GETTING STARTED ON YOUR PROPERTY PURCHASE
1. Make An Offer And Come To Terms On A Price
Submit an Offer To Purchase through a licensed real estate agent. At REmexico, we're Mexican Homeowners and understand your concerns because we've been in your shoes!
2. Sign The Sales Contract
This Offer To Purchase can be called a promesa de compraventa or contrato de compraventa, depending on local custom. The Offer To Purchase contract is where you document the price and specify the terms and conditions of the sale, including any special payment arrangements and penalties for default.
3. Open Escrow
Normally, this will be 5% to 15% of the mutually agreed upon sales price.
4. Work with the Transaction Coordinator and/or Closing Agent to gather documents
Initiate Creation Of The Fideicomiso If The Property Is Within The Restricted Zone
Alternatively, you can transfer the previous owner’s Fideicomiso into your name. This can save you time and money, but a transfer does not reset the 50-year clock… the Fideicomiso will need to be renewed 50 years from the time it was originally created.
Most foreigners appreciate the benefits of having their property in a Trust (Fideicomiso). It gives the owner a level of asset protection, and more importantly, allows them to do estate planning—using beneficiaries and contingent beneficiaries—without having to probate a Mexican will or follow normal probate protocols.
CLOSING PROCESS
Closing is the final step in executing your property purchase. It is during this process, ownership of the property is transferred to the Buyer and the title and deed are signed.
Closing Agent responsibilities include:
-Obtaining Permission To Complete The Purchase From The Foreign Secretary’s Office
You will be asked to sign a statement indicating that you will not seek foreign legal jurisdiction in dealings with your property transaction… In other words, Mexican property law will govern.
-Conduct The Title Review And Get The Official Valuation (Called Avalúo). Once again, the notary will perform or arrange these activities. The valuation will be used to establish the home’s value for tax purposes… so the age-old practice of underreporting the sales price will not work here.
-Initiate The Property Registration
All of this is done by the Notario Publico.
FINAL REGISTRATION
Final registration in the property registry will be completed and recorded within three to six months.
5. Closing DateWhen you signed your Offer to Purchase and it was accepted, a tentative Closing date is established. The real Closing date is set by the Notario Publico after all documentation and permits have been completed and received and documents have been prepared for signature to transfer property to the buyer. Generally, this date is set within the last two weeks of closing. Because the Closing date is not firm, it is often difficult for Buyers and Sellers to plan flights and accommodation on such short notice to attend the Close. A limited Power of Attorney given to a trusted person in Mexico such as your Real Estate agent can complete the deed transfer signing on behalf of you.
5. Closing Date
When you signed your Offer to Purchase and it was accepted, a tentative Closing date is established. The real Closing date is set by the Notario Publico after all documentation and permits have been completed and received and documents have been prepared for signature to transfer property to the buyer. Generally, this date is set within the last two weeks of closing. Because the Closing date is not firm, it is often difficult for Buyers and Sellers to plan flights and accommodation on such short notice to attend the Close. A limited Power of Attorney given to a trusted person in Mexico such as your Real Estate agent can complete the deed transfer signing on your behalf.
6. Closing Costs
Closing costs should be about 3-5% of the purchase price. This includes a 1.5% notary fee, a 2% transfer tax, and a few other odds and ends, including the fideicomiso setup fees.
The Bottom Line When Buying In Mexico is to be comfortable and confident in your Agent.
Your experience buying property in Mexico will most likely be a good one. Be certain to interview, chat with and connect with a genuinely-certified REALTOR® At REmexico we strive to be that Agent. Make sure you buy from a reputable real estate company, who employs real agents, and follows the rules. When in doubt, don’t hesitate to call a time-out and ask questions until you’re satisfied. Don’t be afraid to clarify Spanish conversations you’re hearing, or terms that are new to you.