Because Mexico is undeniably a cheaper place to live than the United States, many Americans are headed south in search of warm sun, clear water and lower costs of living. Property taxes, building costs, realtor fees and even gasoline are cheaper south of the border, and for Americans on fixed incomes or in telecommuting positions, Mexico might have sufficient allure to draw you south.
Quaint waterfront communities such as Puerto Vallarta and Cancun are particularly attractive for Americans because they provide many of the comforts of home: convenience stores, supermarkets, fast food restaurants, and little pollution. Much of the economy subsists off tourists, which means that many of the vendors and merchants speak English. If you’re buying a home in Mexico, however, waterfront properties present a problem.
The government prohibits Americans, and any non-Mexican residents, from purchasing property within thirty miles of the coast and within sixty miles of the border. This leaves precious little attractive territory for Americans who want to relocate, so you have to purchase title insurance to get around this law. When buying a home in Mexico, make sure title insurance is available; if it isn’t, you should definitely look elsewhere.
Furthermore, Americans are easily duped by the high-pressure sales tactics used by Mexican realtors. You can’t walk into a store or an airport or even a hotel without being bombarded with flyers, brochures and sales spiels. If you’re buying a home in Mexico, don’t listen to the promises of low interest and high resale value. Instead, make intelligent decisions based on an inspection of the properties you are considering.
If you do fall victim to one of these spiels, Mexican law gives you exactly five days to renege. When you exercise your rights in this manner, any deposit you paid will be returned and any contract you sign will be void. Just remember that after those five days expire, you’re out of luck.
You should also know that just because some real estate costs are lower in Mexico doesn’t mean that everything else follows suit. For example, acquisitions fees are much higher in Mexico than in the U.S., and your capital gains on real estate sales include a 30-45% tax for any investment real estate you purchase.
One of the best ways to buy a home in Mexico is to use an American real estate agent. Not only does this eliminate language barriers, but it also ensures that you will have all of the information up front. Most large cities in America employ agents who work with international moves; this way, you won’t have to find representation in Mexico. Furthermore, make sure you’re using a real estate agent you trust to avoid being looped into a bad deal.
Once you decide on a property you’d like to purchase in Mexico, ask for all of the paperwork up front, then Fed-Ex it to your lawyer. Mexican attorneys can be just as shiesty as American ones, so avoid contracts with confusing language and complex legal jargon until your lawyer can sort it out. If you don’t have a professional look it over, you’ll have no idea what you’re signing.
If you are going to use a Mexican attorney and real estate agent, your best bet is to work through the Asociación Mexicana de Profesionales Inmobiliarios, which is the closest thing Mexico has to an organization of professional Realtors, and the Notario Publico. This gives you a better chance of protecting yourself with any real estate transaction.
