The closing process and taxes of home ownership in the Yucatan
In the past, we have talked about the house buying process in Mexico. Because Mexican laws are different, if you are a foreigner, it is extremely important to understand the buying process before you get in too deep. Hiring an attorney is your first step after you have found that dream home in paradise for your realtor in Merida.
Once you have found your property, negotiated and signed a contract, paid your earnest money deposit and contracted with an attorney to handle your closing are the next steps. Your attorney will need copies of your passport, visa, the contract and perhaps a power of attorney from you to sign on your behalf.
The ball is now in your attorney’s court to prepare all the necessary documentation for closing. This documentation includes checking to see that there are no debts or liens against the property, the taxes are paid, the land description is correct, and the title is clear and in the name of the seller listed in your contract.
Standard closing time from signing the contract to the actual transfer of title is a process of 4-6 weeks. If there are problems with the title it could take longer. Most foreign buyers wire the proceeds for closing to an earnest money account a few days prior to closing. If the seller wants to be paid in pesos, an exchange process must take place the day before closing. A final closing statement is issued for review by the seller, buyer, agents, attorneys and bank the day before closing. There are no title closing services available in Mexico so the broker acts as a closing agent and disburses funds.
The attorney will provide the buyer with a copy of the certified contract at closing after all signatures are collected. Afterward, the attorney will send the new documents to the office of the Catastro (title company) for recording of the new owner and title. This will then be sent back to the attorney, the seller or the seller’s agent or accountant. The Office of the Catastro is notoriously slow. It is not unusual to wait many months for the new deed.
The closing process in Mexico can be very similar to the process in the United States and at times, it can take a great amount of time longer than in the States, or it can be even easier than in the States. The key is to be patient with the process and allow the attorneys to handle their end of it. Of course, having the right realtors and lawyers and asking questions and staying in the loop never hurt either. Although the home buying process is never a fun one, once you own a little piece of paradise in the Yucatan, it will all have been worth it.
The first step in any home buying process is to first find a great agent that you can trust. Some of the best realtors in Merida come from Merida Property Management. We are a full-service real estate and property management company that has only your best interest in mind.