Legal Titled Closing
BROOKE KINDER REALTY
PUBLIC REGISTRY
BANK TRUST / FIDEICOMISO
Direct ownership of real estate within Mexico’s ‘restricted zone,’ as outlined in Article 27 of the Mexican Constitution, is not allowed for foreigners.
This restricted zone encompasses all land within 100 kilometers of any Mexican border and within 50 kilometers of any Mexican coastline. To facilitate foreign investment in these areas, the Mexican government introduced the “Fideicomiso,” (FEE-DAY-E-CO-ME-SO), essentially translated as BANK TRUSTS.
Under this arrangement, a Mexican bank serves as the trustee, holding the title in a trust for investors. Bank Trusts empower foreigners to fully utilize beachfront properties for improvements, expansions, and to capitalize on the sale or rental of the property without encountering restrictions.
ESCROW
Brooke Kinder Realty follows the US escrow account procedures, employing an unbiased third party, specifically an escrow company. This impartial entity is responsible for ensuring that the transfer of ownership, as outlined in the mutually agreed-upon written contract, occurs seamlessly between the seller and the buyer.
The escrow agent securely holds any funds until all conditions specified in the agreement are met. Subsequently, in accordance with the escrow agreement signed by both the buyer and seller, the agent disburses the funds to the designated parties at the stipulated time.
CLOSING COSTS
Typically, the buyer covers the acquisition tax and their individual closing expenses, encompassing Notary fees and related costs.
The seller is responsible for their capital gains tax and the commission for the broker.
FEES RELATED TO BUYING IN MEXICO
Closing costs for purchasing property in Mexico tend to be higher than those in the USA or Canada. However, once you own your property, you’ll discover that expenses such as property taxes, utilities, groceries, maids, labor, and general living costs in Mexico are surprisingly affordable.
Leveraging our expertise, we’ll guide you through the relevant closing costs and work to minimize them wherever possible. Anticipate closing costs ranging from 6% to 8% of the recorded sales price, covering items such as the Catastral Appraisal Fee, Escrow Fee, Recording Fees, Tax Status Research Fee, Acquisition Tax, Fideicomiso Fees, Closing Coordination Fee, Notary Public Fee, and Attorney fee.
Typically, you’ll receive your estimated closing costs four days after opening escrow. Following this, you’ll wire your down payment to escrow and subsequently receive your legal purchase contract for review and signature.
NOTARY DUTIES / NOTARIOS
Throughout the real estate purchase process, the Notario Publico plays a crucial role in authenticating all legal documents, overseeing the transfer of title, calculating capital gains tax, and ratifying all real estate transactions in Mexico. It’s important to note that if a real estate transaction is not recorded in the Public Registry by a Notario, it is not considered valid.
While a Notario is indeed a lawyer, their role in this context is neutral. Despite working for the buyer, the seller, and the government, we strongly recommend also engaging a lawyer to advocate for your specific interests.
Your lawyer will ensure there are no human or legal errors, validate the proper registration of your property title, and verify taxes and utilities, providing an additional layer of protection for your investment.
