• About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe
No Result
View All Result
Live and Invest Overseas
FREE REPORT
BEST PLACES TO RETIRE
*No spam: We will NEVER give your email address to anyone else.
  • HOME
  • COUNTRIES
    • Top Destinations
      • Panama
      • Portugal
      • Colombia
      • Northern Cyprus
      • Belize
      • Spain
      • Mexico
      • France
      • Indonesia
      • Vietnam
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
Live and Invest Overseas
  • HOME
  • COUNTRIES
    • Top Destinations
      • Panama
      • Portugal
      • Colombia
      • Northern Cyprus
      • Belize
      • Spain
      • Mexico
      • France
      • Indonesia
      • Vietnam
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
No Result
View All Result
Live and Invest Overseas
No Result
View All Result
Home Countries Mexico

Buying Property In Mexico: Step-By-Step Guide For Expats

The Property Purchase Process In Mexico

Lee Harrison by Lee Harrison
Apr 20, 2021
in Investing, Mexico, Real Estate
0 0
0
Beautiful view of Tulum beach during sunrise in Mexico

Alamy/YuziS

7.5k
SHARES
106.3k
VIEWS
Share on FacebookShare on Twitter

This is my sixth year in Mexico, and I’ve never seen real estate action like I’m seeing now.

And the number of Live and Invest Overseas readers who’ve chosen to live or buy property in Mexico is unprecedented in my experience. I don’t know if it’s due to the pandemic, politics, or just an idea that’s catching on… but more people are taking action than ever before.

With so many people buying in Mexico, it’s time to take an updated look at some of the quirks and pitfalls of buying here.

Mexico is very familiar, compared to most foreign markets… and that can be a problem. That familiar feel can lull us into believing that we have the processes and protections that we enjoy in our home countries.

And that’s not true.

I’ll divide this discussion into two parts. First, we’ll look at a few general areas to be aware of before buying in Mexico. Then we’ll look at the buying process, along with an idea of the costs involved.

Don’t Buy In Mexico Without Being Aware Of These Issues

Here are a few things you should know about buying in Mexico… ways in which Mexico is different from what you might expect.

#1. Prime, Oceanfront Ejido Land… Why It’s Mexico’s Best Bargain

Without the issue of ejido land (pronounced eh-HEE-doh) there wouldn’t be anything exciting to talk about when it comes to buying Mexican real estate.

Ejido land is the source of almost all the stories you’ve heard about confiscation of property from foreigners in Mexico. Ejido land can be a terrific bargain, because after buying it, it’s not really yours.

Ejido land is communal agricultural land, which was granted to a community… often an indigenous community. Much of this land, while not worth that much at the time, is now prime, sought-after beachfront property.

In order to buy some of it, you would need the approval of 100% of the community members, separation of your parcel from the ejido, and conversion of that parcel to a freehold title. (And that’s over-simplified… simply identifying the community members and their descendants who should have a vote can be hard.)

Get Your Free Report Today!
 

​Learn more about ​​​​​this ​and other countries in our free, daily Overseas Opportunity Letter​​​​​​​​​. Simply enter your email address below and we’ll send you our FREE REPORT – ​​The 10 Best Places To Retire In 2023
 


Converting ejido land to private ownership is a complicated and difficult process… which is why so many have ignored doing it legally, resorting instead to bribing officials, falsifying records, or just hoping no one will say anything down the road.

There are, however, reputable legal firms in Mexico who specialize in converting ejido land into land that can be sold via a freehold title. If you feel you’ve got an irresistible opportunity to buy legally converted ejido land, I’d still personally recommend the following:

  • Verify that the property is recorded in the property registry as a freehold title before your purchase (don’t convert it concurrently with your purchase).
  • Have an independent, third-party attorney review the title’s history and assess the legality of the ejido land’s conversion to freehold title.
  • Purchase title insurance to guard against future legal claims, which may be valid or frivolous.

Both I and my colleagues here at Live and Invest Overseas think it’s best to avoid ejido land altogether.

#2. No Restrictions On Foreign Ownership… Almost

Generally speaking, there are no restrictions on the ownership of residential property in Mexico, and you can hold the title in your own name. You can choose to hold it in a trust—for asset protection or estate planning purposes—but it’s not required.

If the property is near the coast or an international border however, special rules will apply. See the following paragraph.

#3. Special Rules Apply When Buying Near The Coast Or Land Border

Mexico has a restricted zone—called the Zona Restringida—that occupies a band within 50 kilometers (31 miles) of the coast or 100 kilometers of an international land border. Since the early 20th century, non-citizens have not been able to hold property in their own name within this zone.

