Law

Buyer Checklist

Foreigners interested in purchasing property in Mexico should consider the following in making any investment:

1. Understand that Mexico is a foreign country with a unique set of laws that must be adhered to in order to acquire recognizable rights in real property. Do not expect paperwork, procedure or costs to be the same as in the U.S.

2. If you are purchasing residential property in the restricted zone, you must buy through a Mexican Bank Trust. Don't use a corporation to acquire residential property. A trust is not a lease. To be sure that you are getting good title, purchase Title Insurance.

3. Real estate agents in Mexico are not regulated in every state. Regulation varies widely and while some States like the State of Sonora have led the nation in the education and regulation of it’s real estate salespeople, they generally do not carry professional liability insurance.  It is imperative to use qualified professionals including a trustworthy Mexican agent or attorney, possibly in cooperation with a knowledgeable U.S. attorney since the Mexicans do not typically carry liability insurance.

4. Due diligence issues are often similar to those in the U.S., but may not be raised by real estate professionals. It is your responsibility to negotiate the proper proetections oin your contract including but not limited to inspections, U.S escrow, Title insurance, U.S. appraisal, and U.S. financing. You can ask to have your earnest money held by a Mexican bank in a conditional deposit subject to the satisfaction of any contingencies that you negotiate in your offer to purchase, including issuance of a bank trust if applicable. Establishing an escrow account in the U.S.is recommended.

5. Closing Costs in Mexico are often much higher than in the US or Canada, depending on where you are coming from. Get an estimate of closing costs before you make an offer, and discuss who typically can pay what and whether or not any of the costs are negotiable.

6. When purchasing in a new home community or subdivision make sure that the improvements are in or that there has been a bond posted for the completion of the improvements. Ask about Title Insurance and a Mexican Bank Trust. In Arizona ask for a Public Report. Just because there is an offer made to sell a particular lot number does not mean that any such lot has been duly subdivided & recorded in the Public Registry of Property.

7. Be patient, transactions in Mexico may take longer than you anticipate. If someone suggests that you should purchase before your trust has been issued or without a Mexican Notary Public, beware! Mexican Notaries are official government lawyers who are uniquely empowered to formalize and record real property transactions.

Your purchase of Mexican real estate should be an investment, not a gamble. Many foreigners have paid money or built improvements on property that they cannot obtain legal rights to under Mexican law. Still others have tendered large deposits in exchange for discounts on new construction after falling in LOVE with a property. You have nothing until you have obtained title whether directly of through a trust and that interest must be recorded in the Public Registry of Property.