By Harriet Murray ● Cochran Real Estate ● July 2015
I probably don’t need to tell you to do research and ask questions of your real estate agent before you make an offer. Try to get the following information:
- Research Recently Sold, Comparable Properties
A comparable property is one that is similar in size, condition, neighborhood and amenities. One 1,200-square-foot, recently remodeled, one-story condo should be listed at roughly the same price as a similar 1,200-square-foot condo in the same neighborhood. That said, you can also gain valuable information by looking at how the property you’re interested in compares in price to different properties. Is it considerably less expensive than larger or nicer properties? Is it more expensive than smaller or less attractive properties? Your real estate agent is the best source of accurate, up-to-date information on comparable properties (also known as “comps”). You can also ask about comps that are currently in escrow which are pending sale.
- Check Out Comparable Properties That Are Currently on the Market
View other condos and get a true sense of how their size, condition and amenities compare to the property you’re considering buying. Then you can compare prices and see what seems fair. Reasonable sellers should know that they must price their properties similarly to market comparables if they want to be competitive.
- Look at Comparables That Were on the Market Recently but Didn’t Sell
If the condo you’re considering buying is priced similarly to ones that were taken off the market because they didn’t sell, the property you’re considering may be overpriced.
Also, if there are a lot of similar properties on the market, prices should be lower, especially if those properties are vacant. Check out the unsold inventory index (absorption in months) for information about current supply and demand in the housing market. This index attempts to measure how long it will take for all the properties currently on the market to be sold given the rate at which they are currently selling.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review.