Every transfer of Mexico real estate property MUST, by law, be made before a Mexican notary public.

The Mexican notary public is required to have a degree in law.  He must have a minimum of five years of legal practice, pass a rigorous examination and then be appointed by the governor of the state in which he/she resides.   The notary is legally responsible for the review of the prior deed and the tax and lien certificates.  The notary must draft the new deed, calculate the Mexico property taxes due and pay them.  Also very important, the notary is accountable for his/her actions through the state and national notary associations.

It is commonly believed that an attorney, in addition to the notary public, is required when buying property in Mexico.   This is not necessarily the case.  In fact it may make more sense to seek out a CLOSING AGENT to handle the many details of the transfer, such as ordering and reviewing the title investigation; obtaining the certificates and trust permits, interfacing with the buyer and seller, answering their questions and concerns in their native language, explaining the nuances of the transfer process; overseeing the payment of funds for these services and expenses; reviewing the deed to be sure names and addresses are correct; being sure it is registered in the public registry of property; making sure it is delivered to the buyer; providing tax receipts to the seller………….and more!

When these matters are left with the Notary Public to handle, they may not all get done, or get done slowly due to the work load of most Notaries.   When these matters are handed to another attorney to perform, they may be sandwiched in between criminal complaints, court appearances and other more remunerative activities.

A good Closing Agent can be an attorney with expertise in title transfers, or it can be a company with experienced closing officers and attorneys on its staff for consultations in the event there are title issues.   More and more there are closing agents throughout Mexico.   They are specialists in titles and transfers.

The role of the Mexico closing agent

An experienced Closing Agent is a key person in the real estate purchasing process. Hiring a good Closing Agent who understands the ins and outs of the Mexican legal system and the requirements of the law as it relates to foreign investment will make the real estate transaction go much smoother.

The closing agent should be involved in drawing up a promise contract and reviewing all documents including title, certificate of no encumbrances, and  permits. A closing agent can also order a complete title search before the transaction reaches the notary public, which will save the buyer valuable time and money should there be a problem with the title.

The prudent buyer will always insist upon using a neutral third party closing agent to protect his or her interests.

Professional Closing Agents will have bi-lingual and experienced closing officers on staff to review the legalities of the transaction and to ensure that all the documents received are in order. Prudent buyers also enlist the help of the Closing Agent, who can oversee the permit process, review the draft of the deed being used in the transfer of title and order the title investigation, identifying any problems before the title has been transferred and money exchanged.

Finding a Trustworthy Closing agent

Clients should never hesitate to ask for details of the professional experience and references.  This is even more important when the real estate agent in the transaction is representing BOTH buyer and seller.  This is dual agency which is still common in Mexico.   In this case the buyer should definitely seek out his/her closing agent.

Questions to Ask a CLOSING AGENT: What exact services will you provide? What areas of law or real estate are your specialties? Can you provide an estimate of taxes and closing cost expenses? Will you order or conduct a title search? Can you provide at least three references?   Do you have experience with transfers to foreigners, Mexican bank trusts and foreign investment? How long have you been offering Closing Services to the public? How do you handle the funds you receive for closing expenses? Do you prepare specific instructions for the disbursement of funds?

Closing Agents do not have to be specifically licensed in Mexico to be able to supervise the transfer process of Mexican property. It is important to be cautious and do the same homework as when researching a real estate agent. Ask for credentials and references. The more experienced the staff and in-house counsel the company has in handling foreign investment transactions, the more protection and safety the buyer should have in a Mexican property purchase.

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 THE www.TOPmexicorealestate.com NETWORK

“Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

No way Jose!  No matter if you are buying a Puerto Vallarta beachfront condo, a home in Mexico, or whatever type of property.  Don’t leave money with the seller.  We have an old saying in our Puerto Vallarta real estate office, it is:  “Don’t leave your brains at the border!” Now Joe, if you were going to buy a home in the steel city, would you give the owner cash before closing?  Of course you wouldn’t.  (Or at least I hope you wouldn’t.)

