Puerto Vallarta Real Estate Articles

“Buying property in any country can be stressful. A property purchase in Mexico can be just as safe and secure as in the United States or Canada - if it is done correctly.

As a purchaser of real estate, be aware that in most Mexican states there is neither licensing nor registration of real estate agents. However, most real estate professionals are members of AMPI - the Mexican national real estate association. You should ask for references and check them out. Many Texas real estate licensees have established relationships with their counterparts in various areas of Mexico. Ask a local real estate broker you trust if he or she can make a recommendation for an agent to represent you.
Insist that the person representing you, represent only you - the buyer - and not also the seller unless you understand, agree to, and sign an agency disclosure agreement. Be satisfied that the person representing you is experienced in all aspects of a Mexican transaction.

Consider only the purchase of private property. Ejidal property, similar to Indian lands in the U.S., was established as a result of the Mexican revolution of 1917. Ejidal property is not private property, however, and is offered often at a far lower price but it cannot be sold legally or promised to be sold until it becomes private property. Be certain that you and your agent are dealing only with the owner of record or someone who has his or her legitimate power of attorney. Insist upon receiving a copy of the seller’s deed as a condition of your offer. If you or your agent does not understand Spanish, get it translated.

Get a title investigation and buy title insurance for the full amount of your purchase price. While the initial search may seem expensive for some areas, the title policy transfers risk to the insurance company and minimizes yours as the buyer. Think carefully about how you acquire title in order to avoid or minimize probate and transfer costs in the future. Avoid costly and time-consuming litigation by insisting upon a binding arbitration clause in your contracts.

Be sure to budget for closing costs and get a full estimate in writing from the company supervising your transfer. Certain costs are fixed regardless of value but others depend on the sales price. Closing costs may run from 13% to 20% of the cost of a $50,000 US dollar property but be only 3.5% of a multimillion-dollar property. The major portion of your payment should be withheld or held in escrow until the seller has signed the deed and, if applicable, the bank trustee (if a fideicomiso).

Insist upon receiving a registered title document for your property. If the seller is financing the property, sign a document protecting his interests in the event of your default. Be sure you know the amount, which is declared, in your deed and understand the tax implications involved. Finally, make sure you use an experienced neutral third party to supervise the transfer of title to you.

By following the above points you can become a proud and satisfied owner of real estate in Mexico - a country with mountains, lakes, rivers, forests, deserts and seashore, a nation with history, ancient cultures, handcrafts, folklore and many other wonderful aspects.”

This article has been written by Linda Neil, President of the Settlement Company, which has representatives in Los Cabos, Monterrey and San Miguel del Allende, Mexico.

This article is based upon legal opinions, current practices and the experience of Linda Neil. I recommend that each potential buyer conduct his own due diligence and review.