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FAQ Mexico Real Estate Closing Process

FAQ: MAKING THE CLOSINGfaq icon

Property documentation

48. What are the steps/documents needed for a closing?

The buyer must make sure that:

- the seller holds valid, unencumbered title to the real estate;

- there are no taxes due on, or liens attached to, the property;

- the terms of the sale are evidenced by a written purchase contract or promissory contract if money is paid in advance of closing;

- the Fideicomiso agreement correctly describes the terms negotiated with the seller and the bank;

- the buyer obtains a certificate of no liens; certificate of no amounts due on water,

- the buyer obtains an appraisal of the real estate;

- the SRE issues a permit for the Fideicomiso;

- the Fideicomiso Agreement and the escritura/deed is registered in the Public Registry of Property.

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49. Who should be responsible in collecting these documents?

If you have legal counsel, they will coordinate the collection of these documents, otherwise the Notary Public will administer.

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50. How do I know that all the documents are legally correct?

The Notary Public is educated and well prepared to review and ensure proper and authentic documentation.

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51. What happens if the owner doesn't have all the documents?

If any of these documents are incomplete, the Notary Public will be unable to proceed on registering the title transfer.

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52. What's the appraised value of a property?

An estimate of the monetary value of a property on the open market; an estimate based on a property's type and condition. Appraisal is used to establish minimums to pay property taxes.

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53. What's the assessed value of a property?

Tax authorities are required to determine the value of properties in their jurisdictions once a year. The assessed value is not required to reflect the market value, nor is it required to reflect the appraised value.

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Private title search

54. Do I need title insurance?

Obtaining Title insurance is recommended in some cases when purchasing in Mexico. Title insurance will help protect your investment should the property you buy subsequently turn out to have liens. Land near, or in areas of Ejido has a higher probability of having such irregular status. Most large cities, and those under development have the majority of their lands privatized, and such irregular title risks decrease tremendously. Title Insurance may run around $5 up to $5.50 per every $1,000 USD of the property's value.

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55. What is a private title search?

Private title search can be realized in Mexico using private organizations. You should note that one of the main responsibilities of the Public Notary office is to perform such a search and warrants that the property is free from liens. 10 years is the length of time a normal Notary will research while private organizations boast a further and more thorough research. What is interesting for the State of Quintana Roo, is that this state is the newest state of Mexico. A birth of a little over 40 years, this fact allows for quicker and cleaner researches to be realized by Notaries and private organizations. A case by case analysis of the particular property should be conducted to address whether private title search be realized.

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56. Who can provide this service?

Please ask your agent about the companies that offer such services.

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57. What is the cost of this service?

Please see the article Closing costs.

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58. Should I need to tell the seller that I'm doing a private title search?

It might be recommended that the seller be advised that you plan to realize a private title search. This private search usually requires an extra time period for the closing process. Therefore, such time frame expansion should be communicated to all parties.

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