The process of purchasing property in Mexico for a non-Mexican is similar to the process in the United States or Canada, except that it requires a few extra steps. These include the requirement of registering and obtaining permission from Mexico’s Secretary of Foreign Relations and having to establish a Fideicomiso, or bank trust when buying property in the restricted zone.
Real estate transactions and property rights are outlined through local, state, and federal laws in Mexico; however, the protection for the parties involved are not as detailed or regulated as the property acquisition process established in the US and Canada. While many people may see this as a deterrent, this allows for opportunities as long as you have a good and experienced real estate team representing and protecting your interests.
The most important steps when purchasing a property in Mexico are:
1. Selecting an experienced, certified and licensed real estate agent.
2. Identifying the area you are interested in purchasing real estate in.
3. Researching and studying the Mexican real estate laws and procedures – this is where having a knowledgeable real estate agent helps.
4. Researching properties and having your real estate agent compile a list of properties that meet your criteria.
5. Physically visiting and touring the area and properties with your real estate agent so you can evaluate the pros and cons of each property.
6. Choosing your new Mexican dream home and making an offer.
7. Preparing the promissory contract.
8. Deciding which entity will hold the bank trust and property on your behalf (if you are purchasing in the restricted zone).
9. Preparing the purchase sales contract and having it formalized with the notary public.
10. Inspecting the legal documents and obtaining permits.
11. Formalizing the conveyance and filing with the public registry.
Those are the main steps to purchasing a property in Mexico. Once you have found the perfect property, what do you do? The first thing is to place an offer to purchase.
Offer to Purchases:
The offer to purchase is the first document you need to begin the process of transferring a property from the seller to the buyer. It can also be prepared as a reservation agreement or an earnest money deposit, listing the main points of the future transaction.
The offer to purchase can be as complex or as simple as the buyer deems necessary. This is the preliminary agreement containing the basic information to execute the transaction such as names and personal information for both parties, the description and address of the property, the price and payment terms, the terms and conditions of the offer, and the closing date. Any money released, such as earnest money, should be refundable during this phase.
The offer to purchase is a legal document. Once it has been signed and accepted by both the buyer and the seller, it creates a binding commitment for the buyer to purchase, and the seller to sell. It can be signed before a notary or before two witnesses. Even though it does not need to be notarized, it does have a legally binding effect.
Based on Article 27 of the Mexican Constitution, a non-Mexican citizen cannot hold a real estate title within the restricted zone. This zone is 50 kilometers from the coast and 100 from the United States or Central American borders. Because the Mexican Constitution forbids non-Mexicans from purchasing within this restricted zone, an innovative and secure method of holding the title was created; this allows foreign ownership through a property trust called a Fideicomiso (or bank trust).