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Buying a property in Mexico :
A four-step process

Step 1 – Initial offer, negotiation and acceptance

It all starts with an initial offer on the property you have chosen. The initial offer is very similar to a 'promise to purchase' agreement, a term heard more often in North American real estate transactions. The initial offer, or promise to purchase, informs the seller of your intention to purchase a property.

A buyer's most important ally at this stage is their real estate representative. An experienced broker will negotiate with the seller on your behalf, ensure all agreements are in writing, and include these additions to an amended initial offer.


Recording all details of the initial offer helps avoid any misunderstandings between the buyer and seller about the terms and conditions of the sale. Relevant details often include:

-The price of the unit
-Payment plan
-Deposit conditions
-Deadline for acceptance of the offer by the seller
-All additional agreements such as those regarding parking spaces, ...

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Step 2 – The order contract

Following acceptance of the initial offer by the seller (who is often a representative of the construction company, known as the prime broker), the next step is the contract of order, or "contrato de promise of compraventa”.



This document defines a period during which the buyer and seller agree to execute the purchase contract. It is not a final document, but it is legally binding on both parties. The order contract describes all the details of the transaction once the negotiations are completed. Think of it as the paper version of step 1 above.

Your lawyer, an important ally

While the real estate broker works directly with the seller on negotiations and has the greatest expertise in real estate, your lawyer will assure you that every detail included in the sale is free from legal errors, that the clauses are enforceable and will put you in a strong position to finalize the transaction.


Having a lawyer on site is essential from this stage onwards. HOME LUXURY MEXICO will be able to support you and advise you on serious Notarias (lawyer and notary firms).

Step 3 – Creation of the trust (Fideicomiso)

Two steps must be followed:

-Apply for and obtain the appropriate permit from the Federal Ministry of Foreign Affairs, register in the public property register and the national register of foreign investments
-Creation of the trust (Fideicomiso)

These steps will be carried out with the support of HOME LUXURY MEXICO and your appointed lawyer.

 

Once the initial offer is established, the responsibility of the notario publico is to ensure that the title to the property is free from liens, encumbrances or debts of any kind. The notario publico is also responsible for ensuring that the property is registered. He will calculate the property taxes.

What is a Notario Publico?
The notario publico is a neutral party, a representative of the law appointed by the government and who acts on its behalf.


Your HOME LUXURY MEXICO real estate agent and your lawyer will help you set up a Mexican will, the main purpose of which is to clearly define the heirs of the property, greatly simplifying the transfer process in the event of death. This is different from your Canadian or American will, both being more difficult to enforce in Mexico.

 

At this point, both parties involved are ready to continue the purchasing process. With a signed promissory contract, the appropriate permits and registrations completed, your lawyer is now ready to contact the bank involved to apply for the creation of the fideicomiso.

 

Resale properties vs. new construction
If the property purchased is a resale property (as opposed to new construction), HOME LUXURY MEXICO will procure the related documents for you such as a certificate of no encumbrance, a certificate of clearance (proof that there is no has no unpaid taxes) and an assessment of the property.

 

Most of the properties available for purchase in the Yucatan Peninsula are new construction. These documents and certificates are not required for newly constructed buildings. A particularity of the Mexican real estate market is that new real estate is often more advantageous than purchasing a resale property!

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At this point, the securities are officially transferred to your trust (fideicomiso).

Once all closing documents are prepared, you will receive a notice informing you of the due date for final closing costs. After paying the acquisition tax and other related fees, the title will be transferred to the bank. Once everything is completed, the local public register will issue the final act.


Congratulations ! You have gone through the entire process and officially own property in Mexico!

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