Making a home purchase in Mexico
Buying property in Mexico is becoming easier and easier as time passes, although there are important things to understand before buying a home south of the border.
New rules, regulations and financing options have streamlined the process considerably, but every potential homebuyer must remember that although Mexico is close to home, they are still buying in another country. You should take the same precautions you would have with purchasing a home in the U.S. and apply them to the transaction in Mexico.
So before you begin the exciting journey of purchasing property in Mexico, it is helpful to get an understanding of some of their rules and customs associated with a real estate transaction.
An October 22, 2006 article by Ann Brenoff of The Los Angeles Times, “Plunging into Baja,” looks at some of the terminology and history associated with foreigners buying in Mexico.
“The trick to buying a home in Mexico, say those who have done it, is to not leave your brain at the border. The days of writing up deals on bar napkins and sealing them with a handshake and a shot of tequila are over — or should be, experts say.”
There are countless reasons why more and more Americans are not only buying second homes in Mexico, but also making it their retirement spot. The main reason is Americans get a lot more for their money.
“You can buy an oceanfront home in Baja for about one-third of what it would cost 30 minutes north of the border. And that alone was probably enough motivation for the 1.5 million Americans who own homes in Mexico today, according to estimates from the Mexico Assn. of Real Estate Professionals. The number is expected to jump to 12 million within 20 years as more baby boomers retire south of the border.”
Mexico is already the fourth most popular destinations for retirees, according to a study conducted by the American Association of Retired Persons.
There are a lot of rumors and misconceptions about Americans purchasing property in Mexico, but if you gain an understanding of local customs and laws, the process is actually quite simple. All real estate transactions now involve what is call a fideicomiso, or bank trust.
“Since the early '70s, non-Mexicans have been able to purchase coastal and border properties through a Mexican bank trust known as a fideicomiso. The bank — the ‘trustee’ — holds the legal title to the property. The trust ‘beneficiary’ (the foreign buyer) holds all rights and privileges of ownership. The beneficiary has the right to occupy or rent the property, and can transfer the title to any legally qualified person. Beneficiaries can modify the property in accordance with local zoning regulations and receive the full appreciation on the property when it is sold.”
Another thing to understand about making a home purchase in Mexico is that there are numerous players involved, and financing is relatively new. So, unless you are very familiar with local customs, it is best to hire an American real estate agent who specializes in Mexico property to guide you along the way.
“Right now, there are several three- and five-year loans available from U.S. lenders for Mexico purchases.”
Buying property in Mexico can be a great investment and an extraordinary way to spend vacations or retirement; just be sure you do your research first so you know what to expect in advance!
Back to the News
|
