Buying a home in Mexico is not rocket science. Buying a home in San Miguel, or any other community with many foreigners, is quite easy.
“You can’t own a home outright in Mexico. You can only pay for it and a bank trust will own it.” I’ve heard this inaccurate statement hundreds of times. Please know that buying property in Mexico is very easy. The false statement above alludes to property by the beaches and borders and is totally irrelevant to 99% of the land in Mexico.
In San Miguel de Allende where I live, most of the property transactions go without a hitch.
Because so many people have asked me about purchasing a home in San Miguel de Allende, I thought I’d outline the basics here:
1) Tourists can buy property without the requirement of living in Mexico.
2) All real estate transactions are done through a “notario publico”. A “notario” is NOT the equivalent of a notary public in the U.S.On the contrary, being a notario is an important position and notarios are appointed by the governor of each state. Notarios are lawyers. Every legal document in Mexico must be made by a notario.
3) The buyer always is the one to choose the notario (lawyer) for the transaction. No other lawyer is necessary. Neither the seller nor the realtor has the right to select the notario and usually a seller does not even have representation. The best way to find a notario is by asking residents who own homes.It is not always the best option to ask the realtor who represents the seller. Ask a lot of people!
As the buyer is the one choosing the notario, he is also the one paying for all the costs, except, of course, the capital gains tax for which the seller is responsible.
4) It is the law that should the buyer not speak Spanish, he is to have a translator present for the transactions. Translators are very easy to find.
5) The seller presents his escritora (deed) to the notario, as well as an up-to-date tax receipt. The notario willadvise the seller as to the amount of his capital gains tax.
6) At this point an agreement to sell and buy is drawn up(a contracta privado) which notes the cost of the property, the amount of the deposit given by the buyer to the seller and the conditions of the sale (ie: the date that the property will be finalized and paid for.)
7) The notario will apply for “permission to buy property in Mexico” for the buyer. This is currently the equivalent of about $500 US. It is a standard form and the “permiso” will be granted within 7 to 10 days.
8) Meanwhile, during the time between the signing of the private contract and the final signing of the deed, the notario will confirm that there are no liens against the house. A date will be set for the transfer of the deed. After the deal is made and paid for, the notario will register the deed in the Public Registry and the official escritora (deed) will be available for delivery within a week or two.
Lots of people come to San Miguel for a week, start looking at houses on the third day and find one on the last day! So the question often is, “How can I do this from home in Cincinnati?”The answer is that you can hire a translator and give her/him a power of attorney so that he can continue in the process as outlined above. A power of attorney is, of course, drawn up by a notario and can be limited to dealings with the house.
Another question that prospective buyers have is, “How do I get money transferred from my bank account in the US to a bank or trading house in Mexico?” Prior to leaving Mexico you should register with a place like Intercam or Monex or Lloyds and set up an account. You transfer money from your US account to the new account in Mexico by email.Then whenever you need money for the power of attorney you email an employee of one of these institutions asking them to release money to your power of attorney.
Title insurance is something we in the states wouldn’t dream of not having. This is a relatively new idea in Mexico and is rarely, rarely done. The notario’s job is to check with the city and make sure that there are no liens. Of course, if one is worried, one can get title insurance easily.
It is important to note that all money handed over throughout the buying process should go through the notario, not directly to the seller. This is always the safest route.
Caren Cross is a former psychotherapist who, after a one-week vacation in Mexico, decided to retire ten years earlier than planned. She is the director of the documentary film, Lost and Found in Mexico.www.lostandfoundinmexico.com