|Check this list for buying property in Mexico.
When you have found the villa, lot or condo, which you want to buy, there are a series of choices
that you have to make. The purpose of this list is to mention various decisions you should make as
you go through the process.
1. You have found the property and now you are ready to make the offer. Someone will need to write the contract. It can be
your agent, the buyer or seller or an attorney whom you hire. There are no standardized contracts and they will vary in
content and completeness. An offer to purchase can be a two-tiered affair. There can be an "agreement to agree",
followed by a binding agreement of sale. Some sources say that with proper wording, only one step is required and one
purchase agreement. To be binding, the sales contract must have the signatures of the buyer and seller witnessed and the
contract should be signed before a notary. The offer should be in Spanish with a courtesy English translation.
2. You are going to buy the property in a bank trust in this area (if you are a foreigner) or a Mexican corporation. (for
non-residential investment real estate). The first option will be the most common. You have a choice of paying for a new
trust, or in many cases assuming the existing one of the seller.
3. The custom in Baja California is for the buyer to deposit good faith money when there is an executed agreement. There
is a wide variance here of how the deposit is handled. There are title companies from the states that are licensed to
receive escrow deposits on Mexican property. The title companies may require that you take out title insurance and there
is a fee to have the escrow account. In some cases, the deposit is in the form a cashier's check held by notary. The notary
is not required to act as an escrow agent. As a courtesy, he may agree to hold funds. The notary may release the funds to
one of the parties, without being in default. You should not assume that the notary serves the same function as a title
company or escrow officer in another country. There are also Mexican banks with charters allowing them to establish
escrow accounts. The funds are held in US dollars for the purpose of the sale. The use of escrow as we know it, has not
been a common practice in Mexico. Commom practice is to let your realty agent hold the deposit and turn those over to
the seller in the Notario Publico's office at time of transfer.
4. Your contract needs to list the other items you want checked or provided before you close. An example is in the case of
a condominium sale. If you want the administrator of the condominium association to write a letter that explains what the
fees include, whether there is a reserve, what capital improvements are anticipated, the income and expenses of the
building, whether there are any pending lawsuits, etc., this all needs to be written into the contract.
5. If you want a new survey of the land, you need to require it and expect to pay for it. Otherwise, the survey and legal
description may be copied from the prior escritura, and may be wrong. In most cases, the Notario Publico will require a
new survey if the previous one is more than 12 months old at closing.
6. You, as a buyer, have the choice of which Notario Publico to use. A notary is a specialized attorney, appointed by the
state to transfer real property. The notary in Mexico does more than an American notary who notarizes signatures. Ask
around to decide which notary you want to use. Most notary offices have a bi-lingual contact person on staff. If you want
this additional aid, then find an office that offers this service. You don't have to be in the dark and unable to communicate
about the serious business of buying real estate. Most buyers will hire a bilingual Mexican attorney to assist them.
7. The notary does a number of jobs in regard to the transfer of property. He does not do everything that you want or think
important. Ask questions about what the notary job covers and does not cover in the transfer of property. "Assuming" will
get you in trouble. You will need to provide the notary with the information he requires to start the permit and closing
process. He will likely require a deposit, usually half of the estimated cost, to start the process.
8. The notary or your attny or the Bank will have to apply to Mexico City to the Foreign Affairs Department for a permit to
establish a trust in a restricted zone, unless one is already in place and you are buying the transfer or trust rights. A bank
in Mexico will be the trustee of your property. You, the buyer are the primary beneficiary to the trust. You will also need to
give the notary names of your substitute beneficiaries in case of your death, as this instrument becomes your will in the
disposition of this real estate.
9. The notary's office will notify the parties when you are ready to close. You will need to pay at closing the balance of the
closing costs due the notary. The total closing costs are generally 4-8% of the purchase price, depending on the prices of
the government fees and the amount of the transfer tax, and several other variables, including the avaluo (Appraisal). You
will be working off of an estimated closing cost statement until you receive the final one, which should be current as of the
day of closing. You should receive a formal receipt of payment from the notary for these expenses.
10. The seller will owe fees such as commissions, bank trust cancellation fees, and capital gains, if due. If someone is on
their toes, they will check to be sure that the seller is current with ALL UTILITY payments. If you have negotiated that the
phone line in your purchase price, the seller will need to give you certain documentation to present to Telnor in order to get
the line transferred. The notary will verify that the water bill and property taxes have been paid. A no-gravamenes
certificate should be provided which states there are no liens of record on the property from both the municipality and the
state, as well as the HOA if a condo. This certificate is good for only a short period of time, and can expire if the closing
takes too long to be completed. A new one will need to be issued. The appraisal for tax purposes is good for a certain
period of time only before it needs to be re-ordered.
11. If you own property in Mexico, an FM3 visa will establish the property as your declared residence. To meet the
requirements for avoidance of capital gains when selling, you must have an FM3 or FM2 with the address of your
residence, listed as your Mexican residence. There are additional simple and uncomplicated rules which apply as well and
your attny can explain these to you
12. Be sure you pay your taxes every January and your banks trust fee the month it becomes due. The date on the
escritura or Bank Trust establishes the date when the yearly fee is due and payable. Don't expect to receive a bill in the
mail to remind you to pay either of these fees. It is your responsibility to go to the tax office or bank and make your payment.
13. Renew your FM3 every year in order to keep your permanent residency rights.
If You are interested in the assistance of an MLSbaja.com agent
in guiding you through any purchase, simply ask below and we will be in touch with you shortly
Investing in Mexic
|DEDICATED AGENT SERVICE AVAILABLE FOR BUYERS
Though we look forward to assisting as many “FSBO”, or “For Sale By Owners” as possible, a drive through Baja California
reveals a very high percentage of homes for sale are just that, with faded and weathered signs from the local hardware
store, not listed with any agency.
Often the contact information is all but missing, or the phone number has changed or does not get answered.
Because we constantly drive and know the area, we know where they are, and often even have a few photos plus the
contact information at hand. Many have listed themselves because they simply do not want to pay a realtor a commission,
preferring to go it alone. Some are overpriced, some are bargains, and many simply will not want to talk to a commission-
based realtor, for their own personal reasons, which we believe is a mistake when the real object is to find a buyer.
It greatly limits the number of real buyers who may be interested in making a fair and legitimate offer.
As your dedicated agent, this presents no problem, as they may not be paying our fee, and the price they negotiate is theirs
to keep. This can open a lot of doors otherwise closed to buyers, yet do so with the assurance of having experienced
professionals dedicated to representing your best interests.
FSBO's quite simply intimidate many buyers, especially in a foreign country.
Traditional realtors are hardly apt to show them either, for obvious reasons, yet there are many wonderful bargains out
there, and we can be hired as your agents to find you the perfect home, walk you through the legalities of purchasing
safely and legally, including the large inventory of homes not listed through any traditional methods. We find the homes for
you, or just arrange the showing appointments from our Rosarito location. We can preview them to save you time. And
because we are working directly for you, not the seller, can act as your confidential negotiation team, knowing the
questions to ask, the documentation needed and even assist you in the offer and purchasing tasks.
These services also extend to working for you in arranging showings and listings of
other realtors, which can save you time and money if you are serious about finding just the right home for you.
For More information, Please ask in the form below....Scroll down..
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|The information on the MLSbaja.com website is believed to be accurate ,however; any prospective Buyer should as always, perform due
diligence and consider competent legal advice from a Mexican Attorney to confirm the validity of any documents or statements before
committing to any contract.