Can Americans and Canadians Legally and Safely Own Property in Mexico ???

Yes, Americans, Canadians and all non-Mexican Citizens can obtain direct ownership of property in the interior of Mexico. Beach-Front and Borderline property may also be owned by Americans. This land falls into a special category called the ‘Restricted Zone”.

The Restricted Zone is land that is that land 50 KM ( 31 miles) from the coast or 100Km (62 Miles) from an international border. Think about it. This is actually a prudent ideal-why didn’t the US do this. it’s a natural protection for a country to have some border security.

Mexico did not want to loose all its prime real estate but at the same time desired to encourage foreign investment. The Mexican Constitution included a section to protect foreign ownership of Beachfront Property and Borderline Property through a special process called a ‘Fideicomiso’ or Bank Trust.

This system has worked well for over 25 years. It is how I bought by first Cancun beachfront condo in 1999 for $50,000 and resold it in 2002 for $85,000.

The bank holds the deed in trust for you for a duration of 50 years at the end of 50 years you can renew the trust for another 50 years.

You of course may place your wife or partner as a equal trustee on your trust and of course you would list a person or persons you would wish to pass the trust on in the event of your passing. You have full ownership rights and may sell and rent as you wish. The Bank Trust cost approximately $1,500 to create and $600-$800/year to maintain. Yes this is an extra cost you would not incur in the US. But think about the property taxes you would pay in Florida for a $500,000 home perhaps $10,000 -here you pay less than $1,000 and probably closer to $600.

Many Mexican Banks offer the services of creating a Bank Trust for the purchase of properties, condominiums and other homes in the restricted zone. I recommend a Canadian Bank, ‘Scotia Bank’ because of its continued fine service if you find others please tell me. I used to used ‘Banamex’ but it was bought by US Citi-Bank and for whatever reason customer service deteriorated.

What Professionals are involved in a Mexican Real Estate Purchase/Sale/Transfer?

There can be up to 5 professionals and in this case the more players usually means the more expense for the buyer.

Essential Representatives:

 

The Real Estate Agent, The seller and buyer.

The Bank Trust Representative (where you have created the Fideicomiso or Bank Trust). In Cancun there one man who stands alone for his excellent service, David Martinez, from Scotia Bank. They don’t get better than this. David speaks perfect English and will patiently answer all your questions. Call him form the US dial (01152 99 88 92 0433) his cell is 9988 -1010 48. Scotia Bank, Cancun is located on Av. Tulum 25 SM 5 on the East side of Tulum between Uxmal and Chichen Itza.

A Public Notary- In Cancun we exclusively use Notary #26- Why? English speaking, fast and quite frankly the best notary I have met. You of course may choose to use any Notary.

A Buyer’s attorney. This is at your discretion. Yes it is always great to have a legal representative but quite frankly it is usually unnecessary and adds substantial cost and complications to the process. I know of only one US attorney who can practice law in Mexico because she was practicing before NAFTA (that great piece of legislation that prohibited US attorneys from practicing law in Mexico. Email me for her contact information. My intentions are not to disparage attorneys -they are great when you are in trouble. My own personal US attorney’s favorite trick is to engage me in 15 minutes of ‘small talk’ then add that to his bill at $125/hour. Personally I think we should all be paid $125/hour for talking about our family and our golf game. No one wants to listen to my stories. IF YOU HIRE AN ATTORNEY AGREE ON NOT ONLY HIS RATE (Mexican attorneys do not make $125/hour-although they will try) and set a maximum limit on the cost of his representation. Make copies of all documents you give to the notary or your attorney.

 

NOTICE: I WILL TALK AT A MUCH LOWER RATE TO ALL THAT ARE INTERESTED
IN MY STORIES

Property Purchase in the Mexican Interior and at least 50 KM ( 31 miles) from the coast or 100Km (62 Miles) international border and can be direct titled deeded in your name without A Bank Trust.

All legal documents must be in Spanish (that is the National Language should be no big surprise). You should request a certified legal translation (cost approximately $25/page)

All purchase documents must be signed in the presence of a notary or there are not legally binding………………………..How can I make this any clearer. So for all you folks that are Going to barnstorm Mexico and buy a property over the weekend when it is convenient for you to travel FOR-GET-ABOUT- IT.

PLAN ON A MINIMUM OF 4 BUSINESS DAYS AFTER YOU HAVE LOCATED THE PROPETY

You will need to contact the owner -who may not live in Mexico.

