Our purchase experience (Part 2)

Welcome to Part 2 of our purchase experience in Puerto Aventuras, MX! I left off last time at the contract review stage so will start from the next step, contract execution.

Sign/send contract: After a few rounds of back-and-forth to get the contract wording updated, this step was pretty straight forward. Print and sign 4 copies of the contract, initial every page (including attachments) and sign where provided. The ink was barely dry before we scurried off to DHL to get them shipped down to Mexico. As an aside we chose DHL over other international providers because we had been told by multiple sources they are the fastest and most reliable. A day and a half later the contract was delivered.

Additional deposit(s): This is the step where we wired a huge chunk of change (for us at least) to GMB. One aspect that was a little unnerving was that we were required to complete this step before we would receive a copy of the fully signed contract. This was one of two areas that are the opposite of how things work here in the states (the other will be discussed in next section). The lingering question was in both our minds, “What if we wire the money and never hear from them again?”. Happy to say this did not happen.

Although the order of business is contrary to how we do things in the states, it is how they do things down there. The logic is they won’t commit to entering into a contractual agreement without something significantly more than the initial deposit we had already made. We have since learned that while a broker vanishing off the face of the earth is possible and would be devastating, our partially executed contract combined with receipts of every transaction and copies of every correspondence could be used in Mexican court if it ever came to that. Speaking of, I cannot over-emphasize the importance of keeping copies of every receipt and every correspondence in a file. Do this religiously!

Final payment/take possession:  At the time of this writing these final two steps are still 21.5 months away, but who’s counting? I’m sure we’ll have more to say on the final stages but will provide a brief summary of our current understanding.

Another procedure that seems a little odd is down in Mexico you actually take possession of the property before you get the title. In short and as we understand it, when the place is finished we will inspect and then make the final payment. In return GMB will grant us permission to take possession of the unit (i.e. move in) and then we will apply for a title/deed. Here in the states you would receive a “clear title” before taking possession of property. Another area that seems to open the door to problems but have been told by multiple reliable sources, “That is just how it works down here. If you want to buy here you’ll need to accept their practices are different but it’ll work out in the end.” Things just work differently in Mexico.  Even if you can’t necessarily embrace it, being willing to accept it and going with the flow will reduce your anxiety – it has for us so far.

Title/deed: The final step in purchasing our place down in Mexico is to apply for title. We are still a long ways off from this step but there are many considerations for exactly how you want to title. Based on our research (thus far) for the location we have chosen, it boils down to titling via corporation or bank trust. There are pro’s and con’s to each and it also depends on how you intend to use the property (vacation rental vs residence, etc.). At this time we have leanings toward bank trust based on feedback from ex-pats and our intended use. Here are a couple resources that cover this topic but definitely research and plan for this based on your personal situation and goals.

http://qroo.us/2017/07/20/fideicomiso-or-mexican-corporation/

http://www.yucatancompass.com/what-you-should-know-article/1/trust-vs-corporation

https://www.topmexicorealestate.com/blog/2015/10/mex-corp-vs-banktrust/

https://mexlaw.ca/10-reasons-foreigners-consider-forming-mexican-corporation/

At this time we plan to book a 3-4 month trip down as soon as the unit is ready. We’ll stay in a local resort while we go shopping for essential furniture and then transition into the unit.  Can’t wait for that first night in our new place!

Thanks for reading!

Our purchase experience (Part 1)

There are many great resources out there about purchasing real-estate in Mexico but I thought it might be useful to talk about our personal experience as we navigate the process. Our case may be much different than most and this is not intended as advice! Hopefully it will be helpful but at the very least something for us to look back on. As a reminder, we decided to purchase pre-construction (i.e. before the ground is even cleared) and our place, “Blue House”, won’t be ready until Nov 2020 which is two years from now.

I’d like to start with a brief outline of the steps in our purchase process and then circle back and make comments on each. As of today we have completed the contract and have wire transferred a significant chunk of change down Mexico way! Please note there was much planning and research that happened well before these steps. I won’t go into that now but for us it took many years of scouring the web, speaking with ex-pats who live there and know the ropes, looking at places and many, “should we or shouldn’t we?” conversations over a glass (ehem or “two”) of wine that resulted in, “yes, lets go for it!!!”

