Rocky Point Exposed
Be Careful, Be Very Careful!
FREQUENTLY ASKED QUESTIONS ABOUT INVESTING IN MEXICO
Based upon the experiences of successful real estate investors, the
following series of questions are of utmost importance in negotiating a
real estate transaction in Mexico. It is incumbent upon you the buyer
to do Due Diligence in the course of the transaction.
Question: Can foreigners really own property in Mexico?

Yes, Americans and other foreigners may obtain direct ownership of property in Mexico. However, under
Mexican law, foreigners cannot own property outright.  Instead, a real estate trust must be set up to hold title on
their behalf, much as a trust is used to hold property for minors, because they can not enter in to contracts.
Question: Who is generally involved in any real estate transaction?

Normally, there are three to four players involved in any real estate transaction in the Rocky Point area.

A real estate company or developer
The buyer's lawyer
A bank
A public notary (Notario)
Question: What about Due Diligence and Obtaining Proper Documentation
When purchasing a property, whether it is a villa, condo, beach front property in
Rocky Point, you must do your homework. Doing your homework includes:

Ascertaining the ownership, status and transferability of the property.
Acquiring title insurance.
Making a physical inspection of the property.
Acquiring a statement of no liens.
Acquiring an appraisal.
Question: Why do I need Title Insurance

It protects the buyer from previously undiscovered circumstances like
liens etc., that may arise to threaten a buyer’s ownership of the property.  
The cost of title insurance ranges from $5-7 per $1000 valuation.  
Question: What about Possession of Title in the Owner’s Name

A person must have rightful ownership with possession of title in his name.  Mere physical possession of the title
document does not determine ownership.  It is important to determine the name of the rightful owner on the title.
However, merely having possession of title and rightful ownership does not mean there is a right to sell the
property.  
Question: Is a "Statement of No Liens" important

A buyer should obtain from the seller a statement of no liens, unpaid taxes, or other encumbrances
on the property better known as a certificado de libertad de gravamen.  A gravamen should include:

A legal description of the property
The owner of record
Boundaries
Surface area

You can expect closing costs for a real estate purchase in Mexico to average around six to eight percent of
the cost of the property.  Some fees are arranged on a flat-fee basis or may be based on a percentage of the
property’s declared value.  The buyer normally is responsible for all fees and acquisition costs.
BE CAREFUL, BE VERY CAREFUL!
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