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Particularly with properties in Restricted Areas of Mexico, it is important to have a lawyer as you start the negotiating process. Click here for more information on restricted vs. non-restricted properties.

A lawyer will spot early hang-ups that could make the purchase impossible later on, but they’ll also formalize- or “contractualize” – the agreement made through the private negotiations that precede the formal property transfer.

Necessary components of the private negotiation process – which precedes the public Formalization process – include the following. These are all things that should be agreed upon in the private process:

1. The agreed upon price
2. The time necessary to close
3. The method of payment (wire or bank transfer)
   
4. Currency
5. Documentation
6. Down payment

Once all of these are agreed to you can go on to the Formalization process.

If you are purchasing in a restricted zone, you’ll need to set up the fideicomiso. Click here for the steps and costs necessary to the Fideicomiso trust or here for a more general description.

You or your lawyer will get a quote from the Notario Publico. Do not confuse the Mexican Notario with the Notary Public you find in Common Law legal systems. A Notario Publico is a state-appointed public official in Mexico. Mexican Notario Publicos are lawyers and all official transactions relating to property transfers and sales are done through the Notario. Most real estate agents in Mexico work regularly with a Notario because one of the Notorio’s primary functions is to check real estate titles, powers of attorney, bylaws of companies, wills, deeds, and establishments of trusts for any sort of legal inconsistencies.

Most lawyers have a Notario that they work with regularly. The quote should include:

1. Taxes and fees
2. Appraisal
3. Cost of registering
4. Fees for the Trustees and permits

For real estate titles that means the Notario is looking for:

1. liens and debts
2. back taxes
3. fraud of any kind
4. recording errors
5. encroachments
6. Any other type of misrepresentation

This requires a bit of research but it is important that it be done thoroughly and professionally.

Usually you’ll need to pay all or part of the Notario’s fee up front, before delivering any documentation.

Documents necessary are:

1. Those necesary to prove residency and identity
2. Proof of  title ownership
3. The tax standing of the property being transferred
4. Details of the beneficiaries (including a substitute) of the trust that’s been set up

The Notario may ask for other documentation, such as residency papers, but by and large, the more difficult task will fall to the seller, as it is the existing title that will need to be researched – and documentation there can be more extensive.

The process of compiling the documentation will require the presence of a lawyer who has ensured that the documentation submitted is complete. The Notario must now apply for a permit from the Foreign Affairs Ministry. The permit should take about 3 weeks to be received.

With that permit in hand, the Notario will collect the documentation, including the fideicomiso details, into one place and all parties get a chance to review and revise the transaction. When the parties agree, the Notario will sign the deed and payment must be made. Then the property is transferred and all other payments must be settled.

At this point you should request a notarized copy of the deed. The copy can serve as a property title in some situations, and is important because the next step will likely take between 1 and 3 months when the actual title and other documents will be in the hands of the Notario. The Notario will keep the official title on file anyway. So it is important to get a substitute as soon as it is available.

Finally the Notario must communicate the transaction with the public registry and report the closing.

The Buyer then gets a Testimonio from the Notario. This is the legal documentation proving that transaction was legal, that the taxes were paid, and that it was registered with the Public Registry.

To ease the process of a future sales sale of the property, all of the tax records, and electricity, water and telephone should be put into the names of the new owners and/or the name of the bank holding the trust as soon as possible and good records of them should be kept as long as there is any plan to sell.
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