In the event your Mexico real estate transaction does not close, it would be difficult, expensive and time consuming to recover your deposit.  For that reason, the standard practice here is to draft a formal contract of sale, which both buyer and seller will sign.  This contract should state the agreed price and terms of the sale and stipulate that any deposits shall be made to a neutral third party escrow account established specifically for the transaction.  There should also be provisions to return your deposit if the transaction does not close, as well as agreed upon penalties in the event one of the parties fails to comply with the terms of the contract.  There are several established financial institutions that are able to handle escrow accounts here, First American Title, Stewart Title and Monex are some of the most common.  Typically the buyer is responsible for the cost of the escrow (approximately $500 USD per transaction) but this is a small price to pay for the peace of mind that your money is in a safe place.  These fiduciary institutions have the legal responsibility to guard your deposit and not release it unless both you and the seller agree in writing.  In the event of a dispute, a judge would rule on final disbursement.

For new Puerto Vallarta beachfront condos in pre-construction phases, it is common to give the developer a deposit with the sales contract and make progress payments as the building is being constructed.  For this reason, you want to make sure that the necessary plans and permits are in place and the developer has a sound business plan and proven track record.  You should also ask for a completion bond in order to guarantee your deposit, or insist that your deposits remain in an escrow account, only to be released upon certain pre-established stages of completion. Please note that Spanish is the binding language in the sales contract,  (, (with English translation often provided as a courtesy) so I strongly encourage you to enlist the expertise of a local TOP Mexico realtor.  Joe, I hope you can see that the days of unprotected real estate investments in Puerto Vallarta are long gone, so “Don’t leave your brains at the border!”

Do you have a question about the Puerto Vallarta Real Estate market? Just ask!
Michael Green moved to Puerto Vallarta to take advantage of the unsurpassed lifestyle PV offers. Today, with over 12 years of experience, Mr. Green is one of the most recognized brokers in Vallarta. TOP Mexico Real Estate “Mexico’s Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely!”

Find out how to protect your good faith deposit and Mexico Earnest Money.

Your ready to buy your piece of paradise, but handing money over to someone you don t know in a foreign country is a scary proposition. So how do you protect yourself from a fraudulent situation

Purchasing property in the Cancun real estate market and even in all regions of the Mexico real estate market is a quite different process than in many other countries. And when it comes to handing over deposit money, many buyers make the mistake of leaving their good judgment at home; thinking this is Mexico and this is how business is done here.

Most of those trustworthy buyers have purchased without problem, but there is always a risk. It is not necessary to have a Mexico Real Estate license to sell propeties So it is important to know who you are dealing with and how to protect your interests.

Mexico Escrow Services

Although not widely used in Mexico, escrow services are available through well know US companies and should be your first choice. There is a fee, but the protection it offers is well worth the extra expense.

Escrow is mostly used for re-sales but the property owner must be in agreement This can sometimes be an obstacle as some Mexican owners do not understand the concept of escrow. In most cases the listing broker can convince the owner if it is properly presented.

Mexico Broker

This would be the next option only if the property owner will not accept escrow deposit. Either the listing broker or the buyer s broker holds the deposit. This is more of a risk, so ask for references and DO CHECK THEM.

Mexico Developer

Most developers will not accept escrow deposits as they use incoming funds for construction. Deposits may be refundable or non-refundable (before the contract is signed) so do ask. It is important to work with a broker that you trust to present you with projects by developers with a proven track record.

The Mexico Property owner

It is customary for the initial deposit to go directly to the owner in the case of a re-sale. This is very risky and I do not recommend this situation. If unavoidable, do so in conjunction with your OWN Mexico real estate lawyer, following his advice so he can make sure you are legally protected.

Yucat n has been the attention of many international real estate investor in recent years With the many Haciendas, the old colonial architecture, and the increasing amounts of non-Mexican buyers, where can people begin their process into buying property here in paradise We asked Mitch Keenan, a Yucatan Real Estate broker, very well known throughout the entire Yucatan Peninsula, and with many years of on hand experience in Mexico Real Estate to help us out with this post and blog.

