If you have found a property you would like to purchase, and you want a good offer, I have a few recommendations to minimize problems buying Mexico real estate.
First, your offer should include plenty of time for you to conduct due diligence, an inspection, or resolve any other concerns you may have. Beware of having to put your deposit into the escrow company before these issues are resolved.
Mexico does not require funds to be put up by the buyer in order to have a binding offer. In fact, the country does not require escrow. But for you, as a foreign buyer, these two issues are important to understand for your safety.
You can put your escrow deposit into the title company once you have accepted the results of your due diligence. Don’t be convinced to do otherwise by an agent who doesn´t know the facts. This might be a way to get you to comply faster, but you do not need to send money in advance of diligence on your behalf.
If you withdraw from the offer, then you don´t have to fight to get your funds back from the escrow. Many times, the title company may require your signature and the sellers. This is to protect this company from legal issues, but it may take a lot of time and the procedures are not the same as you would expect.
You would send the second deposit, or balance of the purchase price, into the escrow company several days ahead of closing.
Title insurance is also offered, so you will have to decide if you want to pay for this.
Insurance is not required for a purchase, or for a mortgage. It is optional. Be sure to check with your attorney or notary if there are issues, which warrant insurance. Some of the reasons to buy insurance are: The property is adjoining the federal maritime zone, is over US$1 million purchase price, or research discovers the property has had problems in the past.
Ask how the process is different from what you have experienced in your home country. With so much information available to us, we can become overwhelmed with details and start relying on our prior experience. In this day and time, we have to be aware of the lack of knowledge and dishonesty from some of the people working with us.
Buying real estate is a very serious step to take in any country, even in your own. For real estate in Mexico, you need a new set of glasses.
This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.