One of the first things that I thought when I arrived in Merida was that I was already late to the Mexican real estate party.

There is a large community of expats (ex-Patriots) or foreigners, mainly from the United States and Canada, here in Mexico. They tend to flock to certain neighborhoods, areas and cities in an effort to create a community within a community. They have come for a multitude of reasons, but the greatest is always the value.

Foreigners are buying real estate in Mexico.

This should be comforting to know that you won’t be the first Mexican real estate explorer in the area and that you will be able to slide into community with other English-speakers just as soon as (and if) you like.

Your Yucatan Realtor

The first thing your realtor is going to ask you is what type of property are you looking for? Are you looking for land so that you can build your dream boutique hotel? Do you seek a retirement or winter home? Got cash flow on the brain? Will you buy to rent out on sites like Airbnb? You have options. Knowing your end goal will help your realtor show you relevant Mexican real estate properties.

Can a US citizen own Mexican property?

In 1973, Mexico passed The Foreign Investment Law. Updated in 2015, this law allows foreigners to purchase real estate anywhere in the country except for borderland coastal land 100km of international borders or within 50 km of the coast. The law was amended for purchase within the restricted area through a fideicomiso a trust agreement established with a Mexican Bank in 1993. Long story short…

You can own real estate in Mexico. And you can keep it in your family. The government can never take it away.

This fideicomiso means that a foreign buyer can hold all the rights regarding property of a Mexican citizen, automatically renewable every 50 years. You can give the property to your descendants or transfer the trust to another foreign buyer at your discretion.

Another option is for expats or foreigners to purchase property in a restricted area is through a Mexican corporation. If you are buying Mexican real estate to invest or solely for business, meaning you will not be living here, consider this as an option.

Consider with corporations…

There is a significant amount of paperwork and fees involved with a corporation. You can expect to spend about $50,000 Mexican pesos to set it up with a Mexican attorney. Also consider that you will spend approximately $800 every year for the certified accountant to maintain your corporation.

Reliable attorney is key.

Regardless of the reason as to why you want to buy Mexican real estate, a reliable attorney is an essential part of the process. And there are many who speak English. This attorney should review and prepare documents and contracts, set up your trust or corporation, review your corporation’s legal status and more. Send me a message if you need a recommendation.

Buying Mexican real estate as a foreigner

It seems like this goes without saying in any country but- get it in writing. Mexicans often make verbal agreements and some still live by the handshake, but to avoid any confusion…

Get it in writing.

Your offer is sent using an “offer to purchase” contract. Your attorney will help with this. This document should explain the highlights of the sale including price, payment plans and timeline.

When you make an offer on a piece of property, be prepared to deposit earnest money immediately after the seller has accepted your offer. Also, make sure you read the details of your contract regarding this deposit as sellers occasionally request the deposit to be non-refundable.

Contrato de promesa

The next step is the promissory agreement. This document essentially defines the timeline of the purchase. At this point, both parties understand how long they have to gather the necessary paperwork and when they can expect the deal to close. The promissory agreement is important in Mexican law because it binds both the buyer and the seller to the execution of the sale.

After the promissory agreement is signed, the seller initiates the trust applications. Your attorney will order a trust permit on your behalf from the Ministry of Foreign Affairs.

Let’s do this.

Though all of this may sound overwhelming and complicated- don’t fret. You can do this. The documentation required is quite simple. In most cases you will need a copy of your passport, drivers license, utility bill showing your name and home address, and any corporation documents as they apply. Next, you will then take these documents to a Mexican notary and if everything looks good, your attorney will work with the bank to have the trust documents completed.

The sales agreement.

This includes the transfer of the title to the fideicomiso. At this point, once all the paperwork is in order, you will be notified of a closing date and any costs due. At closing, you will complete final paperwork including deeds and outstanding payments. The property title transfers to the Bank Trust.
With a notarized copy of your deed you can now put utilities in your own name. Y ya!

Congratulations! You are now a Mexican property owner!

PS: If you can’t be in Mexico for the entire process – you have the option to give your power of attorney and let him or her sign on your behalf.