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If you’re interested in living in Mexico the first thing you need to find out is where you would like to live. Mexico has a fantastic variety of living environments on offer. In our Cities section you we find detailed information on many places throughout Mexico. Naturally, you will also need to find a property that suites your needs. SolutionsAbroad now has its own exclusive on-line directory of property for sale in Mexico and exclusive developments in Mexico. You can also ask any of our very well-qualified Certified Service Providers listed under Real Estate in our Business Directory for guidance.
Once you have found the perfect place and the ideal property, there are several procedures you need to fulfill in order to successfully own or obtain the rights to that real estate. With accurate information and by hiring the right advisors, you can safely buy real estate in Mexico. Here we have outlined the general buying procedure.
The first thing you need to do is, to make sure that the seller legally owns or holds title to the property. Likewise, you will also need to check that the owner is actually in the legal position to sell the property. As anywhere, you shouldn’t rely on information provided by the seller. Instead you should see the proof for yourself!
- The seller must be able to provide a copy of the public deed (“escritura publica”) stating legal title of the property.
- He or she must also have a lien certificate (“certificado de libertad de gravamen”) with a legal description of the property. A Mexican lawyer or title insurance company should also be able to check this for you.
Hire a Lawyer
It is always a good idea to have your own lawyer throughout the buying process rather than using that of, for example, the seller or real estate agent. After all, a lawyer that you contract will be working for you and act in your best interest rather than anyone else’s. Your lawyer will be able to review conditions, identify any problems, give you advice, formalize the transaction etc. When hiring a lawyer, you should check that they are actually licensed to practice law in Mexico (ask to see the documentation called “cédula professional”, an official license provided by the Ministry of Education by which people become “licenciados”, verifying this). Lawyers registered in other countries are not able to practice law in Mexico unless they have fulfilled all of the local prerequisites.
Making An Offer
After you have checked that the seller holds title and is legally able to sell the property the next step for you to do, as the buyer, is to make an offer to the seller. This should be done in written form (a contract) and it is a good idea to have this in both Spanish and English. This is a contract known as a Promise to Buy ("oferta”). The buying process only begins when the seller accepts the offer made by the buyer and when both parties have signed the contract. Usually the offer is accompanied with a 5-10% deposit of the offer price. Once the seller accepts the offer, the buyer is normally expected to deposit (check or money wire) half of the closing costs as agreed upon in the ‘Promise to Buy’ contract.
It is important to note here that all deposits you make throughout the buying process should go to the public notary or closing agent. This is always the safer option. You should never hand over any money directly to the seller. In fact, money is only be transferred to the seller and likewise the property is only transferred to the buyer, when the contracts are signed or "closed" in front of the public notary at a later stage.
After the offer has been accepted, the public notary (a government-certified lawyer) will handle and notarize all the closing documentation necessary for the proper transfer of real estate. This includes the registering of wills, appraisal of property for tax reasons, certificate of title search, the formation of corporations etc.
Bank Trust and the Restricted Zone
When it comes to the Restricted Zone, the only legal way a foreigner can buy property is through a bank trust. The buyer can appoint the Mexican bank of their choice to act as a trustee on their behalf. As a trustee, the bank will actually legally own the property. However, all the rights to the property will exclusively be held by the buyer. What this means is that the buyer will be able to use, improve, rent or even sell the property as though they directly owned the property.
Please note that most Mexican banks have been purchased by foreign conglomerates, so that if your trust comes from Banamex, you are actually dealing with Citibank. In the case of Santander, the bank is a subsidiary of the eponymous Spanish financial group in the case of Scotiabank it is a Canadian organization, etc. This situation can make some buyers more comfortable. If you would like to work with a reputable Mexican institution, Banorte is the largest independent Mexican bank.
Registration at the Ministry of Foreign Affairs
With any type of real estate acquisition, foreigners always need to register the ownership at the Ministry of Foreign Affairs. The rights to ownership are granted when the foreigner agrees to comply with Mexican law and to waive their rights to foreign government intervention. By doing so, the foreigner is considered as a Mexican National with the corresponding rights. In the case of acquisition of property in the Restricted Zone, it is the bank that requests the acquisition of the property at the Ministry of Foreign Affairs.
Closing the Transaction
The signing of contracts or “closing” the transaction must happen in front of the Notary Public. Just before this is done, the remaining amount needs to be deposited (once again these should be to the accounts of the notary or closing agent). With the signing and certification of the contracts, the deposits are transferred to the seller and the property to the buyer. It is common practice that the buyer pays the closing costs involved including acquisition tax, notary fees and other expenses. After signing the contracts and depositing the payments, the transfer of the property should not take longer than 45 days. And then that property in Mexico is yours!
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