This post is about real estate in the states of Yucat n and Quintana Roo The author, Mitchell Jay Keenan,CRS is the general director and the operating broker for Mexico International Real Estate.

Keenan has been living and selling real estate in Yucat n for over 10 years. He has been a licensed broker in the USA since the 1980's. He holds a GRI (Graduate Realtor Institute) and a CRS (Certified Residential Specialist) certifications from The National Association of Realtors (NAR). He currently lives on his Quinta between M rida and Progreso with his partner and their four companions; Wazer, Lover, Lucky and Miri.

Yucatan Real Estate Brief History

Understanding the dynamics of the real estate market in Mexico requires a reflection on the socio-economic conditions that have developed in Mexico over the last several decades. The large middle class that has emerged in the last 30 years has provided for a more robust market. Additionally, with the growing foreign interest in living and investing in Mexico, the market is becoming more dynamic and secure for investment and ownership.

Historically, Mexico was a country of basically two large economic groups; the rich and the poor. The poor rarely owned real estate and the rich tended to subdivide what real estate they had and pass it on to their heirs.

The current real estate market (where two previously unknown parties come together to buy/sell real estate) is still a relatively new business in many regions of Mexico. This is the reason why, in most of Mexico, there is no MLS, no real estate licensing requirements for agents, no governmental oversight, limited institutional financing, and few large, organized real estate companies or real estate professional organizations.

The exceptions to this current scenario are Mexico City, Monterrey, Guadalajara, and many of the coastal resort areas, where there are limited MLS's, large brokerage firms, and functional professional organizations like AMPI.

It is important to remember that Yucat n has been like an “anonymous region” separated from Mexico for decades. Yucatecos tend to think of themselves as Yucatecans first and Mexicans second. Rules, regulations and new businesses practices have tended to evolve here more slowly than in other regions of Mexico.

Mexico Real Estate Purchasing Process

Historically, in Yucat n, when two individuals come together in an agreement to buy/sell real estate, the parties have utilized a “promise to buy/sell” real estate agreement. The agreement is typically drawn up by the Buyer's notario.

Note: the buyer is responsible for paying the notario and closing costs. The seller is responsible for paying their capital gains taxes.

Upon signing, the buyer gives the seller a deposit to hold as earnest money to seal the deal. In return, the seller provides the notario with current and notarized escrituras (title documents), cedulas (tax statements), planos (lot plan), personal data, and corresponding information.

This “promesa de compra/venta” is a vehicle still popularly used in Yucat n, and it is not unusual for a seller that is not represented by a real estate agent to require this contract with the understanding that the seller will hold the earnest money deposit.

Should the buyer fail to buy, at no fault of the seller, the buyer will forfeit the deposit. Should the seller for no fault of the buyer, refuse to sell, there is a penalty clause in the contract penalizing the seller to return the amount of the original deposit and pay a penalty equal to the amount of the deposit. If the seller does not return the deposit and pay the penalty, the buyer will have a very strong case for filing a lien against the property and pursuing legal action against the seller.

Mitch Keenanhas been a Licensed Broker in the United States since the 1980s He holds a GRI and a CRS from NAR (National Association of Realtors) With over ten years of living and working in the Yucatan real estate industry, Mitch brings American business ethics and Mexico business experience together to give buyers unparalleled service www.TOPmexicorealestate.com 512-879-6546

All too often citizens of the United States, Canada and other countries ASSUME that property purchases are carried out automatically in Mexico in a manner similar to that of their native countries The first law of property purchase in Mexico is DON`T ASSUME anything! Purchasing property is NOT the same as in other parts of the world

Would You Purchase a Property in Your Hometown Which Is Not Registered in the Local Public Registry or Land Titles Office

Would you hand a complete stranger, without an office or an established business entity, a check for perhaps hundreds of thousands of dollars to pay for a property Why do so many foreigners do this when they purchase in Mexico Many do not realize that Mexico has a complex and complete legal system and a court system that is as well organized as any that exists in the United States, Canada or Europe It is essential that you have an idea of how the system works and what to expect when considering a purchase of property in Mexico

Don't Leave Your Brain at the Border!