You need to create a Bank Trust - Monday through Fridays by appointment if possible.

You need to meet at a notary’s office (NOT ON A SATURDAY) with the seller or the Seller’s representative to sign the Purchase Agreement and place your deposit in an Escrow account that you must create.

The Notary is an independent government elected official ‘impartial’ and dedicated to oversee the lawful and proper transfer and sale of real estate. This is a powerful and lucrative office If the notary subverts justice he can loose his office. Just as in the states not all legal representatives act in the best interest of the law and the citizens they represents so it is true of notaries. They are responsible to research the property and title to insure there are no liens or debts attached to the property. Are they 100% accurate. No -they use public records and Mexican Public records are not as accurate as US public data bases. I have not seen a problem in our 5 years of business. But as in the US you can get complete protection by the purchase of TITLE INSURANCE from a US company such as Stuart Title, www.Stuart.com

Personally if I had to choose between the cost of hiring an attorney and buying Title insurance, I would buy the title insurance. An attorney only guarantees you a bill.

It takes approximately 2 weeks to create the Bank Trust and usually 4-6 weeks for the notary to conduct his lien research, certify all bills have been paid and have the documents prepared for the closing.

If you finance a purchase the mortgage company may insist on using their own appraisers and notaries. A financed purchase may take up to 90 days to close. While 90 days is fine for new-construction most Mexican buyers will not remove their property from the market unless you put up a non-refundable deposit which you will forfeit if you cannot close the sale within the time limits specified in the
purchase agreement.

Many of our clients choose to have our attorney represent you so you do not have make multiple trips to Mexico to sign documents. You can choose to have our representatives represent you in a ‘Limited Power of Attorney’ for the specific purpose to buy the specified property at the specified price only in your name, the cost of this is approximately $200.00.

Mexican Real Estate Companies

Mexican real estate transactions are not carried out in the same manner as United States real estate transactions. The buyer must retain professionals to assist in the transaction. Mexico has yet to regulate real estate transactions. Real estate agents and brokers are not legally licensed in Mexico. Consequently, a foreign buyer cannot always depend on the normal safeguards that would be applied to real estate transactions in the United States. The old saying "let the buyer beware" is very appropriate. Anyone can set up a real estate company in Mexico. There are no special requirements or brokerage licenses to obtain. A would-be real estate agent merely has to establish a Mexican corporation, obtain a work visa, and he is in business.

AMPI is the only professional Real Estate Organization ask your realtor if he is a member.
There are good reasons why the real estate industry in the United States is highly regulated. Until the real estate industry is regulated in Mexico, there will always be some real estate companies who prefer that buyers know as little as possible about real estate transactions. After all, a buyer cannot ask questions if he does not have any knowledge of the laws.

Our Cancun Representative is a Mexican Attorney and Real Estate Agent and will be happy to answer your questions.

Much of the work can be done in advance of your travel if you work with us. Documents can be faxed to you in the US to sign using an stamp of authenticity called and APOSTILE.

We want to make this process as safe, convenient and stress free as possible but we need you advance cooperation. The most stressful think about Mexico is the purchase process, once you jump this hurdle -its just life on the beach.

 

	CLOSING COST EXAMPLE
	Date: DEC 8 2005
	Address:
NOTARIA PUBLICA NUMERO TREINTA Y SEIS
COSTUMER’S NAME
PROPERTY’S VALUE		$	2,000,000
TITLE ORIGINATION		$	00,000,355
TITLE REGISTRATION		$	00,020,000
CERTIFICATE OF NOT LIEN		$	00,000,555
APPRAISAL		$	00,008,750
TRANSFER TAX		$	00,040,000
PUBLIC REGISTRATION		$	00,001,000
NO WATER DEBIT		$	00,000,200
CHANGE OF OWNER’S NAME		$	00,000,200
REGISTRATION OF PROPERTY’S LEGAL ID		$	00,000,253
TOTAL TRANSFER EXPENSES		$	00,71,713
NOTARY’S HONORARIES		$	00,035,000
TAX		$	00,003,500
TOTAL		$	0,109,813

Mexican Real Estate Closing cost vary between 5-8% depending on if the transaction is a cash purchase (5% closing costs) or a financed purchase (7% to 8%), These closing cost are high compared to US closing costs. But your low property taxes and property appreciation will quickly offset these closing costs.