Buying property in Los Cabos, Mexico is easier than you might think. Since most of the Baja Peninsula is so narrow from shore-to-shore, you need to be aware that the Zona Restringida, or the restricted zone, applies to almost all property sales.
This simply means that if you purchase property in Mexico within 50 kilometers (31 miles) of the coast or 100 kilometers (62 miles) of an international land border, and you are not a Mexican citizen, you need to purchase the property through a Mexican Property Trust, or Fideicomiso. The initial term of a Fideicomiso is 50 years, renewable for additional periods of 50 years indefinitely, which provides for long-term control of the asset.
Upon completion of a real estate transaction, the Department of Foreign Affairs in Mexico City issues a permit to the Mexican bank of your choice, allowing the bank to represent the purchaser of the property, thus gaining the rights of ownership. At this time, a Fideicomiso, or trust, is established and the bank places your property into the trust, becoming the trustee of the property, subsequently naming you, the purchaser as the beneficiary of the trust. As the beneficiary of the trust, you hold the same rights as any property owner in the U.S. or Canada. These rights include the right to enjoy, occupy, rent or sell your property, including the right to build on it or otherwise improve it. As the beneficiary, you may also sell the property by instructing the bank to transfer the rights to another qualified purchaser or bequeath the property to an inheritor.
Reputable real estate agencies in Mexico partner with federal and state notaries (specialized attorneys acting on behalf of the state and federal government) for all of the closing process in order to secure a Fideicomiso within approximately 60-to-90 days of an accepted offer, or shorter in some cases.
Most agencies will work with U.S. third-party escrow companies for foreign purchasers in the Los Cabos market to manage all funds. Once the Fideicomiso has been established and your bank has confirmed that the property has been placed in the trust, the purchasing funds are then released from escrow to the seller.
Whether you are a first-time purchaser in Mexico or a seasoned investor, the entire sales process in Los Cabos should be seamless and exciting. Be sure to work with an established real estate advisor to guide you through the purchasing process, and to ensure your purchasing experience is managed professionally, so you can enjoy the entire process.
Enjoy living in Los Cabos!