Article 27 of the Mexican Constitution prohibits ownership by a foreign individual or business entity of real property (real estate) within the “restricted” zone which is an strip of approximately 30 miles from any coastline and 60 miles from any border Recognizing the demand by foreigners for ownership of property and recognizing the importance of making desirable properties available to foreigners for potential positive impact on the economy, the Mexican government implemented a series of Foreign Investment Laws beginning in 1973 The law was modified in 1989 and again in December 1993, to incorporate the provisions of the NAFTA treaty passed in late 1993

For those who are acquiring property for residential usage, the law requires that title to the property in the restricted zone be transferred to a Mexican bank, as trustee, in the establishment of a trust (fideicomiso) in which the foreigner is the beneficiary The bank is the titleholder of the real property and the foreigner is the owner of the rights of usage of the property The bank owns the real property rights and the beneficiary owns the personal rights of usage Ownership of these personal rights is evidenced through a deed prepared by a Mexican Notary Public and signed by a representative of the trustee bank

Currently the term for a trust is fifty years The Foreign Investment Law of 1989 provides for renewal by filing an application Multiple renewals are permitted under the law By requesting extensions every fifty years, a property may be controlled by a family or business entity for generations For those foreign individuals or companies buying property in the interior of the country, not in the restricted zone, no bank trust is required but authorization from the Secretary of Foreign Relations must be obtained and ownership must be registered in the National Foreign Investment Registry located in Mexico City, as well as in the municipality where the property is located

Avoid Mexico Taxes and Extra Costs. Leave the Mexico Deed in the Seller's Name: This is Wrong!

Until the buyer is formally named as the owner in fee simple or in the bank trust in a public document before a Mexican Notary Public, title to the rights in the property remain with the persons named in the previous property deed Their signatures are required to transfer title If the buyer fails to obtain his or her own deed he/she will be required to obtain the titleholder's signature before a sale and transfer to another buyer This can be costly, frustrating, dangerous and time consuming

The Importance of Mexico Registration of the Deed for Beneficial Rights.

The Mexico purchase/sale document signed by buyer and seller is generally legally valid between the parties to a transaction It most likely contains the description of the property, the price to be paid to the seller, and any other special terms and conditions It WILL NOT, however, provide valid notice to third parties unless it is recorded in the Public Registry Office of the municipality in which the property is located Mexico's land registry system functions in much the same manner as the Public Registry offices in Podunk, North Dakota, Los Angeles, California, Ottawa, Canada or places in between

many foreigners purchasing property in Mexico do not understand the importance of registration of their interest in property They believe that it should be left in the name of the property developer, in the Master Trust, or in the name of the previous holder of title What if the developer goes bankrupt What if the corporation and its principals, disappear Who can sign as the representative of the property Who then owns the property What happens if an unscrupulous seller sells the property to someone else While title is in the name of the seller, it is HIS/HER asset; she may mortgage it, he may sell it again, it may be attached in satisfaction of a judgment, she may die without a will

Unless the Deed for the rights of the Beneficiary has been Recorded, there may not be a remedy for the purchaser who neglected to obtain a registered deed…his or her interest and investment, may be lost

To obtain the deed an appraisal, a property tax certificate, and a no-liens certificate must be obtained Notarized bank instructions must also be obtained if property is in the “restricted” zone Seller's capital gains tax and Buyer's acquisition tax must be paid The deed transferring rights to the buyer must be registered and stamped by both the tax office and the public registry If this process is not complete, the buyer is not fully protected The buyer's ultimate protection is registration in the Public Registry office record, NOT the Notary Public or the trustee bank!

Financed Properties in Mexico

When property is sold with a down payment and the balance to be paid over a term of years, many sellers prefer to hold title to the rights in their name and transfer title to their rights only upon receipt of payment in full Meanwhile, however, the seller may die, may disappear, may bo bankrupt…again risky situations for the buyer the prudent buyer will insist upon a transfer of title and registration of a mortgage or pledge in which he gives his rights in the property as security for payment of the remaining purchase price

In the event of default by the buyer, the seller must conduct a proceeding similar to a judicial foreclosure in the United States and Canada It is as troublesome as a foreclosure in any country in the world but notably more problematical The registered title and recorded pledge or mortgage provides the buyer a greater comfort level in his investment The lender also enjoys protection in having his loan recorded and will have an established legal proceeding to follow in the event of default by the buyer

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

“Where TOP real estate experts from ALL regions of Mexico come together to share their Tips & Knowledge to help you buy safely !”

