{"id":17136,"date":"2018-12-21T16:53:46","date_gmt":"2018-12-21T21:53:46","guid":{"rendered":"https:\/\/www.topmexicorealestate.com\/blog\/?p=17136"},"modified":"2018-12-21T16:54:49","modified_gmt":"2018-12-21T21:54:49","slug":"closing-costs-mexico-vs-usa","status":"publish","type":"post","link":"https:\/\/www.topmexicorealestate.com\/blog\/2018\/12\/closing-costs-mexico-vs-usa\/","title":{"rendered":"How do Closing Costs Differ Between USA and Mexico?"},"content":{"rendered":"

You spend the time finding your perfect home or investment property<\/a>. You settle on a purchase price, sign a sales agreement and then wait to close. The closing process is similar in Mexico as in the United States. The difference is that in the US, the buyer and seller use a Title Company to close the deal. In Mexico, the two parties sign their closing paperwork in front of a State or Federal-approved Notary. When the day comes to sign for your new real estate purchase, the buyer will most likely have to bring additional funds to cover various closing costs.<\/p>\n

Closing Costs Differences<\/h3>\n

\"Closing<\/p>\n

Depending on taxes, certificates and other miscellaneous expenses, closing costs will vary between the USA and Mexico. The closing procedure between the two countries are very similar including prepays, third-party charges, taxes, and closing fees collected by the Title Company (USA) or Notary (Mexico). Generally speaking, in the United States the purchaser can expect to pay closing cost of around 3 to 3.5 percent of the property\u00e2\u20ac\u2122s selling price. In Mexico, the purchaser can expect to pay 6 and up to 8 percent depending on taxes, state fees and resident status.<\/p>\n

Comparison of Closing Costs Between Mexico and USA<\/h3>\n

Here is a side-by-side comparison of both the USA and Mexico closing fees. The closing itinerary could deviate slightly pending on the type of property, unanticipated property issues, a need for special permits\/certificates or variances according to state laws. The following fees are based on a cash sale.<\/p>\n\n\n\n\n\n\n\n\n\n
USA Closing Costs<\/strong><\/td>\nMexico Closing Costs<\/strong><\/td>\n<\/tr>\n
Attorney Fee<\/strong> \u00e2\u20ac\u201c Average $600 USD, pending amount and property type.<\/td>\nTrust or Bank Fee<\/strong><\/a> – $500-$600 USD. This applies to the selling non-resident buyers.<\/td>\n<\/tr>\n
Title Company<\/strong> \u00e2\u20ac\u201c closes the sale. The basic fee is $200, plus $2 per every $1,000 of the selling price.<\/td>\nNotary Fee<\/strong> \u00e2\u20ac\u201c closes the sale. The fee depends on the selling price (.95% to .35%).<\/td>\n<\/tr>\n
Recording Fees<\/strong> \u00e2\u20ac\u201c this fee is charged for recording the purchase with the city and county where the property resides \u00e2\u20ac\u201c included in closing fee.<\/td>\nPublic Registry Rights<\/strong> \u00e2\u20ac\u201c after the closing, the property is registered with the public records office.<\/td>\n<\/tr>\n
Title Insurance<\/strong> \u00e2\u20ac\u201c this is highly advised with any purchase. Fees do vary.<\/td>\nTitle Insurance<\/strong> \u00e2\u20ac\u201c this is optional in Mexico, but highly advised. Fees vary.<\/td>\n<\/tr>\n
Transfer Fees<\/strong> \u00e2\u20ac\u201c this is a tax charged and is part of the Title Company\u00e2\u20ac\u2122s closing fee.<\/td>\nProperty Acquisition Tax <\/strong>\u00e2\u20ac\u201c similar to the USA transfer fee, it is 2% of the selling price.<\/td>\n<\/tr>\n
Escrow Account<\/strong> \u00e2\u20ac\u201c in the USA, there is no charge to obtain an escrow account.<\/td>\nEscrow Account<\/strong> \u00e2\u20ac\u201c Mexico does charge for using an escrow account, anywhere between $550 and $750 USD.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The list above almost mirrors the closing process between the USA and Mexico. It appears that Mexico\u00e2\u20ac\u2122s fees are somewhat higher. There are advantages to the upfront costs Mexico charges that in the long run, will prove beneficial to the new property owner. The miscellaneous (other) fees to follow are a price you have to pay to own a foreign property. However, in the following summary there will be an outline that will point out the difference in cost of living between the two countries.<\/p>\n

Other Mexico Closing Fees<\/h3>\n

<\/h5>\n
Foreign Affair Permit<\/h5>\n

A permit that the Notary or Bank Trustee processes and can cost approximately $1,100 USD.<\/p>\n

National Foreign Investment Registration<\/h5>\n

This is the responsibility of the property trustee and the fee can range from $350 to $800.<\/p>\n

No Liens Certificate<\/strong><\/h5>\n

This is the responsibility of the Notary to make sure there are no past or current property tax(es), water or maintenance fees or bills due. This charge is usually no more than a $100 USD.<\/p>\n

The above charges and fees vary from state to state in Mexico. Always ask your agent to provide a Good Faith Estimate and go over it line by line with them. There are a few suggestions that could eliminate several of the permits and costs associated with the closing process. One cost saving would be if you have full resident or citizenship status. A few of the other Mexico closing fees could be waived if your residency paperwork is in order and up-to-date. Another saving is if the buyer already owns a property and has a trust already set up in Mexico and in good status.<\/p>\n

In Summary<\/strong><\/h3>\n

\"Beach<\/p>\n

Using a purchase price of $175,000 USD for comparison, the average closing cost for a cash sale in the US is approximately 3.5% or $6,250 USD. Mexico with the same purchase amount and not having any resident status or existing trust would be 6 to 8% or approximately $11,000 to $12,000 plus or less USD. Don\u00e2\u20ac\u2122t let Mexico\u00e2\u20ac\u2122s closing cost discourage you from purchasing your ideal property in a foreign country. There are many immediate and long-term advantages that will contribute to your cost-of-living when selecting to own property in Mexico. They are:<\/p>\n