Buying a new house is a very important real estate goal for the future of families, so these recommendations will help investors avoid distractions that affect compliance.
For many, the New Year’s resolutions are goals whose realization is difficult over the months. On some occasions this is due to the fact that, when considering these objectives, the interested parties do not have a clear action plan to rely on to avoid falling into financial institutions that divert them from their initial purpose. (Read also How to Buy a House Without Money?)
It is common that, when interested to buy a house, investors are wondering how to fulfill the New Year’s resolutions when the economy and the real estate market are in uncertainty after adjusting housing prices.
1. Pre-Purechase Considerations
Before carrying out the purchase and sale operation, it is important to take into account some factors that will determine the purchase of the desired property, since when engaging in a loan of 10, 15 or 20 years, it is necessary to generate a commitment, not only with the seller / owner and / or the financial institution, but also with your own pocket. (Read also How to Prepare to Buy a House)
The salary is the first thing you should pay attention to, because it depends on you that you can acquire the property. Of the total of your net monthly income (already after corresponding deductions) it is desirable to program that 30% of it be destined to the payment of the mortgage. We suggest you not exceed that percentage to avoid bleeding your personal finances and also divide the money. This way it will give you the opportunity to be flexible with the additional expenses that arise along the way.
a. Salary Considerations
The down payment is the amount you will have to pay in advance it varies depending on the type of mortgage you get or if the property is to be paid in cash. Anyway, it is not bad that you start thinking about this percentage.
The hitch also means the first step of the whole process, and it is also seen, in most cases, as the guarantee to inhabit the property.
b. Credit history
To get a loan, it is prudent to have a clean and debt-free credit history. This will set the standard to define the percentage of credit that the financial institution will grant. Therefore, we recommend you check the credit bureau (free service), which gives visibility of the status of your history in this area, to find out if it is appropriate to settle the moratorium balances, as well as improve your background.
c. Extra payments to consider
There are some payments you should keep in mind before taking the big step. Therefore, we suggest that of the 70% that you have left over from your salary, you set aside from 10 to 20 percent for additional such as the property, notarial procedures and some structural or superficial improvement that you wish to make in the selected space.
The property tax is a tariff that is applied on any property or real estate possession, that is to say to the houses, departments, offices, etc. It must be paid by all taxpayers who own one or more of these assets.
It must be paid annually; Usually at the beginning of the year.
The Property Acquisition Tax changes its name depending on the state, so the rate that the taxpayer has to pay depends on the place and value of the property; It is paid at the time of writing and the person in charge is the one who acquires the property.
In summary, we can say that the notarial procedures include the deed (among which are the taxes of the sale of the property), the rights derived from the operation performed and the notary fees, which are paid 100% by the person who buys.
2. Search Parameter
With the aforementioned criteria placed on the table: with the amount you will allocate from your salary to buy a house or apartment, as well as the additional expenses also mentioned and with a credit history without penalty, it is time to take the next step, which It is usually the most exciting.
But let’s define each one with its advantages and disadvantages:
The figure of the pre-sale of house has the advantage that the buyer acquires a previous property or during the construction process and while paying it at a given initial price, he prepares to inhabit it at the time the developer delivers the keys. This means that the price is taken as an opportunity, but we must not forget that it has a pair of Achilles heels: guarantee delivery times and not be able to live immediately.
Buying a new house has the quality that nobody has touched it more than its builders. This brings benefits from the perspective that they generally do not present damage, but the drawback is that many of these do not come fully equipped with all its components: kitchen, closets, floors, among others. That is why we suggest you consider each aspect in your decision.
This type of housing describes itself. It has the advantage that it is easier to negotiate the price taking into account the state of the house. The damages such as cracks, paint, locks or the last waterproofing are a good reference to counteract the conditions of the sale, as they are additional expenses that you will have to do to live in an optimal space.
Location, access, means of transport and security.
Once you decide if you want to buy a house or apartment, new or not, the first thing you should do is define the perimeter in which you want to live.
-What are the closest colonies to my job?
-My budget matches the price offered in these colonies?
-What are the main access roads and how is the traffic at peak hours?
– Are there Metro lines, Metrobús, taxi sites, nearby bus stops?
-What are the safety indexes of the surroundings?
