if the property is registered in the same name
* Be sure you buy land which actually exists: That means
the registration in
“CATASTRO” is in the same name and location and that the land is legally registered in “CATASTRO”
Should you decide to buy without a realtor it can be risky and all of the above must be checked prior to handing over any monies or trouble could ensue.
Beware of friendly persons or “quick new FRIENDS”.
Trust only a person you know and who will tell you the true facts.
In future articles we will examine the options of (1) renting your newly purchased property, (2) money that can be made by flipping and (3) do I have to live in a development?
Manzanillo Sun thanks the following agents for providing the information for this article:
In alphabetical order they are:
CandyKing, Owner Realtor for Coldwell Banker, Colimar candyk@coldwellbankermanzanillo.com (314) 334-2000 Toll free: 1-866-724-3313
Gail & Margarita Abbott, Owner Realtors, Abbott Realty sales@abbott-realestate.com (314) 334-7460
cell: 044-(314) 338-2431
Gerry Szakacs, Broker/Owner of Realty Executives Mexican Bay.: gerry@mexicanbay.com 011-52-(314) 335-1343
or cell: 044-(314)-120-2779
IVE Realty Services at Soriana Shopping Centre
http://www.ivecasas.com.mx Tel (314) 335-4333
Kristine Holzapfel of Manzanillo Real Estate, kristineholzapfel@yahoo.com cell: 044-(314)103-6474 or (314)334-1900
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Manzanillo Sun’s eMagazine written by local authors about living in Manzanillo and Mexico, since 2009
