Beaches, sand, sun, safety, tranquility and delicious Mexican food… doesn’t it sound like paradise? Yes! many EXPATs and foreigners dream of buying a house in México, either for retirement, vacations or simply as a smart investment.
Whatever reason you pick, there’s always something you must take into consideration when you are not the legal citizen of a country you’re buying a property in, such as what’s the buying process and its implications. Sadly, for many years the idea of buying a property in Mexico has been tamed by rumors that make it seem like a dangerous market, prone to fraud and money loss.
But actually, investing in Real Estate in Mexico is incredibly safe. Do you want to know why? Keep reading!
There’s nothing to worry about
Is true that Mexican laws can be complex, but the buying process for foreigners who wish to invest in Real Estate within the country is quite direct and simple. It also offers many legal ways to acquire a property. If you receive the correct legal advisory from experienced Real Estate professionals and a licensed attorney, you won’t face any problem.
For starters, here we offer you a step-by-step guide to follow if you want a better insight into this process, so you don’t miss the chance to live peacefully in beautiful Mexico.
ESSENTIAL: Hire a lawyer!
Doesn’t matter what use you’ll give to your property, you’ll have to hire a trustworthy lawyer. They can be foreigner, even from your same city, but the better choice is to hire a Mexican professional specialized in Real Estate. You can also ask for recommendations among friends who already bought properties in Mexico. This lawyer will act as the main agent in this process.
Their job is to check your legal status, prepare the contracts and create a trust (fideicomiso) to complete the transaction.
The buying process occurs in the following way:
1. Initial offer and acceptance
Even though the Mexican law does recognize verbal agreements, both the offer and acceptance of a contract must be written and signed. This ensures there’s no confusion with the terms and conditions, and guarantees there’s someone who is validating legally the treat.
The offer must be presented in a «Buy’s offer» format (translated to «oferta de compra» in Spanish, similar to an «agreement to purchase»). This document details the primary terms of the sale:
- Payment plans.
- Details about deposits.
- Deadline for the seller to accept the offer.
As soon as the seller agrees to these terms, you’ll have to transfer money either trough your Real Estate Agent or through the buyer’s lawyer. Remember to keep the evidence of your payment.
In the written offer, you must include a clause that guarantees back the deposit if the final sales agreement does not occur within a determined period of time.
2. Promise contract
Once the deposit is made, a promise contract will be written. This will link the buyer and seller for a period of time, so they can successfully execute the sales contract.
This contract «seals» the basic terms of the offer, while you and the seller finish the paperwork needed to complete the transaction of the sales contract. This process can take up some time, so there’s no need to rush or worry.
According to Mexican laws, both parts are bound to the promise contract’s terms. Following the terms and conditions of this contract, neither of the parts should be able to retract from the transaction without paying penalty fees.
3. Trust application
Once the promise contract is signed, the seller must call their bank (the one they used to configure the trust or «fideicomiso») to initiate the trust application. Then, a lawyer must request a «fideicomiso» permit to the Secretaría de Relaciones Exteriores.
During this time, your lawyer must verify the legal status of the property, including:
- The scriptures revision
- Confirm the seller has all legal rights to transfer the property’s ownership.
- Review the terms and conditions of the sales contract, as well as the property (either if it’s a completed product, a condo, or a patch of land)
The lawyer will need to request the seller’s documentation as well, such as the non-encumbrance certificate and non-fiscal debt certificate. It sounds like a lot of paperwork but believe us, it’s simple, and with the guide of an experienced lawyer, everything will go smooth.
What documentation do you need to buy a property in Mexico?
The good news is the documentation required by the buyer is minimum, you only need:
- 1 copy of your passport
- Proof of address (energy or water receipts, any legal document that shows your current address.)
These documents are brought to a lawyer to be kept in the public registry, as your reference.
As you can see, Mexico offers a well-structured process to acquire a property if you’re a foreigner. There are many cases of success that prove investing in the Mexican Real Estate market is safe.
If you’re interested in enjoying all the benefits of Mexico, as a resident or as a Real Estate investor, contact us, we are waiting for you!