As a new buyer who wants to purchase a property in Mexico, many questions may come to your mind. Among many doubts, knowing how the purchasing process in Mexico works could be your main question.
To begin with, the purchasing process in Mexico for foreigners is similar to the United States and Canada. However, some extra steps are required. One of the most notable extra steps, are the requirements Mexico’s Secretary of Foreign Relation asks for. Also, if you’re buying in the “Restricted Zone”, you will need to purchase a property through one of two entities – bank trust or a Mexican Corporation. For more information about the legal basics in Mexico real estate, click here.
Some people could consider the purchasing process a little restrictive and difficult. Yet, with the right guidance, this process can be really easy. In order to have a great experience while buying a property in Mexico, we highly recommend a good and experienced real estate team to represent you. This buyer representative will help you and guide you through all the process.
What are the steps in the real estate purchasing process in Mexico?
- The first step is always to find a trained and experienced real estate agent.
- Do you have any clear idea of what kind of property you are looking for? If not, you can visit a website and see the listings. Once you find the right property, an offer to purchase is drawn up. Usually, when you reach this point you will need to make a deposit (about 10% of the sales price). However, sometimes the buyer can make the deposit if the seller already accepted the offer.
- In the event that the seller accepted the offer, a real estate attorney must draft a purchase agreement. We also recommend the use of an attorney through all the purchasing process.
- Once the seller accepts the offer and the buyer makes a deposit, both parties must sign a contract. Then, the closing process will begin. As a foreigner purchasing in the restricted zone, you should’ve already selected an entity (Mexican bank trust or Mexican Corporation).
- Lastly, the attorney must present all the documents to the Notary Public for incorporation into the deed of the transfer. The Notary Public will then revise all documents and make sure everything is in order. The Notary will also do the title search to make sure the property has a clear title.
Difference between purchasing pre-construction and resale
When you purchase a pre-construction property, that means that you have to wait until the product is finished, since it’s being built. On the other hand, purchasing a resale property means that it already exists and its owner is selling it.
In Mexico, the option of purchasing properties during the pre-construction phase is very common. Not only because buyers receive additional benefits such as substantial discounts, but also, they have the option to customize their home based on their preferences.
On the other hand, an existing building is ready for an immediate transfer of the physical possession and the legal possession of the new owner.
How do an escrow account function in these processes?
An escrow account allows the money to be kept safely while the closing papers are done. Realtors highly recommend to have an escrow account. Besides this being a firm commitment on the part of the buyer, it’s also a safely factor for the seller.
As for a resale property, once an offer has reached an agreement by both parties, an earnest money deposit is placed in escrow. The escrow company will hold the money until the closing. It will disburse these funds according to a letter of disbursement signed by the buyer and the seller.
In the case of pre-construction properties, many developers do not use escrow services since they receive the deposit and following payments directly.
As this information may result very useful, we recommend to contact one of our professionally trained agents. At Top Mexico Real Estate, we can guide you through all the purchasing process. We’ll be happy to answer all your questions and educate you.
Get in touch if you are interested in finding the perfect home and purchase safely in Mexico. Remember, at Top Mexico Real Estate… We make it happen!