Technology is a possible ally, because you can consult the information described above through the internet and geolocation applications as specialized portals.
Distribution and dimensions:
It is not the same to be a single entrepreneur than a parent with three children; For each one there is a space with ideal dimensions according to their lifestyle and what they can afford.
Number of rooms, bathrooms and parking
Take pencil and paper to record the requirements of the property on your wish list. Start by assessing how many square meters are the minimum that you and your family need to live, also ask yourself how many rooms, bathrooms and parking lots are those that fit your current living situation. Something that works for you right now.
Amenities: lounge, garden
Although the amenities are additional at home, they are motivating healthy living. Maybe you are interested in a garden or a patio to invite family and friends to a barbecue on the weekend or if you have a pet, what better way to make a home that has a garden, no matter if it is private or community, you always enjoy it.
Some new developments have a party room, gym, pool and sometimes, for a higher segment, to laundry and restaurant.
Recover the rest of the amount granted in the credit. For example, if 40% of the mortgage has already been settled, the bank sells the rights for 60% to an individual or intermediary who subsequently markets the tangible asset.
Mortgage auction: definition, advantages and disadvantages. Risks and advantages at the investment level.
A mortgage auction is the process of putting the property of a landlord in public auction that could not pay the amount to a financial institution.
This scheme arises mainly from reselling the unpaid portion of the credit granted to the one who failed to settle the debt, that is, when the first creditor of the property is dispossessed for non-payment, the financial institution sells the rights of a mortgage to a third party
If the creditor has already paid a part, the only thing the bank requires is to recover the rest of the amount granted in the credit. For example, if 40% of the mortgage has already been settled, the bank sells the rights for 60% to an individual or intermediary who subsequently markets the tangible asset.
3. Resource For The Search
Not long ago the search for properties was a weekend topic, where you took the family for a car ride and wrote down the phones that are displayed outside the properties and then dial and contact the owner or real estate agent .
Although this practice is still carried out, there are others that have not ceased to be popular among Mexicans, we refer to newspaper classified ads, which briefly describe a list of properties by area of the city.
However, the medium has evolved in an important way and with the Internet things have become much easier and friendlier, by concentrating a vast offer of portals and real estate apps such as Lamudi.com.mx that, with the desire to provide well-being to the people, display countless properties for sale for all budgets, needs and lifestyles.
Use real estate portals and apps
Using real estate portals optimizes the time of those interested, providing greater visibility of properties (in terms of volume) in less time.
At the time you enter the portal, review the description, where the dimensions of the properties for sale, distribution (rooms, bathrooms, living room, garden, etc.), facilities, services and amenities are presented.
Pay attention to the photographs of the house or apartment, these have to be of good quality giving a real panorama of what you will find when you visit it for the first time. During the visit, check that it looks as it is.
Direct contact with the owner
The owner does not always have the experience that an agent or real estate sales advisor has, that is why it will be you who asks the questions and tries to be very incisive taking into consideration the points that we already address in this Property Purchase Guide.
Something you should know is that, having direct contact with the owner, you (he / she and you) will be responsible for the entire process, nobody will provide additional services to visit the notary or carry out the corresponding procedures.
Deal with a real estate agent / broker.
This type of treatment separates the role of the owner, who assigns the responsibility of the sale of property to a real estate agent, broker or intermediary, who in turn earns a commission after closing the deal with the buyer.
This usually has preparation in the real estate business and will take you by the hand throughout the process to be your guide, whether you work independently (have your own brand of real estate agency) or, be part of some agency real estate already recognized in Mexico. Among those that stand out for their professionalism, level of follow-up and attention are: Century 21, Keller Williams, Coldwell Banker, Realty World, Remax, Grupo Vía Real Estate, Alfa Inmobiliaria, Quality, Cataño Real Estate, Bandin, among others.
Deal with the real estate development sales team.
When it comes to a new property, it is possible that the real estate project of your interest has a “ showroom ” or sales booth with a person who serves you. This person, whom we will call a sales consultant, as well as the real estate agent is the one who will continue throughout the process, from the first visit, teach the documentation, and in many cases, follow up on the credit issue.
4. Visit the propertise
Review of the state of the property.
Every time you visit a real estate option, we suggest you do the following exercises:
Open and close keys, closets, doors, etc. make sure that all work without problem.
