For many years, foreign investors found it difficult, if not impossible, to make a secure property purchase in Mexico. Laws restricted what foreign investors could do, and there was no good way to ensure that the seller of the property was the legal owner. With changes to Mexican law regarding foreign property ownership, the process of purchasing Mexico real estate is much more like purchasing property in the US than ever before.

Not all properties are sold with title insurance, so that should be the first thing you look for, as a buyer of Mexico real estate. If you cannot get title insurance, or the property owner says you don’t need it, think twice about buying the property. As a purchaser, it’s very important to follow the procedures established by the government when it comes to Mexico property sales.

Mortgages are still relatively new in Mexico, and many land sales are still executed with cash. The concept of an escrow account is foreign, in more ways than one! Some buyers are beginning to incorporate escrow accounts into sales transactions, but don’t be alarmed if your transaction doesn’t involve an escrow account. The money to purchase the land isn’t released to the seller all at once, but rather at certain points in the transaction. Your purchase contract will spell out when funds will be released to the seller while the sales transaction is concluded. It may take several weeks to conclude a property sale.

Since Puerto Vallarta falls within the coastal zone, all Puerto Vallarta property purchased by non-Mexican citizens will be held in trust, in a fideicomiso. Mexican law makes no exception to this rule and this is the only way in which foreign owners can hold property. The fideicomiso is a very safe type of ownership and is frequently used by Mexican citizens as well. In a fideicomiso, a bank of the purchaser’s choosing holds the deed to the property and acts as a trustee in the sole interest of the beneficiary-owner. A fideicomiso is established for 50 years and can automatically be renewed for another 50-year term. A property sale doesn’t have to extinguish an existing trust. Sellers can simply designate a new beneficiary-owner, who will receive the remainder of the fideicomiso, and can then renew it at expiration.

If you would like more information about the safety of ownership for Puerto Vallarta property, mortgage lenders or real estate purchases, please contact a Select Mexico Properties sales representative today. We can provide you with the information you need to get started on your purchase of Mexico real estate.

Photo Credit: Lisa Kong