Basic steps to our purchase:

  • Initial deposit/hold
  • Formal offer with payment terms
  • Receive/review contract
  • Sign/send contract
  • Additional deposit(s)
  • Final payment/take possession
  • Title/deed

Initial Deposit: After deciding on the property and while still in Mexico we were asked to put down $5,000US as a hold deposit. I must admit that even though we knew this is what we wanted, immediately after I handed my credit card over the reality hit me and it included equal doses of fear and excitement – we were really doing this!!! The initial deposit is similar to “earnest money” you’d put down on a purchase in the states to show you are serious. It was fully refundable if we had changed our minds. This also put a “hold” on the property until we either a.) changed our minds and got our money back, or, b.) fulfilled the agreed-to term(s).

Formal offer: As with most real-estate purchases the terms are all negotiable including purchase price and timing/amount of payments. We took a few days to figure out a budget that would work for us financially then sent our proposed plan to the broker. A few phone calls later we had an agreement in principal and this would become the basis of our contract. So, in our case the next step after the initial deposit was to negotiate a formal offer and payment terms. Our terms included a sizable advance payment in return for a significant discount on price.  Not everyone would have the stomach to agree to put significant money down so far in advance of a pre-construction project but we did the homework and felt comfortable.  Again, this is not advice.

Receive/review contract: As I mentioned in a previous post we are working with GMB, specifically “Karina” who has been truly great and although I’d like say more about her now I’ll stay focused on the topic, the contract! It took a few extra days for them to get us the draft contract due to Día de Muertos. This pushed us close to the agreed-to hold deadline not leaving much time for our review but we never got too worried about that. Without saying, we had made up our minds that if they pressured us or removed our hold because we needed a few extra days to review the contract, they’d lose our business simple as that. As you’ll see, due to our lack of preparedness the contract review took longer than expected.

We received the contract and it was written in both English and Spanish (left/right). That was nice but I immediately thought to myself, “if there’s ever a dispute I bet the Spanish version is all that really matters and our Spanish is, well, not great!” Hadn’t considered that before (duh!) but have since learned it is absolutely true. Fortunately, I had already researched Mexican law firms that specialized real-estate purchases for Americans. We decided on Mex-Law but there are many.

Due to the language barrier (still working on our Spanish!) it took a few days of back and forth with Mex-Law trying to explain that we only wanted a contract review and due diligence vs their standard closing service package (Luis our Realtor helped with this, thanks again!). The fee was around $1,000US and included a thorough contract review with over a dozen change requests to our favor, verification of title, liens and other items we would never had thought of. Our attorney worked with us and then on our behalf directly with GMB to facilitate changes. Hindsight being 20/20, we should have had a lawyer selected and ready for due diligence before we even put down the hold deposit. In our opinion this was money well spent and lesson learned! Our legal review pushed us well past the initial hold deadline but GMB had no issue working with our attorney and never pressured us about time, money or anything else – very easy to work with!

General summary of our contract:

  1. Large down payment in return for significant discount on price
  2. One additional small payment in three months
  3. Pay off remaining balance on delivery

Ok, that’s all I’ve got time for tonight. Will post “Part 2” soon. Thanks for reading!

 

Crime and safety in Mexico

Since we started going to Mexico regularly back in 2005, our friends and family constantly ask about safety and/or say we’re just crazy for going down there. Telling us stories of people who went on vacation and woke up in bathtub full of ice missing a kidney or highlighting articles about recent violent crime. I know they mean well and love them for it. That said, there is a bit of a double standard. I say that with a grin and in the most respectful way (you know who you are 😀🤐). For example one close friend thinks nothing of regularly visiting St. Louis, MO which consistently ranks as having one of the highest crime rates in the US. And, every single one of my friends and family who have expressed concerns over our going to Mexico either live in or regularly visit cities ranked highest on “most dangerous cities in America” lists (Google it). I mean?!?! I’d feel silly warning them about safety risks or sending links on recent crime much less advising they should avoid the entire city altogether. Bad things can happen anywhere but they know areas/times to avoid and how to minimize risk. In my experience it’s the same down Mexico way.

Having been violently mugged back in the early 90’s in New Orleans, personal safety and especially that of my family is something I take very seriously. But lets admit there is at least some added risk in most activities. I refuse to let fear dictate my actions, unless we’re talking about heights, that’s just stupid. I love St. Louis, Chicago, Anchorage, Houston and the list of “extremely dangerous” US destinations I visit or have lived in goes on. They’re great places! When there, you likely have some sort of a travel plan and avoid certain areas, maintain a sense of awareness and conduct yourself in a way that minimizes (but does not eliminate) the chances of becoming a target. Again, in my experience it’s the same down Mexico way.

