Buying a home in Mexico

So, you’ve visited the Western Caribbean in Mexico a few times now and you are seriously considering purchasing a home here (maybe you have Margarita Fever).  You have not decided if it will be an investment property or your retirement home, but you are willing to start gathering financial information about the process.


After identifying a few reputable real estate agents in your area of interest, you ask the million-dollar question…how do I purchase a home here in Mexico?  As your heart races while you anticipate a response, your brain is in overdrive trying to wrap your head around the fact that you are on your way to home ownership in Mexico.

If you are a foreigner, there are two (2) ways to purchase a property in Mexico.

1. Cash payment.  Identify a property, make an offer, have the

offer accepted, and make an earnest money deposit with the realtor. This deposit does two things. 

First, it lets the current owner know that you are serious about the purchase and you want to take the home off the market so that you are the sole bidder. 

Second, the earnest money deposit starts the process of the official home buying procedure.  Earnest money deposits can range from $5,000 USD to $10,000 USD depending on the property that you are making an offer on.  Keep in mind that this earnest money deposit is only good for ten (10) days.  If you have not started the process of closing, your earnest money deposit will be forfeited.  So, you better be serious, and ready to roll if you do this.

2. Financing.  With this option, you will provide a deposit of

30% of the purchase price of the home.  This deposit will give you between 30 to 60 days to close.  At this point, consider yourself

committed and there is no turning back, unless you are prepared to lose a lot of your money. The remainder of the balance will be due anywhere between one to five years, depending on who you are financing with (developer versus bank, versus private owner).



Additional information:

• Your closing costs are separate from the purchase price and can range between 5 to 10% of the purchase price.

• You will also need to establish a fideicomiso (a trust), which will cost approximately $500 USD.  This is an expense that will also need to be paid annually. 

• If the home you are currently interested in making an offer on has renters, once your offer has been accepted, the current renters have between 30 to 60 days to vacate the premises (depending on their lease agreement).

• There may be additional fees associated with the purchase of your new home.  Work closely with your realtor to ensure that you understand what these fees are.

WELCOME TO PARADISE!


DISCLAIMER: The information posted above was received while recently assisting a friend in obtaining purchasing and financing information about the home buying process in Mexico.  The information you receive may be different.