Resale vs Presale in Mexico: Pros and Cons
As you search for property in Mexico you will undoubtedly come across some horror stories of people putting money upfront for presale properties (usually condos) that never get completed. This can cause financial and emotional stress as the buyer wonders if they will ever move into their property or even get all or some of their money returned.
There are pros and cons to buying resale or presale. Here we will quickly go over the most common reasons to buy either form of property to help you make an informed decision.
Presale properties: buying before it’s built.
These are condos, townhomes or houses you buy off the developer’s floor plan, often 1-3 years before completion.
Developers usually price presales lower than future market value to move inventory early. You’re basically buying at today’s price for tomorrow’s home. In hot markets, that gap can mean built-in equity by closing.
Many builders also let you pick finishes, flooring, cabinets, even layout tweaks during early phases. You get a brand-new home tailored to you, no one else’s wear and tear.
The downside to purchasing presale is obvious… you are buying something that does not yet even exist. You could be waiting years to move into your new home. Markets can shift, interest rates change, life plans change. But, most importantly, you are placing your trust in a builder when, quite often, you (the buyer) could live thousands of miles away from the jobsite.
When presales don’t meet targets or the real estate market turns sour, you may find that construction comes to a halt or – in extreme cases – gets abandoned altogether as investors simply cut their losses and turn away.
This can make getting a refund incredibly difficult. So, with presales, the saying “buyer beware” is in full effect.
Resale properties: buying what’s already built.
The obvious upside to buying resale is that you are purchasing something you can walk-through, touch and see with your own eyes.
You get to decide when you move in. You have the power to negotiate a price with the owner. Titles and paperwork are in place. And, (this can be incredibly important in Mexico) the previous owner has had the time to work out all the kinks from the original construction.
Resales are often in established neighborhoods; so, you know the schools, noise levels, neighbors, and which amenities are available nearby (e.g. grocery stores). Many resale homes sit in mature areas closer to downtown with bigger lots, older trees and unique architecture.
There is no right or wrong answer when it comes to presale vs resale. Your decision will likely come down to two factors:
1. Can you wait several years for the property to be completed?
2. Are you open to the risk of investing heavily into something that may simply exist as an artist rendering versus a concrete structure?
MBO’s advice: do your research, look at all options, take your time and be “buyer beware” — a Notario is there to help and a clear title in-hand is always key before moving forward with any buy or build.
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