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Everything you need to know before buying a property in Mexico

Investing

October 28, 2019

Buying a property is an investment. Regardless of the purpose for which you want to acquire or the type of property you have in mind, it’s very important that you make the decision thinking about your purchase as a long-term investment that should bring benefits and not problems.

We had already talked about this in our post 10 tips for investing in real estate and not dying in the attempt, you should think and manage your investment in real estate as a business. So it’s necessary that you analyze certain details of your purchase carefully.

The area, the market, the amenities, etc., are important factors that will help you define if you are making a good investment or not. Also if you been thinking about making a purchase out of your state, or if you are a foreigner who is considering investing in Mexico.

It’s important to mention that something has characterized Mexico in recent years is the increase in real estate investment.

Investors little by little begin to value and see the potential of real estate in our country and not only in big cities like Mexico City, Guadalajara or Monterrey.

Tulum, Playa del Carmen and Merida have become one of the most interesting places for those who wants to grow their money in cities with a wide range of tourism possibilities and urban growth.

However, it doesn’t matter in which part of the country you make your investment, you need to bear in mind that buying a property requires more than just having the money ready to invest, so if you are seriously thinking about doing it,

Then we share you this article with everything what you should know before buying a property in Mexico, to make your experience as pleasant as possible and to ensure your future without worries.

Everything you need to know before buying a property in Mexico

Before buying

It’s a fact that buying a property is a guaranteed investment, but you must consider that for this to happen you must really analyze the market and the area where you intend to acquire it.

Many times we let ourselves be guided by emotions and we end up buying a property that seems very nice, but in an area that in the long term will not generate profits caused by the low surplus value it has, because it's located in a bad area where there is difficult access and doesn't have services like water or electricity, another reason is that there are no important services such as hospitals or schools that guarantee a real investment opportunity, this factors can affect when you want to sell the property, people will not want to pay the amount what are you asking for the disadvantages of the area.

Everything you need to know before buying a property in Mexico

Sometimes it looks like an apparent great opportunity for buy a property but the area where it’s located or the conditions of the property will eventually generate more expenses than profits, either for repairs, or because in 10 years the value of your home It will be less than what it cost you.

Even when your intention is to buy a house to inhabit it and not to generate a constant flow of money like when you renting it. You can't put aside the fact that you are making an investment.

It’s very common to think of our houses as something for a lifetime but the reality is that this affection to a property will not let us seeing investment opportunities. Think of your house as insurance for your future that tomorrow you can sell a better price.

Now you have in mind all the information that we gave you, it's time to move on and mention everything that you need to know before buying a property in Mexico.

The notary

Before we talk about the documentation, the first thing you should think about is a notary.

A notary is a public official whose mission is to give legality to the purchase sale that is being made, as this he will be responsible for checking both documents are in order, your documents and the documents your seller gives you, so the purchase-sale it will have a seal of legal security, this is a guarantee that the entire process was legal.

The notary serves as the authority that is responsible for giving an accuracy of the process more than only reviewing the documents. The notary needs to be sure about basic things like the person who is doing all the process is really the person who says he/she is until they obtain the certificate of assessment of freedom of the property and establish the form of how the payment would be.

A lawyer, in short, is the one who will give faith and legality to your purchase, so that both parts feel safe and satisfied with the results of the purchase-sale.

Everything you need to know before buying a property in Mexico
Is necessary to count with the presence of a notary that gives legality to the purchase - sale that you're doing.

The documentation

There are many ways which you can acquire property. You can buy a brand new house or buy one that already has an owner. In both options, you can use the services of a real estate agency that works as an intermediary and also you can make directly the deal with them.

It’s not about that is a good or bad way to do it but the truth is when a professional help you with the process is easier, especially because there is some documentation that must be in order before you encourage to close the deal.

Having the help of an expert can make your buying process much easier and less stressful, especially when it comes to your first investment.

