The Puerto Vallarta real estate market is on fire, or en fuego, if you know a little Spanish. With homes sold in hours or bidding wars selling over the asking price, how can you get in on a good opportunity in your favorite area? The answer is a pre-sale condo. Below we’ll get into the benefits of buying pre-construction condos in Puerto Vallarta.
But first, let’s go over a few basics.
What is a Pre-Construction Condo?
Pre-construction condos, also called pre-sale condos, are when the developer sells the condos before the construction is completed. In some cases, before the ground has even been broken.
So, how can you buy a condo without seeing it?
There are a few options:
- The developers provide floor plans with detailed architectural drawings and artistic impressions, or renderings, so you can visualize the entire project, inside and out.
- Depending on what stage the project is in, you may be able to see a model home. Once the bones of the building are up, one of the first thing developers do is create a model condo on a lower floor to act as a sales center/showroom. In that case, you’ll be able to walk through the condo and look at the finishes (cabinets, countertops, and appliances).
- There could also be an off-site sales center that serves as a model unit. As in the example above, the model unit will be a finished unit for you to walk through.
Regardless of when you buy it, it won’t be move-in-ready for a while. At the very least, it could be months, but most likely, it could be a year or more.
Obviously, this is different than buying an already built condo or resale property. However, there are a number of great benefits to buying pre-construction condos in Puerto Vallarta and everywhere else, for that matter.
So, let’s do a walk-through and get into it…
Benefits of Buying Pre-Construction Condos in Vallarta:
Lock in Your Price
A massive benefit to buying a pre-construction condo is the price.
Once you sign on the dotted line, you’re locked in at a discounted price early in the game. The housing market may explode, but the agreed upon investment amount will remain the same.
That also means if housing prices increase between the time you sign and when the condo is finished, you could be moving into a windfall. For example, you may buy a $200,000 condo, but when you move into it, the market has increased, and it could be worth $275,000. A tidy sum just for being patient.
Better Prices and Pre-sale Discounts
When buying a pre-construction condo, there are often Very Important Buyer (VIB) price breaks and discounts. The developer wants to attract buyers as early as possible to help secure more funding. And the money they get from pre-sale investments goes directly to the developer and may help fund part (or most) of the project.
Furthermore, they need to show their lender progress and have more flexibility on price in the early stages of the project. If you buy the same condo the day after it is complete, the cost would be higher because it’s finished and move-in ready.
Additionally, the larger the down payment, the more significant the bottom-line price reduction. For example,
With 35% down, you may get a 12% discount.
50% down can yield a 15% reduction.
80% down may offer 18% off (or more).
All of this is subject to the developer’s contract, and every agreement is different. But if you don’t like the terms of the contract, you can offer a different payment term and request to modify them.
Location, Location, Location
When you buy a pre-construction condo, the prices are often substantially lower than a resale or pre-loved home. By saving money on the bottom line of your new home, you can afford a more sought-after area.
Not only do you have the option to invest in a higher-end location, but you’ll also have your choice of the best units. If you get involved in the early stages, you’ll be able to reserve your favorite condo. Want an ocean view so you can watch sunsets or whales from your living room? No problem. Hankering for a higher floor with a view of the infinity pool? Ok. Getting in at the ground floor level means more units to choose from.
You may find it challenging to a modest priced home in the hottest neighborhood in Puerto Vallarta, but if you get in early, it could be a game-changer. Finally, you just might be able to afford the hot spot you’ve always wanted.
Keep Calm: No Bidding Wars
Puerto Vallarta is a hot market, and multiple offers are becoming more and more common. However, one of the benefits of buying a pre-construction condo is that there are multiple units for sale at once, so the competition for a particular condo unit isn’t as stiff.
It’s unlikely that many people will come on the same day looking for the exact same unit you are. However, if you were going to a pre-construction open house or if the condo was a resale, there is only one unit to choose from, so a bidding war can ensue.
Your Condo is Brand-Spanking-New
Basically, your brand-new home comes with a warranty.
Since no one has lived in your condo, there are no prior use and abuse. Your fridge isn’t going to go caput from years of use the day after you get your keys. And if for some strange reason it does, there is a warranty for that.
Low Maintenance or Repair Costs
New buildings typically mean fewer things to repair inside your unit. There may be some punch-list items to attend to, but overall, you should be good to go.
Another benefit of buying pre-construction in Puerto Vallarta is that newer buildings tend to be more energy-efficient, meaning lower electric bills.
When you move into an older building, there’s the possibility of maintenance assessment on the horizon.
You can Customize your Condo
One of the biggest benefits of buying a pre-construction condo in Puerto Vallarta is the possibility of personalizing your home. If you purchase in the earliest stages, you may have the option to do some customization.
The developer usually has appliance packages and finishes to choose from when buying off a plan. So, there might be a couple of different package tiers with different prices.
The earlier you buy, the more you might be able to customize—even more than finishes and appliances.
Want to combine two units? Want dark granite countertops instead of light ones? Just ask. And if you want something more notable, like knocking out a wall, it’s possible to negotiate it.
Some developers will accommodate, others may not, but you have a chance. With a resale, you get what you see. You can customize it when you get the keys.
More Time to Save for Your Dream Condo
When buying a pre-construction condo, you must put down a percentage of the purchase price when signing the contract. Then the developer will outline specific milestones/timelines. Once they are achieved/reached, you’ll need to put down a little more. And so it goes, until delivery of the unit when you put down the balance.
For example, let’s say you put down 35% upfront. Then, down the road, you’ll pay another 18.34% when the foundation is complete. When the exterior up to the 4th floor is finished, you’ll deposit another 18.33%. And when the entire exterior structure is complete, another 18.33%. Then at closing, you’ll deposit the remaining 10%. That process could take a 12-24 months, and you’ll have that time to come up with those down payments.
Timing is Everything
Just imagine… you are 2 years from retirement. Your dream is to live your best life in Puerto Vallarta. However, if you purchase a pre-loved condo, it could sit empty for those two years. Unless you decide to rent it out, but you know the risks of renting. You know there will be wear and tear on your dream retirement home.
So why not go for a pre-construction condo? The project is two years out, you get a discounted price, and you can own in a better location than expected. It’s a win all around.
The Closing Round-Up
Now you know the benefits of buying a pre-construction condo in Puerto Vallarta. But as with any real estate purchase, there are also risks. Therefore, it’s essential to have a good team of professionals to support you, from realtors to real estate attorneys. Always do your due diligence so you can make an informed decision.
If you are considering buying real estate in Puerto Vallarta, contact Taniel at Taniel@timothyrealestategroup.com. Or take a peek at his current pre-construction condo projects, Edge and Valarte, and make your dreams of living in Mexico a reality.