Home How To GuideBuying Property in Mexico Property in Huatulco: The 5 Steps to Buying Success

Property in Huatulco: The 5 Steps to Buying Success

by Brent May

 

Owning property in Huatulco, Mexico is very easy. Once you have found your perfect property, there are a few steps to follow before you become the owner.

By accumulating some information and listening to good advice, you can buy and secure property in Huatulco quickly and efficiently.

Step #1 – Making a Serious Offer

The first step is to make a serious offer to the seller. You can do so by providing a promise to buy/sell. This letter of intent will define conditions of sale.

 

Step #2 – Signing the Promissory Purchase Agreement

The payment structure is defined in the promissory purchase sales agreement. The buyer must be clear on how they will pay. They will have funds ready and available according to the payment structure.

This agreement defines the percentage of down payment as agreed upon by both parties. Down payment percentages can vary depending on the type of sale: private home, development, predevelopment, etc. A typical down payment may be 20% but could run anywhere from 10 to 60%. If the buyer would like for the property to be taken off the market, a nonrefundable payment can be arranged.

The promissory purchase sales agreement defining payment dates and terms is signed by both parties and becomes a legally binding contract.

 

Step #3 – Finding a Notary

Notaries are used in Mexico for buying and selling property. Notaries have more competencies in Mexico than in Canada and the U.S. They are appointed officials and provide a skillset somewhere between a lawyer and a judge. Notaries must be involved in all real estate transactions in Mexico that are on private land. This ensures a good transaction between the buyer and the seller. 

The buyer chooses the notary as they will pay the closing costs. Closing costs vary by state. In Huatulco, for example, closing costs run 5 to 8% of the purchase price.

Each party is separately introduced to the notary. The contract is then signed. When the notary starts work on the property file, they also start work on the bank trust with a foreign release purchase.

 

Step #4 – Bank Trust (Fideicomiso)

 A bank trust (fideicomiso) is a legal instrument issued by the Mexican Government that allows non-Mexican to acquire properties in the “Restricted Zone” (the limit of 62 miles from the border and 31 miles from the coast).

This legal mechanism is established by a bank and permits foreign investors to buy and sell. It ensures their investment by granting them the same rights and obligations of a Mexican citizen. Fideicomiso beneficiaries have the right to use, lease, inherit, and sell the property to any buyer. A Fideicomiso is established for a period of 50 years, and it is renewable at any time. The implementation of the Fideicomiso is simple and should take from 60 to 90 days to set up.

 

Step #5 – The Closing

The buyer is ready to make the final payment because the property title is ready or the property is ready to hand over. Final payment is sent directly to the seller (a few days before as international transfers can take from 2 to 7 days depending on the intermediaries’ institutions.) Both parties will sign in front of the notary. A Power of Attorney may be designated to sign for a party if they are absent or out of the country. The buyer is responsible for closing costs including property taxes. The seller pays capital gains.

If you have been considering real estate in Mexico and you don’t know where to start, our real estate agents can help you. If you’re curious about financing, read our article on How to Finance Your New Home in Mexico. It will give you detailed information about how to finance your new home down south.

 Contact us today to find out more about the homes and condos for sale in the Oaxaca Coast area.

Read More:

What Bayside’s Real Estate Agents Wish Buyers Knew About the Buying Process in Mexico – Part 1

 

What Bayside’s Real Estate Agents Wish Buyers Knew About the Buying Process in Mexico – Part 2

 

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