The fun part after deciding to buy real estate in Mexico, is to start the hunt for properties, most often on the internet, and then coming down to see the actual condos and villas you have selected.
When you make the decision to make an offer and subsequently purchase, there are business details which need to be addressed. You can rely upon the people you have chosen to assist you in the purchase. We hope you will choose carefully a knowledgeable and capable real estate agent, as well as an excellent attorney versed in Mexican real estate law and multi-cultural customs.
If you know some of the fundamentals about Mexican real estate law, you will be less frustrated. “Knowledge is Power.”
When you decide what kind of home you want to buy, it is important to decide location. Pay great attention to the area around any property in which you have an interest. Undeveloped land around you needs to be checked out, as well as the type of businesses allowed. Know if you are happy with school sounds next door, or street vendors at night. Some owners want the real experience of a local neighborhood, some do not. Know what will be most important to you in advance of looking and falling in love with a property you know will have problems in noise or view.
Here are suggestions for questions to be answered. Do your own research. Also ask the people you are interviewing: your real estate agent, and your attorney.
Do you understand what the Mexican trust or fideicomiso means for properties near the ocean, rivers, or country borders?
How do you establish clear title?
Will you need a permit to buy in Mexico?
Are you going to pay cash or seek a mortgage? Who do you use for a mortgage on foreign real estate?
Do you understand closing costs?
Do you understand the annual expenses of ownership? If you are handling your own maintenance, how will you source the plumbers, electricians, carpenters and so on, who you will use?
Do you understand the condo regime, HOA minutes and financials to make an informed decision to buy in this building? Who will you rely upon to interpret or translate the significance of these documents and to give a valid opinion?
Do you understand Mexican capital gains tax?
Do you understand how the seller’s basis is computed? You, as a buyer, can be a seller someday, so now is the time to learn that the decision you take upon purchase, can affect you tremendously when you sell.
If you make income, do you understand you will owe Mexican taxes?
What do you need to do to register with Mexican IRS (Hacienda) and report income properly?
Do you understand the difference between the Notario Publico, a private attorney, an escrow company, and a real estate agent’s obligations and responsibilities to you?
Do you understand IVA tax? Who pays these taxes? Do you have to collect IVA yourself?
When do real estate property taxes need to be paid? How do you find out the amount due? Where do you pay?
For what utilities do you need a contract? Where and how do you pay your utilities?
Does your bank trust have fees other than what you paid at closing? Can your bank trust act without your instructions? Do you need permission from your bank trust to vote in your condo meetings?
Do you understand the condominiums laws of the state where you own?
You can add more questions as you learn about other subjects of importance to you.
Enjoy your adventure, and welcome to Mexico!
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review.
Harriet Cochran Murray, Director of Cochran Real Estate, is a seasoned Real Estate professional both here in Puerto Vallarta, Mexico and in the United States. Harriet has served in many capacities as a board member for the local Real Estate Association AMPI (AMPI is the national association of real estate professionals). She is also a member of FIABCI and NAR in the United States. Harriet’s expertise and experience in the Real Estate and especially in the Mexican market makes her Viewpoint blog articles both informational and intriguing. Harriet is an Agent who specializes in getting the best deal on the right property for her clients. Visit her website at www.casasandvillas.com and Check out her Real Estate Listings.
