Buying In Mexico FAQs
The Los Cabos Real Estate market offers countless investment opportunities whether you are a developer, retiree or luxury real estate investor.
The slowdown in the global and US financial markets in past years have had a direct impact on coastal real estate in Mexico. The Los Cabos real estate industry experienced a general slowdown in real estate sales and substantial price adjustments for a short time. Fortunately, over the last few years we have seen an increase in real estate sales and a return of the luxury real estate market.
There are still many real estate investments available at exceptional prices however this will not last forever. Many wise local and foreign retirees and investors are snapping up the available properties. Let’s face it; on the West coast, it is hard to find such incredibly well-priced properties in such a naturally beautiful location with friendly people and magnificent weather.
In addition to protect your investment, Oceanside Real Estate works with several proffessional property management companies to provide you with peace of mind.
In order to assist you, we have designed a list of the most commonly asked questions by buyers when purchasing in Los Cabos.
The Trustee is responsible for holding the property in trust for the purchaser who is then the beneficiary (Fideicomisario) of the Trust. In conjunction with the Trustee, the purchaser has the ability to rent, sell or transfer the rights to the property.
The Trustee`s (Fiduciario) function is purely an administrative one. The bank Trustee will only act upon written instructions from the Owner/ beneficiary (Fideicomisario) of the property.
If a Mexican national is selling a property to a foreigner, then normally there are approximately four people directly involved in the transaction. The parties would be the purchaser, the seller, the public notary and the bank.
If a purchaser is acquiring a property from another foreigner, in the coastal region of Mexico, then there would be approximately 5 people involved; the public notary, the seller, the buyer, the seller’s bank and the purchaser’s bank, if the purchaser is establishing a new bank trust with a different bank.
NOTE: It is important to note that the real estate brokerage, or agent, plays a very important role in the real estate purchasing process in Mexico.
A good agent, or broker, essentially orchestrates the whole process and is the main supplier and communicator of all the required information to all the parties involved in each transaction.
This is normally a lifetime appointment.
The purchaser generally chooses the Public Notary since the purchaser pays the closing cost fees.
The Notary has an obligation to be neutral to both purchasers and sellers, even though the purchaser generally pays the Notary`s fees.
The Notaries function is to draw up the title. This involves checking the title chain (history) of the property that is being acquired.
The Notary also makes sure that there are no outstanding liens or encumbrances and that the property is current in the payment of the corresponding property taxes and maintenance fees, if they apply.
The Notary will also make sure that all the official requirements; evaluations, tax appraisals, non-lien certificate and other documents, are in place prior to the signing of the title.
On the designated closing date, buyer, seller and bank Trustee must appear before the Notary to sign the deed, which will then be officially certified by the Public Notary.
Once the deed has been signed and certified by the Notary, it will be sent to the Public Registry’s office for its inscription.
Once the deed is registered, it is returned to the Notary’s office and the purchaser will be able to pick up the registered title.
Once the title and all the paperwork has been completed by the Public Notary you will sign the deed in the presence of the Notary and the other parties involved.
On signing the deed, the net funds, after taxes and expenses, will then be wired to your specific account.
This is obviously a very simple explanation. There is a lot of work involved in completing a transaction but most of this is usually coordinated by your real estate professional.
Your real estate professional will guide you through each step of the process.
The Seller is responsible for paying the Mexican Capital gains tax (Impuesto Sobre la Renta), if it applies, as well as the real estate fees. The seller also needs to be up to date with all his trust bank fees, property taxes and other payments related to the property, up to and including, the closing date.
Basically, you can expect to pay approximately 4% to 6% of the value of the property in closing cost fees. Remember, these closing cost fees are over and above the actual purchase price.
To avoid surprises, make sure that your real estate expert provides you with an estimate of the approximate closing costs for you prior to making an offer.
Many independent agents assist aspiring residents with the procedure that may involve a few trips to the local immigration office before getting your desired resident card.
For up-to-date information and regulations, visit your local Mexican consulate or the official National Immigration Institute (INM) website where you will find the requirements to apply for or upgrade your immigration status.
There are several types of immigration statuses and associated visas for foreign visitors to Mexico:
When you arrive in Mexico by land or air, the customs officer will stamp your passport with a 180-day Tourist Visa. This visa allows you to vacation in the country but does not give you permission to perform any profitable activities during your stay.
Temporary Resident Visa
If you wish to live here full-time, the next step on the immigration ladder is the Temporary Resident Visa, which allows you to stay for a whole year before applying for renewal.
Property owners are advised to obtain this Temporary Visa, which does not place restrictions on foreign travel. A work permit can be added as part of the Temporary Visa allowances, giving you the legal right to work.
Permanent Resident Visa
After four years of successfully renewing your Temporary Resident status, you may apply for a Permanent Resident Visa. The Permanent Visa gives you the total freedom to live and work in Mexico and enjoy every right Mexican citizen do except for the right to participate in elections. To keep your resident status, you must inform the INM of any address and work changes within 90-days of their occurrence.