8 Things to Know Before You Buy NEW CONSTRUCTION in MEXICO in 2024

Buying new construction in Mexico has become increasingly popular among both locals and expatriates, drawn by modern amenities, potential for customization, and often lower prices compared to similar properties in other countries. One of the primary advantages is the opportunity to purchase a condo that is built to modern standards, including up-to-date electrical, plumbing, and construction materials. This often means fewer repairs and maintenance issues in the initial years of ownership. Additionally, buyers have the chance to choose or customize certain aspects of their home, such as their ideal floor plans, and in some cases finishes as well, tailoring the property to their personal tastes and needs.

On the other hand, new construction in Mexico can come with its share of risks and challenges. Before you purchase, check out these things:

1)    Who is the developer? This is one of the most important aspects, as a significant concern is the reliability and reputation of the developer. It’s common and normal for delivery dates to be several months+ after the estimated date in the agreement, however there have also been some instances where projects are significantly delayed or even abandoned due to lack of finances, poor planning, lack of experience, etc, leaving buyers in a difficult position. Some questions you will want to ask include: Has the developer built many projects like this before? Do they have complaints or lawsuits? Are they honorable people? Do they have other future projects they will do in the same area? How is the quality control oversight? It’s best that a developer has someone on site every single day overseeing the construction.

2)    Who is representing your best interests? Expert tips for buying new construction in Mexico include due diligence and professional assistance. It's crucial to work with an excellent local experienced agent and lawyer to thoroughly research the developer's track record and to ensure that all legal aspects of the purchase are clear and above board, all paperwork is in order, and that everything promised is included in the purchase contract. Engaging a reputable real estate agent who is familiar with the local market and obtaining the comparable property sold and list prices, understanding typical discounts can provide invaluable insights and help navigate the purchasing process. It's always a great idea to hire an independent Mexico real estate attorney to review all contracts and documents to help ensure that you will be given clear title once you’ve paid for the condo in full.

3)    What are the pro’s and con’s of the area? New developments can be located in less established areas, which might lack the infrastructure and services found in more developed neighborhoods, like public transportation, shopping, and medical facilities. However, there can be some significant savings and appreciation potential buying in an ‘up and coming’ neighborhood. Visit the area during the day and night. Are there any noisy businesses nearby?

4)    How is the development funded? How much are they relying on sales? Do they have financing approval? Has the developer invested their own money? The less a developer relies on sales to fund the project, the better chance it has of being built on time (less reliant on the market).

5)    What is a fair price / can be negotiated? Are the discounts offered in line with the market and what else is available?  Are their financing options or extras that could be thrown in? Discuss with your agent.

6)    Know what you are signing. Ask for English courtesy translations (preferably side by side with the contract and addendums). Make sure everything promised is in the contract. Another critical tip is to understand the financial aspects, including payment schedules and what is included in the final price. Some developers may offer financing options or require payments in stages as construction progresses. It's essential to have a clear agreement on these terms and to know what happens in case of construction delays. Finally, buyers should consider the long-term value of the property, including potential appreciation and the future development of the area. By taking these steps, buyers can mitigate risks and make a more informed decision when purchasing new construction in Mexico.

7)    Know the purchase process and important dates. Usually you’d make an offer (one page simple form that includes who you are, what property you’d like, terms and price). Most developers ask for a small refundable deposit (eg: $5K USD) to be submitted with your offer. Once this is signed and accepted by the developer, they create the purchase contract and send to review. Make sure you include in the offer 10 days for due diligence review *from the date the developer sends the documents*. Payments are made over time, as agreed in the offer. Your agent should send progress photos periodically.

When is the development estimated to be finished? When does the developer plan on completing the condo regime and being able to deed the properties? In most cases, the condo is ready a year or 2+ before the deed is, this is an important aspect to discuss with your lawyer and real estate agent. Closing dates in Mexico are NOT set in stone, and can vary greatly so do check with your agent and lawyer prior to booking your flights, ordering furniture, etc.

8)    What is included and what is extra? Typically when buying a new condo you would need to add on costs for furniture, blinds, bedding, some appliances, closing costs, and in some cases, parking or storage units. Make sure you are clear what is included before you make an offer, so you can properly budget and also so you have the opportunity to try to get something else included with your offer. Make sure you get an estimate for closing costs (transfer taxes, registration fees, notary, real estate Trust, etc), as these can be higher in different areas of Mexico.

You may also like to read about the Purchase Process in Mexico, 12 Ways to Protect Yourself Buying New Condos in Mexico, and Typical Costs to Expect.

One example of developers that include protection aspects for buyers are Constructora Intelectual and their new 20 condo development Luxury Waves Bucerias.

Protections Offered for Luxury Waves Bucerias:

Layer 1: Developer Experience

Developers have built similar buildings such as Metropolitana, Torre 6, Concordia, Paseo Centro, Sonata, and Contralto in Zapopan and other areas. The pool contractor has built 15 other rooftop pools using special engineering and quality materials.

Layer 2: Legal Due Diligence

Your lawyer will review the contract and all paperwork to ensure everything is in order, and is a reasonable contract that include buyer protections, penalties, and more.

Layer 3: No deposit is asked until after you complete due diligence review period and sign a purchase contract.

Layer 4: Development is Already 100% Funded

The development is fully funded: 28% by the developers and investors, 55% secured through a bank loan, and 14% through sales. Over 15% 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 under construction, visit FB page https://www.facebook.com/profile.php?id=61556567169943 to view progress. 

They also include all appliances and have special investor pricing on now. For more info about Luxury Waves Bucerias condos, click here. 

We welcome questions! To learn more about this development (or any other) please click Let’s Talk and get in touch.