I have been involved in hundreds of Mexico Real Estate transactions Hardly any of the Mexico Real Estate Purchases have had the same procedures, or the same situations to occur As in any real estate transfer, there are many factors and parties involved, and when dealing in Mexico, with Mexican foreign buyers or sellers, the variables only increase

Thus, there is a high probablity that when you go to buy Mexico Real Estate transaction, it will be unique in itself, have its unique obstacles but following a common and legally protected Mexico Real Estate processI have written an introductory guide from my many years of Mexico business experience outlining the steps involved in How to Buy Real Estate in Mexico which I have shared with many first time Mexico buyers and sellers.

MEXICO REAL ESTATE DEFINITION

Lets start with the definition of Mexico Real Estate Click here to see a generalDESCRIPTION OF MEXICO REAL ESTATE As outlined in this web page definition, Mexico's Purchasing Process has several EXTRA steps if the buyer or seller is a Mexican Foreigner There exists a Mexico Restricted Zone where the buyer will need to establish a bank trust Or, if you purchase outside of the restricted zone you can hold the property out right but just need to receive a simple permit from the Mexico Foreign Affairs department

MEXICO REAL ESTATE PURCHASING PROCESS

a) MEXICO REAL ESTATE AGENT

First tip,surrond yourself with a very well qualified Mexico Real Estate agent and broker When you are hundreds of miles away back in your home country, simple obstacles can easily become headaches if you have not taken the first intelligent step of surronding yourself with professional agents Ask for certificates, diplomas and credentials Are they members of any associations, if Mexican foreigners how long have they lived in Mexico and working in the real estate industry Do they speak spanish AMPI link

b) MEXICO REAL ESTATE FINANCING

Second, define the amount of money you plan to invest in your Mexico property investment If you plan to Mexico financing the purchase, begin to study and see if you qualify for such resources Do you plan to finance using the Mexican property or raise money from your home country Define these issues before investing time and money on your Mexico property search.

c) DEFINE THE MEXICO REAL ESTATE CLOSING COSTS

Third, understand all the costs that will be involved in the real estate acquisition Mexico closing costs include several extra items that most people are not accustomed or aware Although the entry costs may be a little higher, the carrying costs (property taxes, maintenance fees etc) are on average much less here in Mexico than in other parts of the world

With the above three items defined and understood, put your agent to work on collecting qualified properties that match your criteria search Review the options, have your agent prepare visits to the properties, do your comparison evaluations and ….have fun

There are various more steps involving preparing the offer to purchase, the contracts, notary publics and other issues for the Mexico property purchasing process which are outlined in several of my articles To see these articles and to learn more, please click here Mexico Real Estate Purchasing Process

Thomas Lloyd www.TOPmexicorealestate.com

Mexico Real Estate investments can have great returns and strong appreciation as it is a developing country with a rapidly growing tourist infrastructure But as you invest into this Mexico Real Estate Market, it is wise to study all costs and prepare a Mexico investment strategyBelow I have put together a list of various taxes and fees due on a simple Mexico Real Estate operation As in my previous articles, I always recommend updating and verifying all quoted costs with your local Mexican Notary Public, Professional Accountants and Professional Lawyers to verify and confirm the figures and factors below mentioned

List of Mexico Closing Cost Items

Below you will find a brief introduction and description of the line itemsIf you click onto this link ARTICLE AND SPREADSHEET OF MEXICO REAL ESTATE CLOSING COSTS an excel spreadsheet is provided with formulas to allow you to drop in your actual commercial values to give you estimated closing expenses

