Increasing regulations and bureaucracy is changing the real estate buying process in Lake Chapala. Having the knowledge in preparing for your move and for purchasing real estate can help save you time, money and a lot of headache. At Retire In Lake Chapala, we are all about helping to inform you so that you can make intelligent decisions and be proactive about what all needs to be done in your move to Mexico. From knowing which Visa you should apply for to being prepared with the proper documents when purchasing a home, it all comes down to planning and preparation.
So what's new in real estate transactions and how should you prepare?
Escrow
While not new to Mexico, escrow is new to the Lake Chapala real estate market, and thank goodness that buyers and sellers can now have piece of mind that their money is secured and insured by a third party. You have the option of picking your own escrow company or you can rely on one of our highly recommended companies.
An additional benefit to U.S purchasers is that the money never enters Mexico, thereby eliminating the need to make International wires which can often be problematic to U.S and Canadian banks.
Increased Documentation
Due to a crack down by the Mexican government on anti-money laundering, SAT (the Mexican version of the IRS) is demanding more and more identity verification. What is now the norm?
2 pieces of picture identification per person - This must be a passport and....either a drivers license or Mexican Temporary/Permanent Visa card.
Buyer Proof Of Address - This must be a utility bill with your full name identical to your passport. (you can prepare this ahead of time by contacting your utility company)
Marriage Certificate - While not necessary, it is a good idea to have it with you to purchase property as a married couple. In the future it may be necessary to have it apostilled but as of right now this is not a requirement.
Updated Buying Process For 2024
So what is the new buying process for purchasing property in Lake Chapala? Let's review the current process.
Find a home you love and make an offer. The two most important points in the contract are price and closing date (note that all buyers on the contract must be present at the Notario's office for closing). Offers generally have one contingency clause for home inspection.
(The buyer will pay 3-4% closing cost on top of the agreed upon price to pay for land transfer tax, Notario and escrow costs)
Once an agreed upon price is accepted and signed by both parties, we'll take scans of your documents and you'll fill out a form with your personal information.
We'll arrange for an inspector to inspect the home. After inspection you will have 7 days to review the report for major structural, electrical and plumbing issues. Once approved, you will sign a contingency release and you will have 5 working days to wire a 10% deposit (plus $750 for escrow) to the U.S based escrow company's bank. (The escrow fee is part of your 3-4% closing cost)
You will then need to sign an anti-money laundering form; a form for Profeco (the Better Business Bureau of Mexico) stating that you did your due diligence; and finally both parties will sign an agreement for the escrow company.
Five days before the closing date, you must have the remaining 90% of the purchase price in the escrow company's account.
Three days before closing, you must be present in Lake Chapala to meet with the Notario and sign SRE's (important documents/permits which allow you as a foreigner to purchase property in Mexico. This vital document also ensures that you are protected by the same laws as a Mexican citizen when it comes to property rights.
On closing day all parties must be present at the Notario to verify and sign the deed. You will receive a copy of the deed along with the keys to your new home at closing.
Your authenticated deed will be available for pick up at the Notario approximately 2 months after the the property was duly registered at the municipality, along with an official tax receipt called a factura complimento. This important document allows you to claim a capital gains exemption when you decide to sell.
Final Words And Future Outlook
Real estate transactions are becoming increasingly complex in Mexico compared to what they used to be. This is good news to purchasers, as it provides buyer protections and security of your investment.
Real estate agent licensing (currently realtors are not licensed) is also coming soon and working with a licensed and qualified agent is more important than ever before. Just as important (and possibly even more so) is dealing with an established and large brokerage company like Chapala Realtors who (along with our company lawyer) make sure that all the documents are to legal standards.
Our team at Retire In Lake Chapala are always available to help you in making important decisions and guide you to a successful landing to Lake Chapala. We offer free and unlimited email/phone support so Contact Us! We make moving to Lake Chapala easy!
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Michaela & Ricardo are your FULL SERVICE Real Estate Agents. With over 25 years of combined experience Lakeside, and our network of area Professionals, we help guide you to from beginning to forever in your Retirement Journey to Lake Chapala, Mexico.
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