THE REAL ESTATE INDUSTRY IN MEXICO
THE REAL ESTATE INDUSTRY IN MEXICO
REAL ESTATE PURCHASE IN MEXICO /MAY 2020
The real estate industry in Mexico is similar, in many ways, when compared to that of the United States ( which is most probably the most advanced in the world). It is developing quickly, taking advantage of today’s technology. The only national professional real estate organization in Mexico is the “Asociación Mexicana de Profesionales Inmobiliarios” or “A.M.P.I.” with 24 chapters in 38 cities. This organization is somewhat similar to the national association of realtors (NAR) in the United States.
If you are interested in getting a property in Mexico, having the essential information is crucial, you need to learn how the legal part works and how you can get a property, so here are the glossary words to get started.
LICENSING
At this time, no government license laws are regulating real estate brokerage and sale in Mexico, anybody can, in effect, offer properties for sale and therefore, caution should be taken to search for an established and reputable real estate company. A potential buyer may want to check with the local chamber of commerce or a prominent law firm.
FINANCING
Historically, due to a lack of capital markets and high-interest rates, most transactions were made in cash. In 1993 and 1994, the Mexican economy picked up to such an extent that the annual interest rate decreased to one digit and interest rates were more accessible. Banks introduced attractive mortgage programs and sales proliferated throughout Mexico.
Due to the peso devaluation in December 1994, the present situation has reverted and the few banks that do offer mortgages quote such high variable interest rates that few buyers are in a position to take advantage of them.
The future of financing in Mexico is moving towards a secondary mortgage market, which should open up international financing resources to possible desirable mortgages at reasonable rates for foreign investors, however, this evaluation has created some excellent values for real estate purchases utilizing foreign funds. We expect during the next year or two that additional outside financing will be brought into Mexico for mortgage purposes.
MULTIPLE LISTING SERVICE
A couple of electronic multiple listing services (MLS) are now operating in Mexico. These services will soon be widely offered with state of the art technology, measuring up to the highest standards found in the United States.
NOTARIO PUBLICO OR NOTARY PUBLIC
The notario publico is a government-appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, thus ensuring their proper transfer, furthermore, all powers of attorney, the formation of corporations, wills, official witnessing, etc. are handled and duly registered through the official office of the notario publico. The notario publico is also responsible to the government for the collection of all taxes involved.
ESCROW, TITLE INSURANCE, AND HOME INSURANCE
It is the public notary who, in effect, acts as a “holding agent” for the involved parties, and for this reason, there are few escrow companies in Mexico. At present, there is no general use of title insurance in Mexico, although some American companies are providing coverage in some resort areas of the country. On the other hand, insurance companies do provide full home coverage throughout Mexico.
To find the required property, be it for lease or purchase, it is advisable to contact a reputable real estate company or relocation firm. Otherwise, be prepared to go house hunting by combing the desired areas, on the lookout for lease signs, or by going through all classified advertisements in the newspaper. Be sure to use brokers benefiting from the MLS systems.
You may also want to read: the process of buying real estate in Mexico, How foreigners can own properties in Mexico.
If you’re interested in buying, selling, or renting a property in Mexico, please call the Laguna Shores office at 638-383-0210 ext. 502 from the united states, call 1800-513-1426