By Linda Jones Neil
Mexico is a beautiful country. If you enjoy a visit here, you may begin to think about acquiring a bit of our paradise. We have mountains, lakes, rivers, forests, deserts and seashore in Mexico. We also have history, ancient cultures, handcrafts, folklore and many other wonderful things to share.
Buying property in any country can be stressful. A property purchase in Mexico can be just as safe and secure as in the U.S. or Canada… if it is done correctly!
Here are some guidelines for success in a real estate acquisition in Mexico:
1. Be sure the agent you select to represent you is a member of AMPI, the
Mexican National Real Estate Association. Ask for references and check them out. Be satisfied that the person representing you is experienced in Mexican transactions.
2. Insist that the person representing you is representing ONLY you, the buyer, and not also the seller unless you understand, agree to and sign an agency disclosure agreement.
3. Consider only the purchase of private property. Ejidal property (communal land) is often offered at a far lower price but it cannot legally be sold or promised to be sold until it becomes private property.
4. Be certain that you and your agent are dealing only with the owner of record or his legitimate power of attorney. Insist on receiving a copy of the seller’s deed as a condition of your offer. If you and /or your agent don’t understand Spanish, get it translated.
5. Avoid costly and time-consuming litigation. Insist on including a binding arbitration clause in your contracts with the seller and other parties involved.
6. Get a title investigation and buy title insurance for the full amount of your purchase price. While the initial search may seem expensive for some areas, the title policy transfers risk to the insurance company and minimizes yours as the buyer.
7. Think carefully about how you acquire title in order to avoid or minimize probate and transfer costs in the future.
8. Closing costs may run from 13 to 20 per cent of the cost of a $50,000 property. A multi-million-dollar property will be about 3.5 per cent of the purchase price. Certain costs are fixed regardless of value. Be sure to budget for closing costs and get a full estimate in writing from the company supervising your transfer.
9. The major portion of your payment for the property should be withheld or held in escrow until the deed has been signed by the seller and, if applicable, the bank trustee (if a fideicomiso).
10. Insist on receiving a registered title document for your property. If the seller is financing the property, sign a document protecting his interests in the event of your default. Be sure you know the amount that is declared in your deed and understand the tax implications.
11. Use an experienced neutral third party to supervise the transfer of title to you.
Linda Jones Neil CIPS, ABR, TRC, PIC is the founder of The Settlement Company, which specializes in real estate transfers and escrows. Licensed as a California real estate broker, she has pursued her profession in Mexico for more than 35 years. Her skills in negotiating contracts between parties from three distinct cultures have placed her services in demand as a consultant and for speaking engagements on Mexican law and customs in Mexico, the United States and Canada. Email [email protected]; website www.settlement-co.com
