The Difference of Buying a Re-Sale Condo versus a Pre-construction Mexico Condo?

There are many advantages to buying a preconstruction Mexico condo for sale. It is always advisable however to compare re-sale versus a preconstruction purchase to evaluate your personal needs and your personal financial goals. Normally a pre-construction project will allow you the opportunity to acquire a property at lower than market value. The following paragraphs list a few factors which you can use as an exercise in order to help you decide if buying a pre-construction condo is right for you.

Reputation of the Developer

In any market situation, check that the Mexico real estate developer has a solid reputation and/or is backed by a realistic marketing plan and other reputable companies. Always investigate the following questions:

What other projects has the developer constructed?
What is the developer’s experience?
Have they had issues in the past? Or currently?
If so, what guarantee is there that they are improving?

Check the internet and most importantly, talk to your agent.

Payment Schedule

In a purchase of a pre-construction property you will need to analyze the amount of risk you wish to assume. Many people might quickly respond that the only properties to purchase in a down economy are re-sales. But investors and realtors who are involved in weekly and monthly real estate transactions understand that you can manage many risks by managing a strict payment schedule. Some questions to ask the developer of a pre-construction Mexico condo project;

a) Will the seller allow payments to go into escrow?

b) Will payments be based on construction milestones?

c) How much money is requested at the beginning of the construction period and how much at the back end?

Financing

Many preconstruction condo projects offer payment plans running the course of the construction process, which virtually translates into interest-free short-term financing. This can be beneficial to people who don’t have access to the entire dollar amount and need time to raise funds. Some mega developers also offer long term financing plans (from the developer itself) once the physical delivery has been realized.

For bank financing, and if you are a non-Mexican, preconstruction properties might have some limitations versus a resale. A bank cannot offer their services unless a property title exists which does not create any problems for a resale (except for some rare exceptions). On a preconstruction property though, as the property is in process to be constructed, many developers will not usually obtain an individual title until 90-95% completion of the project. On a better note though, in the past several years there has been an increase in the amount of developers opting to obtain their Quintana Roo Condominium Regime at an earlier date during construction. Properties therefore might be 40% or 50% into construction when the Regime has been granted.

Evaluate your financing needs, and talk to your agent to see what kind of preconstruction financing is available, so you can decide if you can buy preconstruction or should focus on resale.

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. In the summer of 2009, he received the first federally appliedMexico Real Estate Degree and Mexico Professional Real Estate LicenseS.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web sitewww.TOPmexicorealestate.com NETWORK

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