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New Mechanisms for Buying Mexican Real Estate:
The country of Mexico is attempting to accommodate foreign investors in the real estate industry. In concert with United States title companies, banks, and appraisers, it is simplifying the process of determining property values, which will make it easier for buyers to purchase property and for lenders to make loans.
Financing
Finally available in Mexico ! Please visit www.FirstMexicoMortgage.com for information or email mailto:
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, or call 1-888-909-6570
Home Equity Loan
A Home Equity Loan, on the buyer's primary dwelling is often the easiest and most affordable way to obtain the necessary funds to purchase a vacation home. In addition, a Form 1099 is usually provided.
Finally, Fractional Ownership, for instance with another family, is another option. A carefully worded contract with explicit shared-use and property-disposal clauses is an absolute necessity.
These are just a few examples of fairly typical financing arrangements. Creative financing arrangments are best left to a finance professional, and as always, it is best to consult an accountant and attorney to verify the appropriateness of the transaction.
Title Insurance
It is now possible to get United States title insurance on some Mexican properties. While this costs more and takes longer, it is worth it to American buyers to ensure peace of mind.
Title searches in Mexico are usually done through a Mexican law firm. The attorneys verify the owner and search for liens, encumbrances, and anything else that could affect the title. Since Mexico's registries are not automated, this can be a lengthy process, taking approximately eight to ten weeks, as opposed to one to five days in the United States. After the search is completed, the Mexican law firm prepares its legal opinion of status of title, which will include owner of record, easements, liens, restrictions, and anything else pertinent to the property ownership. The closing of the transaction is done in the office of the notario, and funds disbursed through escrow.
Computerized Property Valuation
Access to public records is taken for granted in the United States, but comparable sales are not readily available to the public in Mexico. The Mexican MLS is working diligently to make mandatory disclosure of sales prices and terms available to the agents. This will make it possible for real estate agents to do comparative market analysis and determine fairer and more consistent pricing.
Past History and Future Trends
Financing has been available, but many Americans have financed their vacation homes by taking out home equity loans on their property in the United States, thus enabling them to pay cash in Mexico. Recently several American lending companies have made it possible for buyers of Mexican properties to finance their purchases. One key is the Title Guaranty Deed, which has a foreclosure provision similar to the American Deed of Trust. Lenders can now foreclose within 90 days and get their security back. Another key is title insurance, and this concept too is becoming more widely known in Mexico. Since it protects buyers and sellers alike, it is sure to be used increasingly in the future.
Appraisal is also coming to be an accepted practice. Without the computer data base American realtors are used to, it is more difficult to fix a fair price on properties, but appraisers are building up their own databases, and the states of Arizona and Sonora are cooperating to facilitate computer access to property registries in both countries.
All of these developments are making it easier for more Americans to buy property in Mexico, but they must never forget that they are obligated to follow the laws of their host country, Mexico. Knowing what to expect and what pitfalls to avoid should make it more comfortable for them. Knowing American practices should make it clearer to Mexicans what to expect from Americans and why they act the peculiar way they do.
Our focus is on organization and protection of the interests of our clients at all times. We adhere to the strictest of ethical guidelines and always place the interests of our clients above all. We seek to attract and retain the highest quality sales associates in the market area in order to provide high quality client services. Please let us know how we can help you and your investment partners in Mexico ! Realty Executives Cancun, Playa del Carmen, Puerto Vallarta, Cabos san Lucas
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