But in order to encourage foreign investment, the government created a workaround in 1973, formalized in its current version in 1993. In short, it authorized the use of a trust to purchase property within the restricted-zone. This trust is called a fideicomiso (fee-dey-com-EES-oh) and it’s similar to a Land Trust in the United States.

In U.S. trust parlance, you (the property buyer) are the Grantor of the trust, and also the Beneficiary… so you fully control the purchase, sale, and management of the property. A bank of your choosing acts as the Trustee.

At first, I resisted the idea of having to use a fideicomiso. I actually toyed with the idea of creating a corporation—with all its overhead and reporting requirements—just to get around it. But that was counterproductive.

Instead, I decided to appreciate the benefits of having my property in a trust. It gives me a level of asset protection, and more importantly, allows me to do estate planning—using beneficiaries and contingent beneficiaries—without having to probate a Mexican will or follow normal probate protocols.

Fideicomisos must be renewed after 50 years.

#4. The Notary: Not Like The States… Not Like France… Not Like Ecuador…

The role of the notary in Mexico is different from their role in most of Latin America, Europe, or the United States. The notary is appointed by the state governor and must be an attorney with at least five years of experience.

As a buyer in Mexico, the notary is your representative in the process. He is not an impartial third party, and does not represent the seller. Consequently, there is usually no reason hire a second attorney to represent you in a straightforward property sale. The role of notaries in Mexico are most like the roles of escribanos in Uruguay and Argentina.

You may, however, need an additional attorney for a non-standard sale. For example, if you’re forming a corporation or starting a business concurrently with the purchase.

The notary will perform a title search, prepare all the paperwork, process the real estate transaction, record the new title with the municipality, and collect the taxes and fees.

Be sure to hire a notary who is fluent in English, unless you’re a fluent Spanish-speaker. He will serve as your translator, and explain what all those Spanish-language documents are saying.

Don’t have your real estate agent serve as your only translator at the notary office.

And don’t use a notary who does not speak your language.

#5. Great! An English Sales Contract (Which May Not Be Valid)

The official language in Mexico is Spanish, and all official documents are in Spanish… including your sales contract and closing documents.

But for simplicity’s sake, most good realtors will give you an English version of the sales agreement. This is a great tool for making sure that you and the seller understand the terms of the deal, such as sales price, included items, or any special conditions or contingencies.

Keep in mind however, that when there’s a conflict between the English version and the Spanish documents that you signed, the Spanish (official) version will govern.

Make sure that any changes made by you and the seller on the English version make it through to the Spanish version at the end of negotiations. At your discretion, you can have some of the official documents translated by a third party.

Like What You See?

Learn where and how you can escape the retirement-tromping economy at home and live like royalty on a modest budget… invest for profits overseas ahead of the crowds… and secure your dream lifestyle in the world’s best destinations.

We take your privacy very seriously. We will not share your email address with anyone else, period.

Overseas Opportunity Letter Unlocks Intel Like This And More…

Sign up for free and get our latest report: 10 Things To Know Before Buying Real Estate Overseas.

The Purchase Process, Step By Step

Couple receiving new apartment key.
iStock/Domepitipat

Keep in mind that most of the processes described here will be done by the notary, working with your agent. All you really need to do yourself is sign the documents and write a check for the fees.

#1. Make An Offer And Come To Terms On A Price

This is usually done verbally, either with the seller or through your real estate agent.

#2. Sign The Sales Contract

This can be called a promesa de compraventa, convenio de compraventa, or contrato de compraventa, depending on local custom. Here is where you document the price and specify the terms and conditions of the sale, including any special payment arrangements and penalties for default.

#3. Pay A Deposit

Normally, this will be 5% to 10% of the sales price.

#4. Initiate Creation Of The Fideicomiso If The Property Is Within The Restricted Zone

Alternatively, you can transfer the previous owner’s fideicomiso into your name. This can save you time and money, but a transfer does not reset the 50-year clock… the fideicomiso will need to be renewed 50 years from the time it was originally created.

#5. Obtain Permission To Complete The Purchase From The Foreign Secretary’s Office

You will be asked to sign a statement indicating that you will not seek foreign legal jurisdiction in dealings with your property transaction… in other words, Mexican property law will govern.

#6. Conduct The Title Review And Get The Official Valuation (Called Avalúo)

Once again, the notary will perform or arrange these activities. The valuation will be used to establish the home’s value for tax purposes… so the age-old practice of underreporting the sales price will not work here.

#7. Sign The Escritura

Sign the escritura at the notary office, and make the closing payment. When signed and recorded, this escritura will be your title to the property.