That's why one of the advantages of buying a property through a real estate is if the property is new as a house or a lot there are no intermediaries and the deal is direct, besides that the property papers are in order and you only have to worry about taking the documents that belong to you.

No matter what type of purchase you plan, these are the documents you must review before acquiring property in Mexico. Check that they are in order, remember that it is your money, so you shouldn’t be afraid to say no if any paper is not in order or the previously established agreements are not fulfilled.

Credit authorization letter

This is in case you have a mortgage with a bank. Even when accessing the Infonavit or Fovissste benefits, it’s necessary to present this letter to your notary.

This is a guarantee for the person who sells you the property, since you are checking that you have the resources to make the transaction.

Valid appraisal of the property

This document guarantees the current price of the property. We know that one of the advantages of real estate is that they increase their value, that’s why at the moment of purchase, this document is important because it guarantees that the price you are going to pay it is the price that the property must keep throughout the transaction.

Imagine that you are going to pay it for three years, but in those three years the property increased it’s value. It would be profitable for the seller to adjust the price of the property according to the market, however, it would be unfair for you because you bought it when it cost a certain amount.

The current appraisal of the property will serve as a reference to establish a price, which can also be used to establish the amount of your bank credit.

Certificated of freedom of encumbrance

This document can be obtained at the Public Registry of Property, and usually the notary can take care of this process.

The objective of this certificate is to verify that the property you are going to sell is free of debts and is free to be sold. This is because real estate usually serve as payment guarantees, so if the property you intend to buy is not free, it cannot be sold, so you will not be able to acquire it.

Everything you need to know before buying a property in Mexico
Having a notary can help you to obtain documents like the certificate of freedom of encumbrance.

Proof of payment of water and property

As well as the freedom of encumbrance, it’s necessary that you have proof of payment of water and property of the last 5 years to prove that there are no debts.

This is more common in homes that are not new and it being resold. It’s very important that you check the property is up to date with these payments because, if in the future you want to sell it, you will avoid many problems and bad surprises.

Title of property or Deed

The deed or title of the property, as it’s name indicates, is the document that officially endorses and accredits the ownership of the property, is the legal document that guarantees that you are the owner of the house.

The notary is in charge of being present when the signature is made, he is who enters the deeds to the Public Registry of Property to appear with the name of the new owner.

Is important that you count with your deed, so you should ask for a copy of it.

Official identification

It is necessary that both you and the seller have an official and current identification.

Another factor that you should consider is that if the new deed as the previous one will be acquired through joint property, is necessary to have the identification of the spouses.

Marriage certificates

As we mentioned in the previous point, if the property is wanted to be acquired by joint property is necessary that the marriage certificate be presented.

This also applies to those who are going to sell the property. It doesn’t matter if the deed will be in the name of one person, if they are married under joint property, the marriage certificates must be presented.

Other elements that you should consider before buying a property in Mexico

As you may have noticed, the main objective of having all these documents is to guarantee the legality of the purchase-sale. Maybe for some people the procedures may seem tedious but they are very necessary to have a successful acquisition. That is why before starting the process is important that you have the presence of an expert to guide you through all the procedures.

In the beginning we mentioned that experienced real estate agents usually have trained personnel to help you in this process and even they can do these procedures for you.

It’s necessary that before buying establish dates and forms of payment. The notary is in charge of informing you when you should go to sign the deed and give legality to the payment and the type of financing.

For this reason, the notary must inform you of the type of tax that must be paid and inform the SAT.

You should also bear in mind that, as we mentioned in previous points, regardless of whose name the deeds will come from, when you are married under the joint property regime, the payment and the rights of the property will be of the spouses, so that if you are married under that regime you should talk and consult with your partner before making a decision because the debt will be in the name of both.

Now that you are aware of everything you need to know before buying a property in Mexico, we hope you have a successful transaction and start to investing in your future as soon as possible, remember that one of the keys to real estate is the presale and that the best time to find your next investment is now.

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