I guess it all boils down to perspective. My perspective is that the world is full of both awesomeness and a potential for danger no matter where you go. To experience the awesomeness anywhere inevitably comes with certain risks whether that be a night on the town, day at the park, beach, fishing, hiking or whatever. The point here is that while I respect Mexico may not be for everyone, it bothers me when people so easily write off an entire country based on a few anecdotal headlines when similar headlines in local papers are brushed aside.

You may have heard a recent story about a young man killed in Playa Del Carmen. Our hearts ache for him and his family. Regardless of the circumstances that led up to this crime it was terrible, should never happen anywhere and I pray justice is served.

In closing, while the thought of running into trouble outside the US definitely gives me pause, the fact is that the vast majority of Mexico is as safe or safer than destinations here in the states. Experiencing the beauty of the land, sea and people there is special just as is visiting our favorite locations here.  We plan to enjoy them all as often as we can and will always do our best to stay informed and avoid trouble wherever we find ourselves.

Salud!

For more information on crime and safety in Mexico I would recommend these posts from the Two Expats blog (a great source of info):

‘Do Not Travel’ Warning for 5 Mexican States

Mexico: How to Find Crime Statistics for a Particular City or State

GreeneShire goes to Mexico!

Well after 10+ years of talking about it, on our most recent trip to Mexico, Tracy and I put in an offer for a pre-construction condo in Puerto Aventuras and it was accepted!

We have been coming to the Mexican Caribbean pretty regularly since 2005 and (like many) fell in love with Isla Mujeres after our first visit there. Ours was in 2007. We went back as often as we could and still love it. While we initially considered purchasing on the Island, there were a few things that weren’t ideal for us there including the recent spike in prices and inconvenience of being on an Island. Not knocking the place, still love it and will go back as often as we can.

Why we chose Puerto Aventuras

I want to preface this by saying that there are a number of places on the Mexican Caribbean that are beautiful and where we feel safe. There are probably folks with better qualifications than us who will disagree with our thought process and/or opinions and that’s OK. We mean no offense and are just sharing our perspective and what caused us to be willing to take the plunge.

We knew we wanted to be on the mainland but not in a big city and to check as many of these boxes as possible:

  • safety/security
  • close to beach
  • water view
  • new construction or pre-construction
  • existing infrastructure close-by including restaurants and grocery store
  • proximity to airport
  • proximity to destinations like Tulum, Cozumel, PDC and all the X’s (xplore, xel-ha, etc)
  • limited potential for growth
  • reasonable expectation for property appreciation
  • access to semi-private green space & blue space

Puerto Aventuras checked all the boxes for us. The entire community is gated off with additional security for most of the residential spaces. When we visited there we felt very much like we do when on Isla Mujeres in that everything you need is either within walking or golf cart distance, no car needed. There was an added sense of security in that there are some limitations on who comes and goes. An Island community feel but with the convenience of being on the mainland.

As for the specifics, I want to preface this by advising we don’t and won’t name-drop often.  This blog is not intended to provide advertising but there are cases where people may want to know the exact who, what and where.  During our research we certainly did!  Anyone thinking of doing something like this should do their own homework and proceed at your own risk! As with any purchase within the US or outside there is much to consider and certain risks, especially with a pre-construction project.

Ok, that said we decided that the upcoming “Blue House” condominium project was absolutely perfect for us. Timing-wise it won’t be done for two years (Nov 2020) which is a long time for some but lines up perfectly with our commitments here in the states. This property checks every single box we had listed and was right on budget. Besides being a well designed property in a well planned community it has direct access to the canal and is a short walk to a semi-private lagoon for snorkeling and quick cart ride to the beach. There are many other perks you can research for yourself.

Our Realtor is the soon to be superstar of HGTV “Luis” (ok, may be exaggerating a bit but he will be featured on House Hunters Intl in Dec 2018).  Had to give a shout out to Luis as he has been great to work with.  Among many things and without hesitation after showing us properties the day before he spent another half a day with Tracy and I, on foot, exploring trails and area around the Blue House property.  This included checking out the roads and other new developments, going with us on hiking trails to hidden cenotes, we found a not very well known Mayan ruin and a semi-private lagoon.  We’ve worked with many realtors in our time but never someone this enthusiastic and truly caring about our purchase.  That day was one we’ll not forget.

So that’s it for now. We’re still very early in the process but plan to post updates as things unfold. Wish us luck!