Guide to Buying Real Estate in Mexico

1. Property Investigation

There are restrictions on where and how foreigners may buy land in Mexico. In addition, records of property transactions may not be as well recorded in Mexico as they are in the United States or Canada, leading to disputes or conflicting claims on a property. A real estate attorney can help you understand how local restrictions will apply to any property you want to purchase and help you investigate potential liens or claims against the property before any agreements are signed.

Once you’ve selected a home or land for purchase, you can make an offer to the seller directly or through an agent, and then you can engage in negotiations until you agree on a purchase price. These negotiations are generally verbal.

2. Gather Documents (Appraisals, Certificates)

Your attorney will assist you in gathering several important documents required for completing the purchase. These will vary based on the type of property you’re purchasing but often include:

• The Title Deed of property
• Chain of Title
• Confirmation of Predial (property tax) payments
• Public Registry Certificates (official survey and appraisals of the property)
• No-debt certificates from any government entity
• Employment Contracts or Termination Notices for current or previous employees on the property
• Environmental, zoning, land restrictions of use

3. Quote from Notary (Taxes and Fees)

A government representative known as the Notario Público will oversee your transaction. They will review the title to ensure it is clear and arrange the official valuation of the property. The Notario will use this appraisal result to calculate taxes, so they will ensure that the valuation is accurate and not underreported.

4. Contracts (Real Estate, Escrow, Legal)

Real estate sales contracts have different names in different localities, but this sales contract might be referred to as a contrato de compraventa, convenio de compraventa, or promesa de compraventa. This agreement should state the agreed-upon price, payment arrangements, conditions and terms of the transaction, and penalties for violating the agreement. The deposit might be five percent to ten percent of the overall sales price.

5. Escrow (Secure Funds)

In many real estate transactions, the funds for the transaction are held in escrow until all terms of the purchase contract have been satisfied. A qualified attorney can help you establish and fund an escrow account for your purchase if needed.

6. Create or Cancel a Fideicomiso Bank Trust

Since all properties in the Baja Peninsula are in the restricted zone, when buying or selling a property you will need a Fideicomiso Trust, unless the transaction is done with a Mexican corporation, a lawyer can help you create the fideicomiso that will hold the property for you as a beneficiary. We can also help to cancel the property if the owner who is selling the property already has a fideicomiso.

7. Notary Signature (final payout)

After all the paperwork requirements have been submitted and all the taxes have been paid, the Notary will verify everything and will ask both parties to meet at the notary office and sign the final deed of the property, which will be recorded in the Municipal Public Registry. Usually, the final payment is transferred at this time.

Closing costs are often about five percent of the overall purchase price of the property. These fees include transfer taxes, the Notario’s fees, costs of the fideicomiso, attorney fees, and more. If you have a mortgage, closing costs can be higher.

8. Wait for Completed Title

The Notario handles all the collection of tax payments, other fees, and the recording of the property purchase with the Public Registry. Your responsibility is to provide all necessary funds. The Notario will handle the final property registration within two months approximately of the closing. Once the Notario records the signed escritura, it serves as title to the property.