* Mexico Commercial Value

The commercial value is the amount of the actual agreed purchase and sales priceThis amount is captured on the title or in Spanish called “escrituras” Many of the costs are calculated based on factors against this dollar amount In this article, I am assuming a Mexico Real Estate transaction of $100,000 usd

A. (Mexico Lawyer Real Estate Contract)

I recommend having a regional Mexico lawyer to counsel, and supervise your Mexico property acquisition The Mexican lawyers charge from $300 usd up to $5,000 usd for activities such as elaborating a contract, or reviewing a contract on behalf of the buyer The costs of course depend on the complexity of the property and or of the operation

A-2 (Mexico Lawyer Closing Coordination)

There are many pieces and people to the closing puzzle Coordination of the Mexico Bank trust officers, the notary public, obtaining the correct property documentation is a heavy task Such activities and services can be quoted by your Mexico legal representative.

B (Mexico Title Research)

Title research activities will generally cost from $500.00 to $1,600.00 usd depending on the region In depth searches are recommended on lots and areas outside of main municipalities and such searches will expose any existing liens, history of the property, and any other details pertinent to the property. Title research to the chain of transfers are the legal responsibility of a Notary Public, but a few buyers choose to have an additional review executed If title insurance is retained, the private title research is a mandatory task

C (Mexico Real Estate Title Insurance)

There are various private companies offering Title Insurance for Mexico Properties Title insurance generally will cost $6.00 to $9.00 per $1000.00 of the purchase price.  A few companies that offer such insurance options are: Stewart Title and First American Title Insurance. 

C-2 (Mexico Escrow )

Although a new tool for Mexico, the escrow account is slowly being introduced and utilized here in the Mexico Real Estate industry. Costs for setting up these accounts range from $500 usd up to $1,250. Again this depends on the complexity of the operation and the dollar amount to be held in Escrow.

D (National Registry of Foreign Investments Mexico)

Any non-Mexican citizen will need to register their investments with this Mexican Government Registrar. If the property being purchased is in a Trust with a Mexican bank, and the seller has a beneficial interest in the property which has been registered under the trust, the buyer will pay only the costs for Assignment of those beneficial rights, bank transfer fees and registration in the Foreign Investment Registry. A permit will be required only if so stipulated in the Seller s Trust. If not stipulated there is no charge for a permit. The charge for registration is the National Registry of Foreign Investments (RNIE) is approximately $ 380.00 dlls. and is required for all transfers of trust properties. These fees are normally included within package deals offered by the bank.

E (Permit from Mexico Minister of Foreign Affairs )

The permit to invest into a Mexico territory will incur an expense due by the buyer.

If the property is not held in a Mexico Real Estate Trust by the seller, it will be necessary to acquire a permit from the Secretary of Foreign Relations to establish such a trust. The application for the permit must indicate the proposed purpose of the property If the property is a vacant lot, the request should include a general development plan; the amount of money being invested and the time frame in which the investment will be made. The permit to establish the 50 year trust is approximately $1,300.00 dlls This expense may be included within package deals offered by some banks.

F ( Mexico Bank Trust / Fideicomiso)

Your Mexican Bank is the organization which the Mexican Government has authorized as being a Trustee for properties held in Trusts. These institutions include multi-national corporations such as CITIBANK, BANCOMER, HSBC, SCOTIA BANK, BANORTE

amongst others.

Banamex has recently been purchased by the CITIBANK group Citibank

Bancomer has recently been purchased by a financial institution from SPAIN

Bital has recently been purchased by the HSBC group

Scotia Bank has recently been established in Mexico by the Canadian Banks

Banorte is one of the last remaining Mexican institutions to exist

The average set up fee for a trust ranges from $800 up to $1,300 usd.

The normal annual trust fees are approximately $500 – $800 usd.

* please note some banks offer packages that include the set up and first year fees in one price

G (Notary Public)

A Mexican Notary Publicnotario is an attorney who has passed various rigorous examinations…….

Read this complete article by linking here ARTICLE AND SPREADSHEET OF MEXICO REAL ESTATE CLOSING COSTS

Thomas Lloyd www.TOPmexicorealestate.com