Non-Mexicans buying property in Mexico will likely find that much of the process is similar to that of the U.S. or Canada. However, there are a few important differences, most notably the extra requirements made for non-citizens to buy in the country’s “Restricted Zone” by means of a Bank Trust (Fideicomiso.) There are also other differences in certain laws, most notably the looseness of laws protecting clients; this fact will not make a difference in the process if buyers take proper preparation steps.
While there are laws in Mexico governing real estate transactions from the local, state, and federal level, they are not as detailed and regulated, and, in short there is less protection for the property acquisition process in Mexico than in its neighbors to the north. However, with the right team of experts working at a buyer’s side – real estate, legal, etc. – this same situation of laxer laws can actually open more opportunities without posing any unnecessary risks.
In order to have a clear vision of how the process normally takes place, and in this way help to avoid any unnecessary risk, a buyer will want to keep the following steps in mind as guideline for safe, smooth real estate search and transaction process in Mexico:
- Select a real estate agent. The agent should be qualified – experienced and certified. This same agent will help the buyer begin to form the team of necessary experts (legal, bank, notary, etc.) Since qualifications are not required by law in most of Mexico, this step is that much more significant than back home.
- Research the various laws relevant to their area, real estate type, capital, income, taxes, etc. E-books, blogs and Q&A pages from experts can help greatly in this process. While the agent will be the most important resource, being familiar with the basics will help a buyer to measure the professionalism of agents and choose the most qualified one.
- If buying near the coast or border, a buyer will need to decide how the property will be held – through a Bank Trust (the usual approach) or by a Mexican Corporation (if the property is for business purposes). This is the “Restricted Zone.” An experienced agent will be able to help each buyer decide which is most appropriate.
- Have the legal and financial status of any appropriate properties researched. While this is necessary even back home, in Mexico there are special kinds of property that are communally owned and cannot sold in the same way as private property, and only Mexican citizens can hold the rights to them. Such situations are best avoided by foreign buyers. If a buyer is working with an agent experienced in work with non-Mexicans, they will only present privately owned properties for sale. They will also guide the buyer through the process of having all other beneficial details researched.
- Be familiar with the appropriate contracts; Offer to Purchase, Promissory Contract and Purchase Sales Contract are the three possible contracts to be used in that order. Not all need to be used for all purchases. Step 2 will help buyers be comfortable with this process. Again, the most important factor here will be an agent who knows which contracts are appropriate for each area, property type and individual transaction.
- Review legal documentation. The use of a lawyer experienced in dealing with non-Mexican real estate buyers will be useful.