Are you looking to buy real estate in Mexico? You are not alone, and foreign purchasers often run into the same obstacles when it comes to buying their dream properties. It is important to have a Baja California Sur real estate lawyer assisting you every step of the way and guiding you through the process.
The following is a brief guide to purchasing real estate in Mexico. For help with your specific property purchase, reach out to Baja Liberty Law Firm today.
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.
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:
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.
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.
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.
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.
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.
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.
At Baja Liberty Law Firm, we walk foreign property investors through every step of the Mexican real estate purchase process. If you need assistance, please contact our office for more information today.
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We were very impressed with the team of Attorneys at Baja Liberty who were able to draft several urgent documents on a Saturday and get the Notary to come to our house and notarize them on a Sunday.
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Francisco speaks fluent English, translates easily and is a tenaciously efficient navigator of the various agencies. He is extremely talented, respectful, and well-spoken in dealing with the municipal, state, and federal agencies necessary to resolve my complicated issue.
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