5 Steps to Buying a House in MexicoOctubre 23 de 2023
Can Americans or Canadians buy property in Mexico?
Simply put, Americans or Canadians can buy both land and property in Mexico without any restrictions².
Can foreigners buy beachfront property in Mexico?
Originally the Foreign Investment Law would stop expats buying properties that were within 64 miles of an international border or 32 miles from the shore. However, this was amended in 1993 — meaning that the idea that foreigners have restrictions when buying property in Mexico is nothing but a myth.
That said, in order for Americans — or any other international buyers — to purchase land in these prime areas a fideicomiso is needed².
💡 Fideicomiso: what is it?
A fideicomiso is a bank trust which is used to allow foreigners to legally buy land in areas close to the beach or national borders.
Since the rules about foreign ownership of prime land were relaxed in 1993, foreigners have been able to set up a fideicomiso which gives them indirect ownership of restricted land through a trustee. While the trustee is the legal owner of the land, the beneficiary of the trust maintains all rights to sell, lease or pass on the land.
This has some advantages, as expats owning land in Mexico through a fideicomiso may pass their property to heirs without needing a formal Mexican will. However, the system rests entirely on the credibility and trustworthiness of Mexican institutions which does put off some foreign buyers wary of taking on risks overseas.
5 Steps to Buying a House in Mexico
Owning real estate in Mexico has many benefits, from the obvious perks that come with having a home in paradise, to the financial boost that can come with buying income producing property in a high-demand vacation destination… But what about the practical concerns of owning real estate in a foreign country?
How Hard is it to Purchase Property in Mexico?
We already know Mexico offers fabulous weather, gorgeous scenery, authentic Latin American culture and incredible activities that simply can’t be found anywhere else in the world, so let’s go over the process of finding and purchasing property and discover how easy it is to make your dream a reality with these five steps to buying a house in Mexico:
1. Offer and Acceptance
Obviously finding a property, making an offer and having it be accepted are the first few basic steps to owning real estate in Mexico (and pretty much anywhere else), but it’s also important to hire an experienced real estate professional you can trust. The importance of developing a good relationship with a knowledgeable local realtor really can’t be overstated, as he or she will help you find the best property for your unique situation, as well as write the official offer to purchase contract. This contains the main terms of the sale, including price, payment plans and details about the earnest money deposit.
2. Promissory Agreement
After the earnest money deposit has been made, the promissory agreement will be drawn up, which binds the buyer and seller into a time frame during which the buying contract must be executed. The promissory agreement is designed to define the basic terms of the sale while all parties produce the required paperwork and work out details of the final purchase contract. If you are buying property within 50 kilometers of the coast, you will also be required to begin the trust application (fideicomiso) once the promissory agreement is signed. This is simply a workaround established by the Ministry of Foreign Affairs to allow foreigners to own real estate in what was formerly part of the “restricted zone.” Your lawyer should also work to verify the legal status of the property at this time, reviewing the title, rights to transfer and all other terms of the purchase contract. As a buyer, the documentation you will be required to produce is minimal, but you will need your passport and driver’s license, as well as a recent utility bill as proof of address. Note: All parties are bound by the terms of a promissory agreement under Mexican law, which means neither the buyer nor seller can back out of the sale if all terms and conditions are met.
3. Purchase (Sales) Agreement
Once everything is found to be in order, the trust (fideicomiso) documents will be drafted (if required) and you should be ready to execute the purchase / sales agreement, which starts the closing process and will ultimately transfer title of the property to you (or to the trust / fideicomiso, if applicable). The bank should also have the permit from the Ministry of Foreign Affairs, so your attorney will begin drafting the closing deed. Note: The closing deed should also be reviewed by a notary and a bank trust officer.
4. Closing Costs / Title Transfer
Once everything is verified and correct, the closing paperwork will be prepared and you will receive notification of your closing date and the amount due. Once closing costs are paid, you will sign the deed(s) and the title will be transferred to the bank. Your notary will issue a copy of the closing deed, which is your first proof of ownership, but within approximately three months of closing, the Public Registry will send you the final deed, which contains an electronic folio. Note: Keep in mind that the delivery of your property and taking of the title are two different steps that can also take place on different dates.
5. Delivery of Unit
After closing, you will need to do a final walk-through of the property to make sure everything is still in satisfactory condition before you formally take ownership. If satisfied, you will sign a delivery statement that provides pertinent details about delivering the property. Note: It’s also important to mention that your attorney may be able to help by handling at least some of these requirements, so you won’t have to be physically present for every single step of the purchase process.
Whether you’re dreaming of owning a luxury condo on the Caribbean Sea in the laid-back Riviera Maya region or prefer the faster pace of life farther north on the Yucatan Peninsula in the city of Cancun, Mexico real estate offers something for virtually every taste and budget. We hope these five basic steps to buying a house in Mexico helped clarify the process and have brought you just a little closer to making your dream come true!
Would you like to know about buying a house in Mexico? Post your questions in our comments section!