#8. Pay Taxes, Collect Fees, And Initiate The Property Registration

All of this is done by the notary. You’ll just need to hand over the money.

#9. Final Registration

Final registration in the property registry will be completed and recorded within three months.

#10. Closing Costs

Closing costs should be about 5% of the purchase price. This includes a 1.5% notary fee, a 2% transfer tax, and a few other odds and ends, including the fideicomiso setup fees. This will be higher if you get a mortgage.

My closing costs came to 5.09% of the purchase price, which included the fideicomiso setup fees and two years’ advance payment of fideicomiso maintenance fees. My annual fideicomiso maintenance fee is MXN 4,820 for 2021, which is around US$240 at today’s exchange rates.

The Bottom Line When Buying In Mexico

Alamos, Mexico.
Alamy/jejim120

Your experience buying property in Mexico will most likely be a good one. There are hundreds of excellent realty companies, and more genuinely-certified REALTOR® agents than I’ve seen anywhere in Latin America.

But there are also some fly-by-night operators and crooks. Most often, it’s a “guy who knows a guy” with a place for sale, or a tour operator, taxi driver, or rental agent who can’t resist the idea of a commission.

  • Make sure you buy from a reputable real estate company, who employs real agents, and follows the rules.
  • When in doubt, don’t hesitate to call a time-out and ask questions until you’re satisfied.
  • Don’t be afraid to clarify Spanish conversations you’re hearing, or terms that are new to you.

In the end, the enjoyment you’ll get from your new property in Mexico will be worth the effort.

Lee Harrison

Tags: buying property in mexicoejido land in mexicoinvesting in mexican propertymexican fideicomisomexico real estateproperty purchase process in mexicoreal estate purchase process in mexico
Share3076Tweet1860
Lee Harrison

Lee Harrison

Lee has been living overseas for nearly two decades, making his first purchase abroad in the colonial city of Cuenca, Ecuador. After that first investment, he traveled extensively across Latin America and Europe looking for the best property deals possible. Lee’s network of property insiders from those travels, along with his understanding of local cultures and languages, has helped him develop insight into local property markets that only the locals usually possess.

Related Posts

Two numismatists examine collection of coin
Investing

Top Alternative Investments For Diversification

by Lief Simon
March 27, 2023
0

One of my New Year's resolutions was to further diversify my asset portfolio. On the real estate side, I try...

Read more
A farmhouse in Croatia

4 Lessons We Learned Renovating Rental Property Overseas

March 26, 2023
Sunrise in Holbox. Mexico

Isla Holbox, Mexico | Everything You Need To Know 2023

February 22, 2023
Beautiful view of the main street of Larnaca and Phinikoudes beach in Cyprus

Lanarca, Cyprus: The Next First World Lifestyle And Investment Option

February 5, 2023
Beach of Protaras, Ayia Napa, Cyprus

Why An Investment In Cyprus Is My New Favorite Plan B

January 27, 2023
Colorful street in Granada, Nicaragua

The World’s Most Affordable Real Estate Buys In 2023

January 12, 2023
Aguilas Poniente beach Murcia in Spain 

The Best Things To Invest In This Year

January 9, 2023

Start Your New Life Today, Overseas ...

A world full of fun, adventure, and profit awaits! Sign up for our free daily e-letter, Overseas Opportunity Letter, and we'll send you a FREE report on the 10 Best Places To Retire In Style Overseas Today.

LIOS Resources


  • New To LIOS
  • Ask An Expert
  • Media Center
  • Contact Us
  • FAQs

Quick Links


  • Best Places To Live
  • Best Places To Retire
  • Finding A Job Overseas
  • Real Estate

Sign up for our free daily e-letter, Overseas Opportunity Letter, and get your FREE report: The 10 Best Places To Retire Overseas In 2023

  • About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe

© 2008-2023 - Live and Invest Overseas - All Rights Reserved.

No Result
View All Result
  • Home
  • Countries
  • Budgets
  • Archives
  • News
  • Events
  • Bookstore
  • Newsletters
  • About Us
  • Members Area
  • Contact Us

© 2008-2023 - Live and Invest Overseas - All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

RETIRE OVERSEAS AND

LIVE LIKE ROYALTY

Sign up for FREE and learn how to live the good life on a modest budget, find bargain property, and more. Plus, check out our free report on the 10 BEST PLACES TO RETIRE.

Best places to retire in 2023 thumbnail

Get Your Free Real Estate Report Now

Sign up for our free daily e-letter, Overseas Opportunity Letter, and we'll send you our latest real estate report: The 10 Things To Know Before Buying Real Estate Overseas.