If you or someone you know wishes to purchase a new home or investment property in the country of Mexico, it’s important to keep in mind that the process to do so is incredibly simple, so long as you do all of the proper research and secure the representation of experienced real estate professionals and a fully licensed real estate attorney.
It’s also a good idea to have at least someone of an idea regarding property objectives before you simply decide to purchase one, such as whether you want to purchase one to live in yourself or one to invest in.
Back in 1917, Mexico’s government ruled that all land in the country would be communal, meaning that it would be used for agriculture, as well as farmed by local residents rather than being private property. Not all land there is like this nowadays; however, anyone who wishes to purchase real estate there should first take the time to ensure that land is not classified as such.
In 1973, the Foreign Investment Law was passed in Mexico, which enables foreigners to purchase real estate anywhere in the country with the exception of coastal and border land. The law was later amended in 1993 in order to allow purchases located within restricted areas through trust agreements made with a Mexican bank.
Additionally, foreigners are also permitted to own land located in restricted areas thanks to partnering with a Mexican corporation. This is the best suggestion if you are looking to purchase land for either business or investment purposes.
In terms of the purchasing process, here are the steps that you will need to make note of.
Offer/Acceptance
Begin by officially making an offer, which should be made in writing, though Mexican law does state that verbal agreements are equally recognized. Putting the offer in writing will help to prevent any confusion in regards to terms and conditions, however. The offer should be in the form of an “Offer to Purchase” contract, which will detail all main terms regarding the sale, including price, payment plans, earnest money deposit details, and a deadline for the offer to be accepted.
Promissory Agreement
This will legally bind both the buyer and seller into a specific timeframe in which they must execute the purchase contract. Mexican law mandates that both parties will be bound by the terms of this type of agreement, meaning that if and when all guidelines are met in order to execute the purchase contract, neither party will be able to back out of the sale itself. The seller will contact the buyer’s bank once the agreement has been signed in order to initiate the trust application. Your attorney will then work with the Ministry of Foreign Affairs to order a trust permit.
Sales/Purchase Agreement
Both parties should then be able to execute this specific agreement prior to starting the closing process itself, as well as transferring the property title. The bank trust office should also have received the official trust permit from the Ministry of Foreign Affairs, and from there, your attorney will then be able to begin composing the drafts for the closing deed, which will then be placed under official review.
Closing/Title Transfer
Once all necessary factors have been verified and all closing paperwork is officially ready, you will receive notification regarding a closing date, as well as what final costs are due. The final deeds will then be signed, all final payments will be settled, and the property title will be transferred to the bank trust.
Thank you for visiting the Lawyer from Mexico blog, a Mexico real estate lawyer. We write to inform you about news and laws in Mexico and Austin.