Warning Signs You Should Not Ignore When Buying Mexican Real Estate
Buying real estate in paradise can be a challenge, as is any financial exchange in a foreign country, it can be confusing and stressful. Dealing with different procedures and laws you need a professional in your corner guiding you through the process for a safe and secure purchase. Be warned by these comments commonly heard during real estate negotiations.
We will provide financing for you!
Buying from a developer that offers you financing? Sounds great, but you may not receive the property title until you have paid off your home. In the meantime, this developer may have financial problems and liens against your new property, and in some cases, the developer never had property title.
I am selling this house for a friend.
Make sure you are dealing with the owner of the property or a person with legitimate power of attorney for the seller. Insist on a copy of the deed before writing up an offer.
Do not worry we will hold your deposit in a safe place.
Insist on a fully insured Escrow Service, which will hold the funds “ In Trust” in a segregated account held in a Canadian or American bank. If you hand over your money, it may end up in the agent’s bank account, not a secure place for your investment.
You Do Not Need a Lawyer; I know a guy!
Do not allow the seller to convince you he has a friend or family member who will take care of your legal matters at a discounted price, only trust your property transfer to a professional real estate attorney. All property title transfers are registered by a Notario, but it is vital that you use a real estate attorney when signing contracts and performing financial transactions, especially buying property. The attorney will do a title search and guarantee title on the property.
Do not worry the Title is in process; we promise you will get it later.
Do not pay for real estate without a good title on the property; there are many stories of foreigners waiting years for the property title and some who never receive the deed.
I have a great deal on some beachfront property!
Cheap ocean front land may be Ejido land, and you will not be able to get title. This property was originally lent to the indigenous people of Mexico by the government, and cannot be sold to foreigners. Again, make sure there is a transferable title on the property.
This property is registered with a low appraisal value; it will reduce your annual taxes.
Be cautious, If the property is sold in the future, you may end up paying capital gains, as your property will show a huge profit when in fact it was due to a low appraisal value at the time of purchase, which saved the seller on his capital gains tax.
The Best Advice
Always work with a reputable local real estate attorney in Mexico. The attorneys at MEXLAW have a working relationship with the local appraisers, bankers, insurance companies, property managers and offer guaranteed property title and escrow services.
Additionally, you will gain from their valuable advice about the tax laws and other financial opportunities.