Top 10 Tips for Buyers at Lake Chapala
Even newcomers who have bought many homes in other parts of the world eventually realize that purchasing real estate in Mexico is a whole new ballgame.
Almost all local real estate deals here are for cash payment, with the full amount paid by wire transfer on the day of closing. There are precious few opportunities for financing of any kind for retirees buying existing homes, especially in this inland of Mexico where we purchase the home and the land is is built upon.
Dealing in a cash market puts a new spin on the whole process.
Here are ten points for you to consider before you buy a Lakeside home.
1. Don't rush. Spend enough time at Lake Chapala (six months or more) to know the neighborhoods and developments, learn how much monthly fees are in different areas and other pertinent facts. Come and rent while you get to know the area and really decide which area is right for you.
2. Get the inventory before you make an offer. Purchasing customs, rules and traditions are different here than they are north of the border. The light fixtures, telephone line, gas storage tank, and water heater may not be included in the sales price.
3. Do your homework. Learn how real estate sales are done here. Don't be taken in by folks who say, "That's the way we do it in Mexico."
4. Trust your instincts. If you get "feelings" in the pit of your stomach, listen to them. Take a break from looking at houses, come back with a fresh head and lots of common sense. Don't be afraid to look "silly" to your agent, it is your money and your life; if it doesn’t feel right, walk away.
5. Ask questions. Don't make assumptions (even “obvious” ones) and don't be afraid to ask lots and lots of questions. Keep a list of questions for your agent as they come up. A good agent will welcome your questions and wants to calm your concerns.
6. Know and understand all the problems. Agents and owners are not bound by disclosure laws. They are not required to reveal anything they know about the house or the neighborhood. You need to find out all you can about the problems in a property, development or neighborhood. Insist on an inspection by an independent inspector. Don't have a potential contractor do the inspection. If he thinks he has a big job coming he has a vested interest in you purchasing this property.
7. Check it out yourself. Go back without your agent to talk to the people living in the neighborhood or development. Ask neighbors who have lived there a while about noise, water problems, sewer problems, and fault lines. What have they heard about the house you like? Would they buy on this street again? Check out the developer's earlier projects. Were all homes sold quickly? What are the problems? What wasn’t finished? How much did the monthly fees go up when the developer signed off?
8. Watch out for drama and promises. In this now much slower market some agents and brokers are anxious to make a sale. The house you love will probably not sell tonight or anytime soon. AND it probably will not double in value in the next few months or even years. Be extra cautious of any agent who uses these tactics to get your signature on the dotted line. Remember that old saying, "If the deal is too good to be true, it probably is."
9. Location, Location, Location. Nearly every buyer here says they are buying the last house of their lives. (I did too, three times, and I’m not living in any of them!) Many other buyers also resell their new homes in a few years. Some want to build, some buy bigger or smaller houses, some leave the area, and some rent. In this market, it can take months or years to sell your home, especially if you spent too much for it. Always buy a house with resale in mind; be sure to have adequate parking, minimal stairs, a good location and widely desirable floor plan and amenities and the possibility of at least partial handicap access.
10. Don't leave your brains at the border. If a property doesn't have a clear deed or adequate water supply at the time of your offer, don't buy it. All homes here are sold “As Is” with no recourse. Do not continue with a purchase with any questionable conditions or problems. When you purchase a property without a deed or water, you own a property with little value and a lot of worry, stress, and continuing legal and logistical problems. That’s NOT what you want or need at this time of your life, especially in another language and country.
Remember that when you pay cash for a house at closing, you aren't building equity or creating a tax advantage. You are taking a big chunk from your retirement portfolio and you are probably making the largest cash purchase of your lifetime. Take your time. Rent first until you know the lay of the land here at Lake Chapala.
You’ll find more information about purchasing real estate and about renting here at Lakeside in the archived issues of the Mexico Insights online magazine Living at Lake Chapala and at the weekly Living at Lake Chapala seminars held every Thursday at 10 a.m. in the bar of La Nueva Posada in Ajijic.