Modified Edition of Buyer Beware!

Buyer Beware When Buying in Mexico

by Enrique (Henry) Saldana  (Nov./Dec. 2012)

Back in July 2006 I wrote the following article; I have made some modifications for this edition, but the rules herein referred to still apply to this date. And I will explain why.

Just recently I came across a client who bought a property about a year or so ago. It was a cash deal, so he signed the deed at the Notary and assumed the deed would be recorded immediately after that, though he never received confirmation of the same.

Upon further revision, we found out that the deed was not recorded as of yet, so we contacted the Notario to find out what to do and request that the document to be properly recorded.

My point exactly. This client was lucky enough to have been working with a honest and serious seller, for he could have had a more serious problem. The property could have been sold by the same seller to another party before the deed had been recorded, and he would have been out of his whole investment and the property as well.

What happened in his case could have been that the deed at the registrar's office fell through the cracks, or someone must have dropped the ball in the process. The Notary did submit the deed to the registrar's office and had no knowledge of what had transpired with the same afterwards. Furthermore, and the buyer being a foreign buyer, he did not follow up and request a Registrar's signed and sealed document verifying the entering of the deed in the registrar's books to confirm the new ownership.

This is the reason why I have considered rewriting this article. I would like to make new foreign purchasers, or any purchaser for that matter, aware of the importance of the following steps.

Some Tips to Follow When Buying Property in Mexico

Do you want the keys to your dream house in the Caribbean? Here are a few pointers of what to avoid when purchasing property in Mexico.

… We are herein going to give you some tips (rules) of what To Do and what Not To Do when purchasing property in Mexico.

1. The first rule of buying property in Mexico is, DO NOT ASSUME ANYTHING! Purchasing property in Mexico is not the same as in other parts of the world.

Do not assume property purchases in Mexico are carried out automatically in a manner similar to your native country.

Do inquire about legal aspects in the purchase of properties in Mexico by foreign buyers.


2. The second rule of buying property in Mexico is to make sure you find a reputable real estate agent. Be sure to ask for references and experience to ensure  that they are a legitimate agent.

Do not use just any realtor since real estate agents are not regulated in Mexico.

Do request someone that is familiar with Mexican law, but most importantly knows and understands the North American way of business since there are certain aspects that must be seriously considered when purchasing a property in Mexico. The agent needs to understand the law and process for doing a legal deed transfer in Mexico.

3. The third rule of buying property in Mexico is that NOT ALL CLOSINGS ARE THE SAME! There still is a lot of untitled property in Mexico, therefore, you must request that the property you are purchasing is titled, especially when purchasing property in Ejido land.

Do not assume all properties being offered for sale are titled.

Do inquire about ths issuance of title at closing and verification from the registrar's office upon the inserting of new ownership in thre registrar's books.

4. The fourth rule, the ultimate proof of ownership of a property if it ever comes into question, can be guaranteed through the use of a "Notario" who can prepare the right documents for you.

Do not assume title transfer occurs automatically through a property purchase in Mexico.

Do request a "Notario" (a qualified government-appointed lawyer who acts on behalf of the government to ensure the proper transfer of all real estate transactions).

Finally, and since for legal purposes all closing documentation is in Spanish, make sure you get a qualified translator to explain the deed. Generally speaking a Mexican deed is about 20 pages (2 sides) of a legal-sized document, though most of the writing is legal information which in other countries would be considered irrelevant but, for Mexican legal and government purposes, is consider essential in Mexico. All of this info is prepared and inserted by the Notary, but make sure you choose the right Notario and request an estimate of the closing costs involved in the transaction.

Which takes us to the following and final rules:

Do not assume all closing costs are the same for every closing, though they may be quite similar.

Do inquire about closing costs and request an Estimated Closing Costs document from your real estate agent and the Notary.

These and other aspects should be taken into consideration when purchasing property in Mexico.

And, as they say in the USA and Canada, "Buyer Beware." The only way to do that is to do your homework and find an experienced real estate professional that may provide a real Real Estate Mortgage Experience for your home purchase in Mexico.

 

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Enrique (Henry) Saldana

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