12 Ways to Protect Yourself Buying New Condos in Mexico

Shopping for new condos in Mexico is an exciting experience. The benefits are you get a brand-new place with a one-year warranty from the developer, you often receive significant discounts during the construction phase, and select your preferred floor plan from various options. You may even get the opportunity for some customization. However, as this is a significant investment—whether it's for a vacation home, winter home, or permanent residence—so it's crucial to ensure you're protected. Do not assume things are the same in Mexico as they are in other countries, ask all your important questions and make sure you understand everything moving forward. 

Here are 12 ways to safeguard yourself when buying a new condo in Mexico:

1. Review the Developer’s CV and Experience: Investigate if they have built similar properties before. Identify the contractor and the architect involved.

2. Check the Developer’s Reputation: have they built in the area previously? Research past clients' experiences and check for any lawsuits or complaints.

3. Hire an Independent Mexican Lawyer: Ensure the lawyer is experienced in real estate law and is independent of the developer (doesn’t work for them, they should work for you). They should check for any lawsuits, investigations, complaints, review all due diligence documents and contracts, and provide advice. This costs usually around $2K USD, and is well worth it. 

4. Work with a Certified AMPI Agent: Choose an agent you’re comfortable with to represent your interests. They can provide comparable property sales and educate you on the local market to verify if the price is reasonable. They may also have valuable experience / insight with which developers are OK to work with and which are not. 

5. Have a Finishings List Addendum: What materials are the floors? Countertops? Cabinetry? What appliances / equipment is included? Make sure this is part of the contract.

6. Get a Floor Plan Addendum: This should also be included in the contract.

7. Ensure Anything Promised to you is in the Contract: anything promised should be clearly indicated in the contract or addendums.

8. Understand Your Contract: Contracts in Mexico are in Spanish; request an English courtesy copy side by side with the original. Have your lawyer verify the accuracy of the translation and point out anything that is of concern. It should include delivery dates, and penalties if the contract is not adhered to. 

9. Avoid Paying a Large Upfront Amount: paying 90%-100% upfront and waiting two years for completion is the highest risk. Opt for a lower-risk payment plan, such as 30%-40% down, with payments tied to construction progress, and at least a 10% holdback for closing/possession.

10. Check for Developer Trusts: Some developers have a trust managing all funds, ensuring that your money is used for construction rather than other purposes.

11. Evaluate Construction Stage: As construction progresses, the risks decrease. Before they break ground is the highest risk. Understand when the building is expected to be completed, when the condo regime is expected to be completed (as this can take a lot of time and must be done before they can issue your deed). 

12. Use of Escrow: If the developer agrees to use escrow, it’s an added layer of security (you send funds to escrow, and sign to release them to the developer). There is a one time fee of usually $750 - $800 USD paid by the Buyer. Secure Title Latin America is a great option with strong compliance and an excellent track record. Your Buyers Agent or lawyer can assist you with this. 

Note: Delays are common with new condos; 3-6 months+ is typical so keep this in mind. While some developers have significant delays or fail to complete projects, many others operate reasonably. One example is Grupo JIMAV’s new development MARSALA BUCERIAS, boutique building of 15 condos located by the Bucerias beach, in Riviera Nayarit.

Protections Offered for MARSALA BUCERIAS 

Layer 1: Developer Experience

Developers have a solid track record, having built many similar buildings, including Sabbia Bucerias down the same street (2020). They delivered during the pandemic, just a few months delayed. They care about delivering a quality product, and have other future developments planned in the area.

Layer 2: Legal Due Diligence

Your lawyer will review the contract and all paperwork to ensure everything is in order.

Layer 3: Development Trust

This property has a development trust overseeing all construction funds.

Layer 4: Security of Development Already 100% Funded

The development is fully funded: 70% by the developers and investors, and 30% through sales. Over 40% of the development is already sold.

 Layer 5: Escrow Option

You can opt to place 100% of your purchase amount into escrow with a third-party company. Funds are released in chunks with your signature for each progress draw.

Layer 6: Construction Progress

The development is nearly complete: the structure is done, model units are finished, the elevator is installed, the pool concrete is poured, electrical wiring is in place, and interior finishings are underway level by level. Estimated delivery dates are scheduled October-December 2024.

This is one example of a development that meets the protection criteria mentioned above. For more info about Marsala Bucerias click here. 

We welcome questions! To learn more about this development (or any other) please click Contact Us and get in touch.