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6 Things You Must Know About Buying Pre-Construction

6 Must Know Things About Buying Pre-Construction

Puerto Vallarta and the Bay of Banderas have seen an incredible amount of growth over the last decade due to the incomparable weather, endless beaches and global entertainment scene. The area is currently seeing a slew of new developments coming on the market offering properties at every price point.

Buying pre-construction can be the perfect option for homebuyers as long as you keep the following 6 things in mind when weighing your options.

 

1.- Know your developer

Vallarta has countless developers creating buildings of all sizes.  It is important for you to ask your real estate expert about the developer and see what projects they have created in the area.  Additionally, it is imperative to as if the development has an agreement with the Office of the Federal Prosecutor for the Consumer – PROFECO for short.  Making sure that this agreement is in place is part of your due diligence when vetting potential pre-construction developments. Having a trusted and reputable developer is vital to delivering your condo in the timeline and condition that was sold.

 

2.- Understand the payment terms and applicable discounts

An advantage of buying pre-construction is most developers offer payment plans and discounts that are typically dependent on the delivery date of the property.  The general rule of thumb is that the larger the deposit the greater the discount.  For example, a deposit of 80% down with a 20% due upon delivery can yield up to 15% discount off of the list price.  The more typical payment plan of a 30% down payment, 60% over the course of construction, and 10% due upon delivery typically provides a 6-8% discount off the list price. As developments near completion, the discounts are smaller, if at all.

 

3.- Ask about additional incentives

Some developers offer additional incentives.  These can include inclusion of select appliances, upgrades on materials, or the ability to customize your condominium, allowing you to create the home of your dreams.  Don’t be afraid to ask your real estate expert to see if any apply to your potential home.

 

4.- Review delivery timelines and applicable penalties owed to buyers

When signing the initial contract, make sure to review the timelines for payments and delivery.  While most developers have a targeted delivery date, you should be prepared to experience some delays in final delivery.  Your contract should provide a specific grace period to accommodate for some delay, as well as, a date whereby the developer is obligated to provide you some financial compensation for the delay.  Make sure you understand these points in order to properly manage your expectations and know your rights.

 

5.- Contracting and Closing

Pre-construction also has a two-step process. You will sign an initial contract outlining the particulars of the condo you are purchasing, the payment terms and timelines, as well as any applicable discounts and/or inclusions.  You will not go through a final closing and receive your deed until completion of the development and the majority of units are sold.  This can often take some time as the developer is essentially turning over the building to the individual property owners for management and HOA creation.  It is worth noting that reselling the property is challenging until you receive the deed or Escritura. If you are looking for a quick flip, pre-construction may not be the way you want to go.

 

6 Must Know Things About Buying Pre-Construction

 

6.- Furnishing your new home

Most pre-construction developments do not come furnished.  You will want to allocate funds for purchasing furniture, kitchenwares, bedding, towels, etc.  Puerto Vallarta has many options for setting up your Mexico home at all price points.  You may choose to work with an interior designer who can source everything or visit local design districts to find unique, hand-crafted pieces.  Liverpool is a national department store with an extensive home section and offers delivery.  Bahia Partners offers a concierge service that can provide you with resources to make setting up your home easy.

 

Fully understanding the pre-construction buying process is important.  Your Bahia Partners real estate expert has extensive experience in this type of purchase. Feel free to reach out with further questions by emailing info@bahiapartnerspv.com or call +52 322 182 6140.

 

For a selection of exquisite pre-construction developments, click here!

 

 

 

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