The process for non-Mexicans buying Mexico real estate is similar to the United States and Canada, yet several extra steps are required. The most notable extra steps arise from the requirements of registering and obtaining permission from Mexico’s Secretary of Foreign Relations, and if you are buying in the “Restricted Zone,” (i.e. the area within 100 km of any border and 50 km of any coastline,) the additional steps of establishing a bank trust or Mexican Corporation.
Related: Owning property in Mexico, mortgages available for foreigners!
Local, state, and federal laws outline real estate transactions and property rights in Mexico; however, the protection for the parties is not as detailed and as regulated as the property acquisition process Mexico's northern neighbors. While many people may see this as a possible deterrent, this also allows for opportunities, so long as you have a good on-site, experienced real estate team representing and protecting your interests.
The most important steps when purchasing a property in Mexico are:
1) IDENTIFYING YOUR AREA OF INTEREST
Mexico has many excellent real estate areas – beachfront, lakefront, old cities, charming small towns, hot jungle, sunny desert, rolling hills and much more. There is also a variety of expat communities, some really large, some only a handful of people. Browse for one that catches your interest and meets your lifestyle needs. The internet is great for this, and so is vacationing in these areas.
Related: Buying on a Budget: Location Factors, Choosing the Area
2) SELECTING AN EXPERIENCED REAL ESTATE AGENT
This is possibly the most important step. The right agent will use their knowledge and experience to ensure you find a good property that meets your needs, and, just as importantly ensure that the transaction is carried out safely. Ask for credentials and references.
3) RESEARCH & STUDY THE MEXICAN PROCEDURES AND LAW OF REAL ESTATE TRANSACTIONS
There are online resources such as e-books, blogs and Q&A. The agent you selected should probably have a website with some of this. While you will be relying heavily on your agent, it’s also good to get a bit of a background for yourself.
4) SEARCH FOR PROPERTIES ONLINE AND HAVE YOUR AGENT EXERCISE A PRELIMINARY QUALIFICATION OF THE CHOICES
This preliminary search shouldn’t be seen as necessarily identifying your final property (although it most certainly could be one you find online!) This search simply gives your agent an idea of what it is that appeals to you. After you present your agent with the ones you find online, ask your agent for similar recommendations.
5) TOUR PROPERTIES AND MAKE PHYSICAL VISITS - EVALUATE PROS AND CONS
While you’re viewing properties, do not hesitate to ask your agent about pros and cons and anything you are not certain about. You should feel comfortable that your agent is presenting the property to you fairly and informing you with all known details. You should also take enough time to make a calm and clear choice. While you don’t want to let the big opportunity slip away, it’s probably more important not to rush in before you’ve considered all aspects.
Related: Live It, Compare It & Buy It Tour
6) DECIDE WHICH ENTITY WILL HOLD THE PROPERTY ON YOUR BEHALF - I.E. A BANK TRUST OR A MEXICAN CORPORATION
In Mexico foreigners may not hold direct title to a property in coastal or border areas and must establish a trust through a Mexican bank for the purchase. It normally takes 3-4 weeks for the permit to be issued once all required documentation is received. When the property is being used for business purposes, a Bank Trust can be used. (This is only necessary in the “Restricted Zone” – especially in the case of Mexico beachfront for sale; see above.)
7) CHOOSE A PROPERTY AND MAKE THE OFFER
After finding just the right property, a purchase offer is drawn up. At this time a good faith deposit is made (usually about 10% of the sales price). Sometimes the deposit is made when the offer is accepted. Once an offer is accepted, the deposit is made, the contract is signed, and the closing process will begin.
8) PREPARE THE PROMISSORY CONTRACT OR PURCHASE SALES CONTRACT
In some cases, you will need to use a Promissory contract as an intermediary step before moving to the final Purchase Sales contract; however, especially if you are not buying in the Restricted Zone, and the closing can be completed quickly (usually about 14 days, as a rule of thumb) only the Purchase Sales contract may be necessary. Your agent will help you determine which contracts are necessary.
9) INSPECTION OF THE LEGAL DOCUMENTATION AND OBTAINING PERMITS
Buyers may contract an attorney to represent them, but this is not always necessary and is an added expense, since Notaries carry out all inspections. The attorneys at the Notary office can assist in all the aspects of the closing.
10) FORMALIZATION OF THE CONVEYANCE AND FILING IN PUBLIC REGISTRY
Here in Mexico, real estate closings are handled by Notaries, which are government appointed attorneys and they have the authority to handle the complete closing transaction. Before closing, the Notary will revise all documents to make sure everything is in order, as well as do the title search to make sure the property has clear title.
TOPMexicoRealEstate.com; Mexico's Leading Network of Specialists for Finding and Purchasing Mexican Properties Safely
Thomas Lloyd, founder and president of TOPMexicoRealestate.com, is originally from Indiana, and a is a graduate of Purdue University in the Krannert School of Management. He holds a degree in management with a speciality in finances. Lloyd has several diplomas and certifications in Mexico Real Estate topics and is one of only a few professionals to hold Mexico's new degree in real estate. This degree is accompanied by a Professional Identification Number, "cedula profesional," which is issued for trained professionals such as those in the medical field, or in law. He has over 15 years of direct experience in Mexico's business culture. He can be reached at firstname.lastname@example.org.