Buying Real Estate Preconstruction In Puerto Vallarta

When purchasing real estate in a presale development, most developers will offer a few different payment plans, usually with a down payment, a payment schedule during the construction phase, and a balance upon delivery. The payment plans usually offer discounts – the more money you put up front, the bigger the discount. Depending on the construction schedule for the particular development, it could be that you have up to 3 years to make the payments – but with virtually all developer payment plans, from the time you sign a sales contract until the delivery of the property, you will need to have paid the property in full – meaning you will need to have the full purchase price usually within a 1-3 year period time-frame.

Traditional mortgages are not available for preconstruction because the property cannot be a collateral until the property is constructed and ready to be deeded. However, you might have the possibility to obtain equity on the property by deeding the property with a mortgage once the property is completed.

It goes without saying that you have to do your due diligence when choosing a property and the developer. Usually, the funds you pay for the property are transferred directly to the developer; they are not held in Escrow or by a third party. As such, you want to make sure the developer is reputable and has a solid track record. Similarly, you want to be sure that they have done similar projects and that preconstruction buyers in those properties were satisfied.

When purchasing preconstruction, it is recommended to have patience. The developer will have a delivery date, and usually a grace period beyond. But often, things can fall out of the developer´s control, such as the supply chain, or change in administration and delivery of permits.

One of the exciting aspects of a preconstruction property is that you get to choose the specific unit, depending on how early in the project you purchase. Often with a resale, you do not have this flexibility. There can be some (usually limited) personalization to the unit as well. There is an excitement of seeing the building being built, everything being new, and partake as the new building takes shape.

With preconstruction, of course, comes the concept of increased equity. Usually, preconstruction properties will have a list price – which is the estimated property value at the time of completion, and there will be discounts depending on the payment plan you choose and how early into construction you purchase. If you purchased early enough, the discounts will be eliminated as the construction phases are met, making the units similar to yours that are still available more expensive then the one you purchased, which logic states increases your property value as well.

With a resale there is no ¨leap of faith¨ – you get to see the property exactly as it is the day it will be yours, and your funds during the process are held in Escrow and are only transferred to the seller once the deed has been signed. For many, this is a much more comfortable process, especially when making a first purchase in another country. Also, most properties in Puerto Vallarta are sold furnished, so the cost of furniture (and the act of furniture shopping) would need to be considered when purchasing preconstruction.

For all these reasons, it is very important to work with a real estate agent when purchasing a preconstruction property. If you purchase with a sales agent that represents the developer, it could be that you do not get the full picture – comparison of similar projects, feedback about developer´s track record, market analysis, etc. It is recommended to work with an independent agent to ensure critical analysis of the various developments of interest.


This article written by Joshua Rappaport from RE/MAX Romantica and do not necessarily represent views, opinions or facts of GAYPV Magazine and should only be used for general information purposes only. Reach out to Joshua today and he can help you begin the path to property ownership in Puerto Vallarta.



  • GayPV Magazine 35th Edition – May 2023

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