The Mexico real estate market has been trying to identify itself as a major force in the international real estate industry for several years. Concentrating most of its developments in coastal cities, Mexico has been attracting vacationers (especially retirees) who want a home away from home year-round. With real estate prices considerably lower than other major markets, such as the United States, Mexico’s market continues to grow.
However, until recently, Mexico had a negative image that portrayed the cultural country as being unsafe for foreign real estate owners and investors. Now, U.S. real estate companies are offering legal title and mortgage services across the border, which is creating a comfort level that Mexico is pleased to accept.
The October 12, 2006 article, “Mexico's Baja Tempts U.S. Buyers With Beaches, Title Insurance,” written by Thomas Black for Bloomberg.com, explains how U.S. title companies are helping Mexico develop their foreign market, starting with the most desired vacation destinations.
Lynn Feenaughty, “part of a wave of U.S. buyers in new coastal communities, made the $201,000 leap of faith into an undeveloped area [in Loreto] last year after Mexico relaxed foreign-investment laws and U.S. companies began offering escrow service and title insurance, reducing risks.”
Individual U.S. investors, such as Feenaughty, are purchasing Mexico real estate more frequently since the area has welcomed new, safer regulations on foreign real estate purchasing.
Mexico’s new image as being a safe and inviting real estate developing area is now attracting premier developers such as Donald Trump, David Butterfield and John Fair. The primary concentration of new developments is on the Baja peninsula.
Golf courses, marinas and shopping centers are becoming prevalent in just about every Baja community in an attempt to appeal to American retirees and vacation-home buyers, said Donald Trump Jr., vice president of development for Trump Organization Inc. “‘People in the U.S. can't afford oceanfront property anymore,’ Trump said. ‘In Baja, you can get oceanfront for a fraction of the price.’”
A Mexican law change in 1994 made this new dominant market possible by allowing foreigners to have complete real estate ownership through trust funds.
“Title insurance and third-party management of escrow followed, and now U.S. bank financing is more easily available.”
The most important improvement in Mexico real estate that has instilled foreign buyer confidence is the emergence of title insurance through U.S. companies.
“Investors had problems in the past with poor record-keeping on land Mexico granted to farmers, leading to title disputes and fraud allegations. Many have vivid memories of October 2000, when Mexican police forced scores of Americans from their homes in the Baja community of Punta Banda after the residents lost a
property dispute in court.”
Horror stories like this will no longer happen as real estate owners can now obtain a legal Mexico title from a company that conducts business both in Mexico and the U.S., like Lyons Enterprises Incorporated and LEI Mexico. LEI Mexico also offers foreign investors several loan options in either pesos or U.S. currency.
Development of Mexico real estate is now taking off. “At Loreto Bay, 700 miles south of San Diego, Butterfield plans to build 6,000 homes in 15 years on 3,200 acres, along with shops, restaurants and a golf course.”
Not to be outdone by his competitor, “Fair plans to begin construction this month on
800 houses and condominiums, a golf course, shopping center and marina in a $285 million first phase of Paraiso del Mar, on 1,800 acres in La Paz, a port city near the peninsula's southern tip.”
The Mexico real estate market is gaining strength every day, which is great news for U.S. investors who have been waiting patiently during a sliding U.S. market.
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