Purchasing Property in Mexico: Part 3
In this edition of purchasing property in Mexico we will discuss the offer to purchase, what needs to be in the offer to purchase and how it works.
The offer to purchase is the first document with which you begin the process of transferring a property from the seller to the buyer. The offer to purchase can also be prepared as a reservation agreement or an earnest money deposit, and lists the main points of the future transaction.
If the buyer is non-Mexican, and buying within the restricted zone, the normal flow of contracts to be prepared are the offer to purchase, the promissory contract, and finally the purchase-sales contract, which will be drawn up and legalized by the notary public, then registered and filed at the public registry. If buying outside of the restricted zone, and the protocol can be executed immediately, the offer to purchase and the promissory contract may be avoided.
The offer to purchase, can be as complex or as simple as the buyer deems necessary. The offer to purchase is a preliminary agreement containing the basic information to execute the transaction. Any money released, such as earnest money, should be refundable during this phase. Also a reasonable amount of time should be allowed for the buyer or legal counsel to research and make sure all the property documents are in order.
What should an offer to purchase include?
- Names and personal info of both parties
- The date
- Description and address of the property
- Price and payment terms
- Provisions for the escrow
- Terms and conditions of the offer
- Name of notary
- Closing date
- Name of person responsible for closing costs (typically buyer), real estate fees and capital gain tax (typically seller)
- Responsibilities of both parties
- A clause indicating that the title shall be passed free and clear of liens or encumbrances
- Penalty clause in case of noncompliance
- Property condition
- Inclusions
- Jurisdiction
- Signature of the parties and witnesses
Is the Offer to Purchase a legal document?
Yes, this is considered a legal document. Once it has been signed and accepted by both buyer and seller, creating a binding commitment for the buyer to purchase and the seller to sell, it becomes legal. It can be signed before a notary or before two witnesses. Even though it does not need to be notarized, it does have a legal binding effect.
Who prepares the offer to purchase?
The agent representing the buyer generally prepares the offer and the agent representing the seller generally prepares the counter offers, if any. The offer to purchase should be prepared in English and in Spanish.
Stay tuned for part 4 on how to purchases property in Mexico or download one of the Top Mexico Real Estate E-books.
Now if you have any question about how to move to Mexico or any of the TOP MEXICO REAL ESTATE properties we have listed anywhere throughout Mexico, please feel free to contact any of our Top Mexico Buyer’s Representatives and we will be glad to help you find your very own piece of paradise.
And remember, here at TOP MEXICO REAL ESTATE…
We make it happen!
We would like to thank Puerta Zama for sponsoring this blog. Puerta Zama is a new development in Aldea Zama. To learn more about Puerta Zama, please click here.