Fighting Urban Legends – New Construction
I spent twenty five years as a police officer in Canada fighting crime and urban legends. What I mean by urban legends is a particular events that has occurred in the past that had been propelled by certain environmental and social events indirectly or directly related to the singular legend in question.
After these events the effects live on without any documented occurrences ever occurring again however this urban legend affects how we make decisions and live our lives.
Now as a real estate agent in Puerto Vallarta, Jalisco, Mexico I find myself fighting urban legends on a daily basis. One of these urban legends is that new construction purchases will mean that you will lose your investment or it will be stuck in legal limbo for years.
To understand how this legend started I will take you back to the 2007 American financial crisis which is also known as the global financial crisis. This period seen certain condominium projects stalling out or not finishing and yes there are investors to this day that have been separated from their investment or deeds to their property.
Since the global recovery and to the best of my knowledge all developments here in the Puerto Vallarta area have been completed and the buyers have had their property delivered.
Now the risk of buying a new construction will always be a risk as deposits and payments mostly go to the developer and that is why the developers will explain that you are compensated with a new construction price reduction.
This same risk is the same in Canada or the USA as payments also go to the developers on most new projects. Investors take advantage of this price reduction to flip their properties for a profit thus taking advantage of the price reduction. We have seen buyers here in Puerto Vallarta quickly flipping their purchase soon after completion and making a profit such as they do in Canada or the USA.
I suggest to anyone considering a new construction is to have your Realtor do their homework on who the developer is and what has he done in the past. You should also know the values of similar units in the immediate area. What were the payment plans in other projects.
I will not lie that new construction does pose a risk such as it does in Canada or the US but for some reason here Canadians and Americans paint all new construction as a huge risk. This is an urban legend.
As one of our RE/MAX logos states
“ DREAM WITH YOUR EYES OPEN “
so your realtor needs to do his homework on the developer and the market.
My real estate philosophy is
“I WOULD RATHER HAVE MY CLIENTS NOT BUY AFTER MAKING AN INFORMED DECISION RATHER THAN BUY AFTER NOT BEING PROPERLY INFORMED“.