Check that the gas, electricity and water installations are in good condition, without leaks, that all the switches are turned on, that the water comes out of the tap and that the toilet lever is used correctly.
Take a look at the surrounding streets and the colony on foot, make sure it is the place where you want to live, observe the state of the asphalt; If you have the opportunity, talk with a neighbor to give you their opinion, maybe you know the owner of the property you are visiting.
Locate the nearest police stations, firefighters, medical centers. This will help you have more peace of mind in the long run.
Documentation review up to date and without debit
I. Property and services: Ask the owner, agent or real estate advisor to show you the current payment of the property tax and all services such as electricity, water, maintenance (in case of living in a complex or condominium).
II. Request the Structural Safety Opinion, which guarantees that the property is in optimal conditions to be inhabited. If you do not have it, you can ask a Director Responsible for Work (DRO) or Head of Structural Safety (CSE) to do a study. It also requests the plans and the deed to confirm that the property is in the name of the owner and there is no impediment to the operation. Many of the current developments have sustainability certificates, to show that they are friendly to the environment; It would be pertinent for you to ask for them.
III. How to avoid real estate fraud?
1. Never commit to deposit or transfer money to someone you have not met in person.
2. Always try to verify the identity of the person you are dealing with and confirm that it is really a real estate agent or the owner.
3. Search for properties in reliable real estate agencies or trusted websites, such as Lamudi Mexico.
4. Always insist on inspecting the property for yourself. If the owner or agent says it is not possible to do so for one reason or another, or is not available, discard the agreement.
5. Decision making prior to buy of house
Do not close, we advise you to make more than one visit so you can compare and go for the best option for your pocket and lifestyle. Comparing will always be a good opportunity to analyze the pros and cons of each of the spaces that interest you.
Price comparison of the selected colony
One of the easiest ways to compare prices of the selected colony is to use real estate portals, where you can examine more than 10 properties with similar characteristics and with that, make the final decision. Doing this will save you a lot of time and provide you with a wider visibility of the behavior of market prices.
You can also take the phone and call numbers of other properties, even if they are not of your interest to know in a loud voice the prices that are being offered in the area of interest.
It is also important to make an analysis of the strengths and weaknesses of all previously visited properties; Here you are less steps away from making your dream come true.
Strengths and weaknesses of each property.
The things that make your search more coherent are the ones that become your strengths; Everything you liked, from the property to the seller’s treatment.
Everything that makes you noise, that does not match your search parameters, that detracts from your evaluation. Consider choosing the one with the greatest amount of strengths over weaknesses; If you reach a draw, do the analysis again taking into account aspects that you had not previously addressed.
6. Financing Options
After choosing the property for sale that suits all your criteria or parameters, proceed to go to any financial institution to apply for a mortgage loan.
There are different credit models in the market; We describe them below:
These types of credits work under the loan scheme of a financial institution, assigning the borrower a certain amount that must be paid in installments for a certain period of time (10, 15, 20 years).
Its particularity is that it is only granted by one institution and not in conjunction with others.
Unlike traditional credit, the co-financing scheme works when a financial institution, called private banking or public bodies approves a loan, allowing the borrower to leverage another financial resource (credit from another organization). It has the peculiarity that can increase the loan amount.
Unlike the aforementioned, conjugal credit, as the name implies, is to raise the amount that each of the individuals that make up a conjugal partnership raised in their history of Infonavit or Fovissste.The advantage is that they can be combined both scoring and requesting a loan in private banking to increase your credit capacity.
There are institutions that have interesting solutions so you can buy a home:
Commercial banking is the set of banks that carry out operations of liabilities and assets, such as deposits, loans, as basic investment products.
How will your bank evaluate you?
Once you have chosen an institution to apply for a mortgage, you will be studied and qualified. Your credit history and income will be thoroughly reviewed: one, two, three … as many times as the bank considers necessary.
When evaluating you, banks are usually interested in your debts, unfulfilled payments of other credits or if you have ever declared bankruptcy or evaded financial responsibilities of any kind.
When you choose the financial institution and the solution that fits your credit profile, you will be asked for documentation and you will also have to observe the behavior of the interest rates that are updated in the market.
