1. "OFERTA PARA FORMALIZAR CONTRATOTRASLATIVO DE DOMINIO IRREVOCABLE" Is the written offer between the buyer and seller to transfer real estate.
2. "NOMBRE" Is the name of buyer or seller. The buyer is referred to as "El Ofertante" or "The Offerer."
3. "DOMICILIO" is the address where the buyer or seller lives for purposes of this contract.
4. "FIDEICOMISARIO VENDEDOR"" is the seller(s).
5. "DESCIRPCION DEL INMUEBLE"" is the description of the real estate. This description can include the meters of land and construction, whether it is a condominium or separate dwelling, and the current registration number of the escritura or public deed of the property.
6. "PRECIO Y CONDICIONES DE PAGO" is the price and payment terms offered for the real estate.
7. "DEPOSITIO DE GARANTIA" refers to the guaranteed deposit, which will be paid upon acceptance of the offer by the seller. The deposit can be held in an escrow account of certain US title companies that work in Mexico, or a Mexican bank with an escrow department. To hold escrow funds, the Mexican government must approve the escrow company. Mexican banks take the creation of an escrow account very seriously. They will issue you a specific account number and require a detailed contract on the escrow money. Be patient if you use an escrow account, as these accounts are not quickly issued for deposit of the funds.
8. "CONDICIONES INDISPENSABLES PARA LA PRESENTE OFERTA" This clause describes the contingencies which have to be met before the offer becomes firm. One contingency may be the receipt and review of condominium documents by the buyer.
9. "FECHA DE FORMALIZACION DESIGNACION DE NOTARIO PUBLICO" This is the date of closing and the choice of which public notary to use for the transfer of the property. Public notaries are attorneys with specialized education and are appointed for life by the state in which they operate. There are a limited number of appointments per state and each notary is issued a number.
10. "DEMORE EN LA FECHA DE FORMALIZACION" In the event that there is a delay in the transfer, the closing date can be extended to an agreed upon later date. At this later date, if the closing does not occur, the contract terminates, unless both parties agree to an extension.
11. "GASTOS DE ESCRITURACION, IMPURESTO SOBRE LA RENTA Y HONOARARIOS INMOBILIARIOS" are the closing costs, capital gains tax and real estate fees. The buyer's closing costs are traditionally the cost of the bank trust, the notary fees, and a real estate transfer tax. The seller's traditional costs are capital gains tax, and the real estate commission, if applicable. There also may be charges to the seller for cancellation of his trust.
12. "REQUISITOS PRELIMINARES PREVIOS A LA FORMALIZACION DEL CONTRACTO DEFINITIVO" These are the preliminary requirements required to formalize the contract. In this section, the parties agree to cooperate with the public notary and provide the documentation that he requests.
The buyer agrees to pay a deposit for his closing costs. Buyer closing costs, if they include a trust; can be 4-8% of the sales price as an average. Included in this buyer cost, is the real estate transfer tax.
13. "LIBERTAD DE CARGAS O GRAVAMENES Y DEMAS OBLIGACIONES" The transfer of the property will be conveyed free of recorded liens, encumbrances or other liabilities.
14. "CONDICION GENERAL Y ESTADO DE USO Y FUNCIONAMIENTO: The property condition is described, including which services are available to the property. The seller agrees to disclose if there are any hidden defects know to him.
15. "CONTRATO BILATERAL OBLIGATORIO" The buyer and seller agree that the offer shall become a legally binding contract to both parties. The buyer and seller agree to proceed to closing if the contingencies have been met.
The public deed will be written with the terms established in the contract.
The contract will contain the legal elements pertinent to real estate under
Mexican law.
This clause may also contain language about default and penalties. Default and penalties refer to the guaranteed deposit and other money that may be due one of the parties.
16. "TERMINO DE VIGENCIA: The offer is in effect for a certain period of time for response from the seller. If the seller does not respond by this date, the offer becomes invalid.
17. "JURISDICCION" The parties agree that their contract will be subject to the jurisdiction of the court and laws of the state and/or city where the property is located in Mexico.
The date and time is written of the offer to the seller.
18. "EL OFERTANTES" The buyers sign. "TESTIGO"there are two witnesses to the signature.
19. "EL FIDEICOMISARIO VENDEDOR" is the signature of the seller, which is also witnessed by two persons.
20. " LUGAR, FECHA Y HORA DE ACEPTACION" This is the place, date and time that the agreement is accepted by the seller. This critical date establishes the beginning date of the contract.
21. "ANEXO" There may be special addendums to the contract which cover specific types of questions for specific types of property. There can be an addendum for a condominium, a lot, and a separate villa.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas Area. I recommend that each potential buyer conduct his own due diligence and review.
There are no standardized real estate contracts used in the practice of real estate within the Bay of Banderas. There are common elements that should be in the form you use for your offer. This is an outline of one contract: