The buying process
5 simple steps to ownership of a property as a foreigner.
1- FIDEICOMISO. Title to the property is held in a Mexican Bank trust called a FIDEICOMISO.
2- THE BUYER. Is THE BENEFICIARY of the Trust.
3- THE MEXICAN BANK. Acts as the Trustee.
4- THE BUYER HAS ALL. The Rights of fee simple ownership just as they do in the States or Canada.
5- THE FIDEICOMISO IS RENEWABLE. Every 50 years and can go on Forever.
The cost of this ranges from $500 to $1000 USD to set up. And, you do have to pay your yearly fee of $500 to $1000 USD for maintenance.
This is set up by the notary. However, you can pick the bank or institution you want to use as your bank trust.
That is it. You can own a property in Mexico!
All you need to do is prove you are a local national by providing an IFE or INE (Identification Card).
No need to get a fideicomiso!
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Buying property in Mexico through a corporation?
Offer And Acceptance for buying a property in Mexico
Make an official offer. You should write both the offer and acceptance. This ensures no confusion on terms and conditions. Send your offer in the form of a “Promise Agreement” contract. Detail the main terms of the sale. Include price, payment plans, details on an earnest money deposit. The deadline for the seller to accept the offer is usually included. These are all standard practices when buying property in Mexico.
As soon as the seller has accepted your offer, make an earnest money deposit. Either by the real estate agent or the buyer’s attorney must hold this payment. In Mexico, it is recommended that you open an escrow account to hold this deposit.
What Is Escrow?
Escrow is a legal concept describing a financial instrument whereby an asset is held by a third party on behalf of two other parties that are in the process of completing a transaction. The escrow agent holds the funds or assets until it receives appropriate instructions or until predetermined contractual obligations are fulfilled. Money, securities, funds, and other assets can all be held in escrow.
You should include a clause in the offer that guarantees the deposit if either a promissory agreement or a final sales agreement isn’t executed in a certain amount of time; also note who received the deposit. If the seller requires it to be non-refundable, make sure it’s not more than you’re willing to lose.
Delivery Of Unit
Finally, do a walk-through to ensure that your property is being handed over in good condition before you take it. Once you’re satisfied, you’ll sign a delivery statement. This details the official delivery date of your property.
Keep in mind that your attorney or closing coordinator can handle the entire purchase process. As a result, you don’t need to be in the country for every step. Lastly, by granting your a power of attorney, anyone can assist you through each stage of the sale. That is to say, every stage all the way up to the signing of the closing deed on your behalf.
Closing Costs and items to pay for
Firstly, verify everything is correct. Secondly, when all the closing paperwork is ready, you will get a notice of a due date and the final closing costs due. Finally, you will sign the deeds, payments settled, and the title transferred to the bank.
|Certificates of no encumbrances and no tax lien||US$200 – US$300||Buyer or Seller (Negotiable)|
|Notary fees||US$650 – US$1,200||Buyer|
|Public registry filing fee||US$100 – US$300||Buyer|
|Appraisal fee||US$300 – US$500||Buyer or Seller (Negotiable)|
|Acquisition tax||2% of purchase price||Buyer|
|Trust permit fee (50 years)||US$1,000||Buyer|
|Foreign investment registration fee||US$300 – US$800||Buyer|
|Administrative and closing costs involved in a typical transaction|
*The seller may use his own real estate attorney for the transaction. In which case, he would be responsible for covering this separate legal fee.