The Mexican real estate system presents some differences from the rest of the world when buying a property. So naturally, those differences applied to foreigners wanting to buy a property in Mexico, by the sea. To better understand the process, we put below a step-by-step guide to acquiring property in Mexico.

Step 1 "Offer to buy"

Once you have found the property you're interested in and are ready to buy it, you must present an "Offer to buy." This step is to negotiate the price, inclusion, amount, payment method, penalty, and other essential details. All the negotiation details and agreements are written in this document. This offer comes with a deposit which is refundable if not accepted. The seller then has the right to either accept, decline, or counter offer. Once your offer is accepted, you can pass on to the next step. Note that when you hire a real estate agency, you don't pay the commission to the broker; the seller covers, and it’s safer than buying directly from the owner.

Step 2 "Promissory agreement"

In a sale between individuals, once all parts have written their conditions and The seller accepted the offer, you need next to sign a "promissory agreement to buy and sell." This agreement is private between the two parties. This document describes all the terms and understandings between the two parties, the buyer promises to pay for the property, and the seller promises to sell. Keep in mind that it is usually the buyer that has to arrange this agreement with the help of a lawyer. That is the moment when the seller provides all the legal documents of the property. If you decide to buy a property in Cancún or Playa del Carmen with Century 21 Caribbean Paradise, we include all legal services with our in-house lawyer for the quickest process.   

Once the seller has signed the agreement, the buyer pays the "earnest money" to the owner. A deposit is considered a guarantee. This agreement engages both parties. If the seller or the buyer changes their mind and cancels the Promissory agreement, they have to pay the penalty agreed.

If the buyer doesn't feel safe to pay the earnest money directly to the seller, he can hire the service of an escrow company. Century 21 Caribbean Paradise agent can advise you regarding this step.

If you buy a property on pre-sale with a builder, they already have their contracts and lawyer, and you do not need to prepare for this step. And your real estate agent will help you review all the terms and conditions of the contract.

Step 3 "Constitution of a bank trust or create a company" 

Since you are a foreigner, this step is mandatory. Following the constitution of Mexico, there is a restricted area for buyers who want to acquire a property in Mexico. This area extends over 100 kilometers from the land borders and 50 kilometers from the coast. To buy a property, foreigners have to either create a bank trust or a company. 

If you buy a property with no business purpose, you need to constitute a bank trust, commonly known as fideicomiso, to get your title. You and the bank that you choose will both hold the title of the property. You keep all of the rights to the property, and the bank is obligated to act in your best interests. If the bank closes, the title passes automatically to another bank, you will not lose the fideicomiso. This agreement is valid for 50 years and is always renewable. 

If you want to create a business company to acquire the property, you need a Foreign Owned Mexican Corporation, known as FOMC. This act stipulates that you are a foreign opening a business. The corporation will hold with you the title of the property. Condition applies a minimum of two shareholders, of minimum 18 years old, and one needs a Mexican Visa. You also need to report your income monthly to the Mexican Department of the Treasury.

Step 4 "The closing at the notary"

After the "promissory agreement" and either the fideicomiso or the FOMC, it is time to close the deal. The signature of the title of property by the new owners is the final step. When you made your closing deal with Century 21 Caribbean Paradise, the agency coordinates the closing, delivering the notary and other required documents. This signature confirms that the buyer is the new owner of the property. The presence of a translator is required for foreign buyers or sellers. After the signature, you will receive the key to the property. After the meeting, there is a reunion at the property with the buyer, the seller, and the agent to act as delivery.

The notary keeps the title of the act of the property until the title gets registered in the Registro Publico de la Propiedad y del comercio (RPPC). Then, the agent, seller, and buyer are given certified copies of the deed. Finally, after one to three months, the notary will deliver the new deed to you.

Congratulation, after all those steps, you are now a foreign owner in Mexico.

Are you a foreigner? Are you interested in buying in Mexico? Did you know the process for buying a property? Comment Bellow!