Martinez y Asociados

Thinking of buying a home or condo in Puerto Vallarta Mexico? 

Then make the safe choice by contacting our associate Real Estate Brokerage and feel 100% reassured that

you're in safe hands.

Meet my sisters, Beatrice on the left and Patricia on the right. Click their photo                

                              Beatrice Martinez Jones & Patty Carranza Jones                and me, Frank Jones

Buying real estate in Mexico, The Real Estate Transaction

by
Juan José Martínez Alarcón
Real Estate Broker since 1989
juanjose@myhomevallarta.com 
myhomevallarta@prodigy.net.mx 

Now that you have chosen a property, there are three points that you need to know:


THE LAND TRUST

While many aspects of buying a home in Mexico look and feel like buying a home in the United States (U.S.) or Canada here it is governed by civil law (as opposed to common law as in U.S. or Canada).

The manner in which you purchase a property in México is a little different from that which you are accustomed to. It is not better or worse, it is just different. As you probably already know, foreigners purchasing residential property in the coastal and border regions of Mexico must hold their properties through a land trust (Fideicomiso).

The Fideicomiso is essentially a recorded contractual arrangement. It is very similar to a trust commonly used in the United States and Canada to hold property for estate planning.

Contrary to the commonly held misconception, this Mexican Trust (Fideicomiso) is not a lease; it is a form of ownership in which real property is transferred into a trust for the benefit of the Beneficiary (the Purchaser)

The Mexican Fideicomiso -which we commonly refer to as the Trust- involves three parties: the Trustor, the Trustee, and the Beneficiary.

As the Beneficiary of the trust, you will enjoy all attributes of ownership including use and enjoyment of the property, the ability to make improvements, obtain financing using the property in Fedeicomiso as collateral, selling or renting, and retaining all net profits from said property.

As an additional benefit, the trust allows the beneficiary to assign one or more substitute beneficiaries as a part of their estate planning. In doing so upon death of the primary beneficiary, the trust automatically reverts to the benefit of the designated substitute beneficiary -without going through the probate process.

The Trustor is the individual or entity that creates the trust (in most cases this is the original Mexican landowner or Seller or Developer). The trust is irrevocable, so once the trust is incorporated, the Trustor will have no power to change any part of the trust.

The Trustee is a Mexican bank authorized to act in such capacity under the General Law of Credit Institutions in Mexico.

Such banking institutions are strictly regulated and controlled by the Ministry of Finance, the Ministery of Foreign Affairs, the Bank of Mexico (the equivalent of the US Federal Reserve) and the National Banking Commission.

A Trustee may not be a Beneficiary of the Fideicomiso.

The Fedeicomiso is set up for 50 years, renewable. The Trustee normally charges a service fee of about $350.US to $600.US per year to manage the Fedeicomiso. The Trustee will also review and approve the final document that will become the Deed ( refered to in spanish as the Escritura) before it is recorded by the Notario.

THE NOTARIO PÚBLICO

Mexican law establishes that the elaboration of the Deed and the recording of all real estate purchases must be processed by a specialized Mexican attorney, a Notario Público.

Notarios are licensed by the State government and are strictly regulated.

They are responsible before fiscal authorities for the collection of all taxes involved in a real estate sale and for the recording and registration of the real estate transaction.

The Notarios role is to represent the public interest as opposed to those of a particular party.

Before the contracting parties go before a Notario to sign the Deed / Escritura, the Notario would have already conducted a title search and correlated all needed documents. Afterwards he will Seal and Register the Deed in the Public Registry Office.

Closing Costs

Closing Cost varies according the value of your purchase. They vary from 3 to 5 % of the value of the house. For an itemized estimate of your closing cost feel free to contact me. These costs include the Property Transfer Tax,

the cost of recording your public deed ,certifications of no property taxes in arrears, certification of no liens or encumbrances, permits from the foreign affairs office to set up a trust, registration of the trust in the office of Foreign Investments, Trust fees, Notary fees, etc. All of the above is done by the Notary's office on your behalf.

As your real estate agent, I work on your behalf in close contact with the Notary to make purchasing a home in Puerto Vallarta a simple and easy process for you.

If you have any further questions, don’t hesitate to contact me.


My email address is juanjose@myhomevallarta.com
JUAN JOSÉ MARTÍNEZALARCÓN
Real Estate Broker since1989
Puerto Vallarta-RivieraNayarit

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