Basic procedure for purchasing property in Mexico:
- When you find a property you would like to buy, we will make a Letter of Intent , which will list the offering price, any contingencies, the amount of deposit (usually 10% of the purchase price), a list of what will be included in the sale, and to have all legal documents reviewed by Buyer's attorney or Notary. When both parties have agreed to a price and sign the Letter of Intent, we can begin drafting the Sales Contract.
- The Sales Contract is essentially an extended, legally binding, version of the Proposal to Purchase. It lists the price, contingencies, deposit amount, and penalty clause, in case either party breaks the contract. The contract will also list a closing date, which generally reads that the closing date will be “on or before” an agreed-upon date - usually 30 days. Once this is signed by both parties, all are legally bound by the contract.
- Upon the signing of the contract, you will deposit 10% of the purchase price into an escrow account. The escrow account will be with First American Title Company in the United States. The buyer pays the escrow fee of $550 USD.
- An inventory will be made of all contents of the property, specifying what will stay in the property. This inventory list will be attached to the contract.
- The Buyer has the right have an inspection done of the property for structural, electical, and plumbing. Any repairs or structural/system problems will need to be repaired before the house is sold, which is usually covered by the Seller.
- At closing, the Buyers and Sellers (or their powers of attorney) meet with the Notary for closing. At closing, the deed will be signed by both parties.
- Closing costs and taxes (except for capital gains tax) are the responsibility of the buyer and include the Federal Transfer tax of 2% and the Notary fees which will be approx 3% of the sales price. 50% of the closing costs are paid to the Notary after signing the sales contract and the 50% balance at closing.
- Before closing, the full purchase amount will have been deposited into the escrow account at First American Title . After the signing, we will send a copy of the signed deed to the escrow company, and they will disburse the funds into the seller’s account.
- At that point you own the property. The Notary registers the original Deed with the Public Registry and it is usually ready for you to pick up within 4-6 weeks.
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