I. Requirements to obtain a loan
According to El Financiero , there are three things to consider in order to grant you a mortgage loan:
1. Age and Salary:
To be entitled to a mortgage loan it is necessary to be over 18 years and not exceed 64 years 11 months.
The calculation is based mainly on the monthly salary of the applicant, on the appraisal of the property and adds value if you have support from any public institution such as Infonavit or Fovissste.
Young people can receive up to 100 percent of the credit, while those over 40 also have good conditions but are not likely to credit for the total loan.
2. Credit history
As mentioned earlier, having a good track record in the Credit Bureau is essential for both banks and national housing agencies to see that you are current in payments.
3. Initial capital
To give way to credit, it is important to have the capital to be paid, administrative expenses, appraisal and deed.
“To be successful it is important to have a constant income and significant savings so that the payment of your credit does not affect your economy (the Condusef recommends not designating more than 30 percent of your income).” The financial
II. Interest rates
Just as there are three considerations to grant a credit, you also have to pay attention to the interest rates offered, whether the credit you analyze has the fixed, variable or mixed rate that we explain below:
Variable interest rate: The market behavior will determine this rate in such a way that, if the rate goes down, your payments too, but, if it increases, the same will happen with your payment.
Fixed interest rate: Percentage that is negotiated and that will remain the same for the duration of your mortgage. This option provides less risk.
Mixed interest rate: Mix the two previous options during the time you request your mortgage. This is how for a period of time you will have a fixed rate and another, a variable rate.
7. Formalize the Purchase
Write, review and sign the contract of sale
In the contract of sale it is essential that all points be placed on the table without exceptions, both the obligations of the seller and the buyer, the final amount negotiated, as well as the conditions under which the property is to be delivered.
I. Criteria of the contract of sale
Within the contract, the following points must be developed promptly:
Obligations of the seller such as sticking to the negotiated price, delivering the property in a timely manner as stipulated in the document, and that the property is free of debts or encumbrance, in addition to being involved in a legal process.
Obligations of the buyer where it is verified that he has the financial capacity to liquidate the total amount of the property and where it is assured that he will be the next owner of the property in question.
Final amount after negotiation, showing the agreement of both parties.
Delivery dates well stipulated so that the inconvenience between seller and buyer does not arise.
Delivery of documents from both parties to the notary to carry out the corresponding procedures after concluding the mortgage payment.
II. We remind you to review it carefully so that you do not miss any details: the names of both parties are correct, as well as the address and the price of the property.
III. Make the initial deposit according to the negotiated and what marks the financial institution with which the mortgage loan was requested.
I. Documentation required for the deed of a property
Official identification of the seller and marriage certificate in case the owner is married and has a joint ownership with his partner or someone else.
In case the seller is a commercial company, request the identification of the legal representative signed in the previous deed.
Have the title deed or notarized deed registered in the Public Registry of the Property with the information of the location and dimensions of the property, the name of the owner and the regime under which he acquired the property.
Have available the documentation that proves that it is free of service debts, property taxes for the last five years and lien. The latter refers to the debts of mortgage loans or property seizure problems.
Official identification / birth certificate of the buyer and his spouse, in case of signing jointly, as well as the marriage certificate of the buyers in question.
If a mortgage was paid, ask the issuing institution to deliver a letter of credit release.
Valuation in force.
II. Notary payment
The job of the notary public is to attest to the legal acts held, resulting in an important authority figure as it authenticates and verifies that the acts and the facts comply with the provisions of the law. If you have not been recommended by a notary, you can go to the List of Council Notaries, Colleges and Associations of Notaries.
He considers that the expenses of the notary’s fees are paid by the person who buys, but remember that resolving doubts does not generate any cost, since the advice and consulting is offered free of charge throughout the country.
The cost tabulators depend on the location, but only one-sixth of the total expenses correspond to the fees, the rest is applied for different reasons: procedures for the certificate of freedom of lien of non-debts, Acquisition taxes and expenses generated by the appraisal and the new writings.
III. Transfer of ownership
“The transfer of property is an act of a formal nature where a person with property rights over a particular asset or asset transfers these rights to another person (both persons can be natural or legal).
In other words, as a result of the transfer of ownership, the former owner of the property ceases to be and now there is another person who has rights over the asset. ” Economipedia
When you finish this process, you are ready for the move.