service providers you Need when you Buy

by doug christensen, broker, cape realty and assoc.

 
Buyer:
Real Estate Agent
Attorney
Title Researcher
Home Inspector
Escrow Agency
Bank Fiduciary
Appraiser
Notary Public
Notary/Secretary of State

    Real estate agents are should be able to help clarify ownership in Mexico under the bank trust and can advise on the various ways to take title, considering succession of beneficiaries under the trust. The agent can help find a property you like and one that makes sense. The agent should have the proper Offer forms, and know how to contact the other professionals needed to proceed. And the agent should be useful in negotiating the best price.

    A Mexican or USA attorney may be advisable to elaborate or review documents like contracts and title reports. Most US attorneys know little about Mexican title transfer process, so if they have to hire a Mexican counterpart it can get more expensive.

    Title Researchers are familiar with the Public Registry of Property and Commerce, and know how to follow the chain of title back as far as it goes. Buyer review and approval of a search should be the first special condition or contingency in an offer, the researcher will charge around $400 US plus IVA tax to provide a full report in English. This search converts into a Title Insurance Commitment in areas where title insurance can be obtained. It will point out any underlying issues that the real estate agent, and or an attorney may be able to resolve prior to closing. If dangerous conditions surface that may not necessarily block the transfer but may put ownership rights in future jeopardy, this is the best money one could have spent- to avoid a problem.

    Home Inspectors can help determine the physical condition of buildings. Sometimes they miss things, but they can also find problems that REALTORS or even owners may have issued that could later cost money. The inspection will cost about $400 US on the average house, and should come with a detailed written report. Acceptance or decline should be put in writing.

    The Escrow Agency is hired under an Escrow Agreement signed by the buyer, Seller and the Escrow Agent. The Escrow Agent acts for the benefit of both parties to hold purchase money and the Disbursement Instructions of the sale proceeds executed by both parties until it receives a copy of the finalized deed from the Mexican Notary Public. It then disburses the money as instructed by the parties. There are some private companies and banks in Mexico that act in this capacity. We recommend the bank variety- Monex and Intercam are a couple of these that have banking industry standards to meet.

    The Fiduciary Bank is the foreigner’s face to the Mexican Constitution in ownership. Article 22 states that a foreigner may not hold direct title to real estate within the restricted zone (50 km from beach and 100 km from borders). So the foreign Beneficiary will need a Mexican banking institution that has a Trust Department with a fiduciary officer to act as the Trustee when the Mexican or other Trustor grants title. What the foreigner will actually own is a beneficial interest of use and enjoyment of the property held in the Trust contract, with the right to benefits of sale or rent of the property. The bank should be selected on the advice of a REALTOR based on its service and fees. Some are much better than others.

    An Appraiser is required to perform a valuation of every property that changes hands. He works on the advice of who hires him. He sets the valuation within the limits of tables set by the Municipality. He gets paid from $350-1000 US depending upon what he is asked to do and who asks him to do it. There are four types of appraisal- Commercial, Assessor’s (Cadastral), Bank Loan (Bancario) and Fiscal. The property is to be registered at the highest value of either the purchase and sale contractor or the appraisal. The advice of a REALTOR or attorney is useful in determining that you are getting the correct type of appraisal.

    Notary in Mexico means more than a witness of signatures, but an attorney who is responsible for the legal and fiscal content of your deed (escritura) or Trust (Fideicomiso). His signature and seal are required on all documents that enter the Public Registry of Property and Commerce in the local municipality. Notaries can be State certified (Notario Publico) or Federal (Corredor Publico). The Notary will elaborate the actual document that becomes your title using data extracted from the current title and its supporting documentation and your purchase contract or avaluo. There are many Notaries in our state. Your REALTOR and attorney can advise about which one to use in your case. The fee is based on the value and is rarely less than $1500 US, about $3500 on a Million Dollar transaction and up from there.








    A US Notary Public or Secretary of State’s office action may be required if documents will be signed or certified in a foreign country and sent to Mexico. These would be instruments like Powers of Attorney, Corporate Resolutions or Death Certificates. Signatures witnessed by a US Notary or certified documents must also bear an International Acknowledgement called an Apostille, which is applied by the Secretary of State of the US State in question. This takes an extra week or more to obtain. Your REALTOR can advise how to get it done most quickly.

    Buying a property involves a lot of people. Be ready for closing costs of about 5-6 % of value on average transactions. A very low price may increase the percentage to 1`0%. A very high value will lower the percentage to maybe below 4%. Many of the professional fees will be tax deductible against any future taxes on gains you may realize upon sale.

Contact Doug Christensen, Broker of Cape Realty and Associates at (624) 147-5516, dooglaspi@prodigy.net.mx