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Practical Tips for Successful House Hunting in Mexico

Article Summary:

It’s easy for foreigners to buy in Mexico. Most foreign buyers come from the United States, Canada, and Europe and are snatching up second-hand homes in San Miguel de Allende, an artsy and picturesque town three hours from Mexico City. The New York Times offers tips and breaks down the steps for successful house hunting in Mexico.

Photo Credit: Rose Wood Hotels

Original Article Text From New York Times:

House Hunting in … Mexico

A Moroccan-Style House with Seven Bedrooms in San Miguel de Allenda $3.9 Million

Local artisans took five years to build this house into a steep hillside four blocks from the town square in San Miguel de Allende, an artsy and picturesque town three hours from Mexico City. Built in the Moroccan style, it has four levels, with interconnecting hallways and staircases. An adobe structure floored in polished gray cantera stone, it is terraced down the hill from the street-facing property entrance. An antique wooden door opens to a covered walkway leading to the home, completed in 2005.

Off the walkway to the right, steppingstones to one of two guest suites are arranged across a pond. Directly ahead, below a round “bull’s eye” window, the wooden door to the core house is bordered by carved stone. It leads into the hall that functions as the main artery.

Through an arched doorway off the hall to the left is a bright Mexican-style kitchen, with decorative blue tiles lining the doors and window frames. Its traditional Mexican ceiling, called a boveda, is lined with ivory-colored tile; it arcs upward to a glass cupola. The room has a double oven made by Coriat, a high-end Mexican brand, and a double stainless steel sink. The adjacent breakfast room has pale green walls and built-in cupboards. Beyond the breakfast room is the dining room, illuminated by an ornate wrought-iron chandelier.

Farther down the hall is the living room, which has a stone fireplace, cream-colored walls and three pairs of French doors leading out to a terrace. The living room connects via another hall to the master suite, which has an arched window overlooking the landscaped garden. The master bath, lined with forest green tiles, is outfitted with a bidet, a shower and a bathtub.

Two additional bedrooms with en-suite baths are downstairs, and a second guest suite has three bedrooms and three baths, a living room, and a kitchenette suitable for vacation rentals.

The terraced backyard has an infinity-edge pool, a hot tub, an outdoor dining area, and a stone amphitheater for outdoor performances. The garden is planted with palms, clivia, pampas grass and pecan trees. The half-acre property also has a one-car garage.

San Miguel de Allende, with its narrow cobblestone streets and old-world character, is a culturally rich central highlands city popular with expatriates and tourists. The Centro, or central neighborhood, is one block away. It includes an array of restaurants, boutiques, galleries and historic buildings. The nearest airport is about 75 minutes away in Le”n, and Mexico City is a three-hour drive.

Mexico’s tourist towns are slowly recovering from the global economic crisis, said Larry Stebbins, a broker for San Miguel Sotheby’s International Realty. The Mexican market is highly dependent on the United States economy, and the financial crisis in 2008 took an immediate toll on Mexico’s second-home market. Prices in San Miguel, for instance, dropped 25 to 30 percent from their peak in 2007. “There’s a saying here,” said Mr. Stebbins: “If the United States gets a cold, Mexico sneezes.” Prices are still down in beach towns like Cancún and Puerto Vallarta, but Mr. Stebbins says the persistently low numbers are starting to attract bargain-hunters, so that more houses have been selling in recent months.

Another factor inhibiting sales, at least nationally, is drug violence, though this is not an issue in San Miguel. Many are hoping that the new president, Enrique Peña Nieto, who was inaugurated on Dec. 1, will make good on campaign pledges to reinvigorate the economy and recalibrate the country’s approach to drug traffickers.

The market in San Miguel de Allende remains fairly stagnant, said Ricardo Vidargas, owner of Dotty Vidargas Real Estate. Sales above $800,000 are rare, and even fewer houses above $2 million have sold in the past year. “A lot of people are getting desperate,” Mr. Vidargas said, “and so prices are coming down.”

At this point, he added, only houses in the moderate range of $400,000 to $600,000 are selling. The popularity of this market niche is partly attributed to homeowners who are downsizing from expensive properties during the North American real estate boom in the early 2000s.

Luxury homes in the countryside surrounding San Miguel command $900,000 to $2.8 million, according to Mr. Stebbins. Homes in the vicinity of the Centro cost $1.5 million to $4 million. The home profiled here is priced at $3.9 million, because of its large half-acre lot, a rarity so close to the Centro, said Holly Houston Ortiz, a real estate agent with San Miguel Sotheby’s International Real Estate and the listing agent for this property.

Foreign buyers come from the United States, Canada and Europe, Mr. Stebbins said. Canadian and American buyers are the most prevalent in San Miguel de Allende, according to Ms. Ortiz, who adds that Canadians have recently increased in numbers because of the strength of their currency. She occasionally sees Italian or Spanish buyers, in addition to a handful of buyers from Central or South America. Mr. Vidargas says Mexican buyers are becoming more common in San Miguel, especially in the middle price range of $400,000 to $800,000.

It’s easy for foreigners to buy in Mexico, Mr. Vidargas said. While there are some restrictions on beachfront land, or land adjacent to the borders, neither restriction applies in San Miguel. Mr. Vidargas says foreigners must obtain permission from the government before they buy, but “it’s a no-brainer to get that permit,” he said. The process costs about $50.

The only major transaction costs are legal fees. Mr. Vidargas says these vary depending on the lawyer, but are usually around 1.5 percent of the purchase price. The seller pays the real estate agent commission.

High-end real estate is often priced in American dollars, according to Ms. Ortiz.

Link to Original Article:

From New York Times

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