Some of the Frequently Asked Questions..
How the buying process works and how long it takes.
The process to purchase property in Mexico is very similar to the US and Canada. Once you find the property you like, an offer to purchase is presented to the seller trough your Real Estate Agent. After the offer is accepted and signed by the seller, a promissory contract to purchase is established. This contract will stipulate closing time frames, detailed costs, terms, inclusions and exclusions for buyer and seller and may include a penalty clause if one of the parties cancels.
It’s customary to provide a deposit between eight and 10% of the full price as earnest money and a percentage amount of the closing costs, which includes property city appraisal, certificates of no liens and no tax debt issued by the Municipality where the real estate is located, along with the cost to establish the Fideicomiso or Bank trust. This process will take between 3 to 4 weeks.
The closing takes place at the Notario Publico office. Unlike in other countries, Mexican Notarios are highly trained lawyers appointed by the State Governor and licensed to authenticate documents and legal transactions. At the closing in front of the Notario Publico, the rest of the closing costs are paid. These include notary fees and the registration of the real estate property with the Municipality and acquisition tax transfers derivate of the purchasing. The earnest money and balance of the purchase amount will be presented to the seller and the Notario will release the new property title (escritura) to the buyer. The Notario Publico collects the transfer and capital gains taxes and records the purchase with the Registro Publico at the Municipality where the real estate property is located.
Are the closing costs a percentage of the value of the Property?
In Mexico the buyers pay all of the closing costs with the exception of capital gains, which are the responsibility of the seller. The taxes on a property purchase are related to the value of the property and this is a minimal percentage which goes no higher than 3% of the value of the real estate. The rest of the closing costs are the certificates and appraisals which are not more than $230.00 USD. Notary fees are discretionary and thus vary. The establishment of the Fideicomiso depends on the bank of your election and costs approximately $3000.00 USD. Of course, each situation is unique, but these are the basic facts about closing costs.
What kind of paper work do I need to live in México?
The Mexican law grants you the right to live in the country for up to six months with the visa or FM-T (Tourist Card) you were issued upon entry. This can be enough for foreigners if they make regular trips back home. All airlines issue these visas every time you fly into Mexico from the US or Canada.
If your goal is to be in Mexico for more than 6 months a year, you can apply for FM3 visa, which grants non-immigrant privileges. Certain requirements must be met in order to obtain this type of visa. You will need to provide three months worth of bank statements from your bank in the US or Canada which proves that you have income of approximately $1400 a month. You will need your passport and proofs of residency. This includes your Telemex phone bill, your SAPA water bill and your CFE electric bill. This is not a difficult process, but it does take some time and several visits to Immigration. You can do it yourself or we can introduce you to a facilitator who specializes in expediting the process and will take care of most of the running around for you for a moderate fee.
Can I bring my pets to Mexico?
You may bring 2 dogs or cats on an airplane. If you fly, be sure to check the pet regulations on the website of the airline you are flying with. Most require a cage per animal that must be large enough for the animal to stand up and turn around. They also require that you provide a bowl of fresh water. Mexico requires that you provide a health certificate for each animal from a licensed veterinarian. It must be completed no more than 15 days prior to your trip. If you drive down, you won’t be required to provide documentation for your pets, but we recommend that you have copies of all current vaccinations with you.
What documentation do I need to drive the Baja my own car?
If you drive down the Baja peninsula, you do not need a vehicle permit. However, you will need Mexican car insurance which you can purchase on the US side of the border prior to entering Mexico. US and Canadian car insurance is not fully valid in Mexico. It is wise to check with your insurance company before you leave home. Some companies cover you partially and all the Mexican insurance you will need to buy is liability insurance. Others do not cover travel in Mexico at all. It can save you money if you check in advance!
After I buy the house, how do I change the utilities to my name?
As mentioned previously, before you can apply for an FM3 you need to provide proof of residency. Once you have closed on the house, you must go to the Telemex office, a SAPA office and the CFE office with proof that you own your house. You will also need to bring your passport. If you do not speak Spanish, it’s best to bring someone along with you who does to simplify the process.
Can I lease property in Baja instead of buying it?
If your purpose is to own the property with a lease, then the answer is no. With a lease you don’t own the land; you can lease the land for 1 to 10 years at the most, leases for terms of in excess of ten years are not valid in any Mexican court.