How the whole thing works

May 13, 2007

The view from the kitchen window.

We got back to the US last night from our amazing trip to Mazatlan.

The wood floors in our home here were refinished while we were gone, and they look wonderful. I just took a walk around the property, and everything is growing like crazy and looks wonderful. The floor people protected all the shelving and cabinets, but I will need to vacuum most of the floorboards and walls before we get started putting the furniture back in place. We can go get the dogs and birds later this morning – then we’ll feel like we are really home.

I thought I’d do a quick rundown of how our home purchase in Mexico went. We bought the house from another ex-pat so a few things would be different if you bought from a Mexican.

First, because Mazatlan is on the coast, foreigners who purchase must have a fideicomiso. The man we bought from had a fideicomiso in place so we are able to assume it. The bank that handled the fideicomiso for him is Bancomer, so we had to take a letter from the seller telling them that he authorizes them to transfer the trust to us. We had to pay an assumption fee and the first year’s fee. Then every year we pay them $350 to manage the trust. It was originally for 50 years, but since it has been in place for 4 years we just take over the balance. The fideicomiso is renewable after the 50 years.

The Promise to Buy/Sell is a little different than a Purchase and Sale document in the US. In the US, once the terms are agreed on and signed, the document goes to an escrow agent to open escrow and they handle executing it as written.

In Mexico, the Promise is really just between the parties. The Notario handles verifying that the deed is clear and transferring the deed, as well as checking on the status of the real estate taxes. They handle getting an appraisal and preparing all the documents which are signed at closing.

The notario in our case is holding our deposit that will be given to the seller at closing. We took our personal check to the casa de cambio in Mazatlan and he converted it to pesos. The check in pesos is made out to the seller. We had to register at the casa de cambio – which will be helpful whenever we need to move money from the US to Mexico at very good rates.

When closing comes, the seller will tell us where he wants the balance paid. We will wire money to the casa de cambio and they will disburse it to the seller – who also has an account there.

In our case, we are allowing the seller to remain in the house for 120 days after closing, so there will be a holdback of a portion of the balance that will be paid after he leaves and provides proof that the utilities are paid in full. We’ve made arrangements with someone in Mazatlan to go to the house, get his set of keys and verify his utilities are paid and then hand over the holdback check if everything is ok. In the US it would be done by signed paperwork going to the escrow agent and they would disburse the funds.

In talking to people we also learned that when you are buying a house from a Mexican, their pricing and negotiating style is quite different. We’re told they ALWAYS price their houses higher than the expected sales price and would expect you to come in with a low offer. We were told that if you offered full price they would raise the price since they would think they had underpriced it. Just what we were told – we don’t know that from our experience.

We heard a lot of stories from people who purchased their homes from Mexicans. Often the homes were owned by a whole group of people – three or four siblings, etc… this made for very complicated negotiations and the final balance payments often went to a dozen different accounts. The whole process is challenging enough – we were glad we were only dealing with one person!

One thing we noticed is that all our appointments, meetings, and required document signings, etc., all went so well! We had expected to sit around for ages here and there but everything went at a fast pace. Everyone was very businesslike and efficient, and did their best to fully explain everything.

The last few days we were in Mazatlan, Paul and I got up early for a walk along the malecon, then around past our new home – just to see it again and again. One morning we walked past, and ran into the seller out in front talking to our next door neighbor. The neighbors are in the process of replacing their sidewalk, and we had a nice talk. The house we bought and the one our neighbors have were at one time all one house, and the family that owned it split it up and some owned the corner and some owned ours. There is also a small medical building on the other side that some of the same family still use for their medical practice.

I have finally finished my first cup of coffee and it is probably time to get going on getting the house in order….and of course, laundry!

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More about Nancy

I'm Nancy, a US expat living in San Antonio Tlayacapan, Jalisco after 11 years in Mazatlán, México.

    1. Congratulations, glad everything went so well for you.
      Beautiful view out of the kitchen window.

    1. Felicidades, that really is a helpful and informative post to have written.

    1. Congratulations! Just checking in to see what you are up to–wow! You two are really moving along–pun intended. I’ll keep reading to see what else is happening,
      Lise and Ken

    1. Wow! I too think it was meant to be your house… and what a house! It’s beautiful, I love the tile and the ceder and that gorgeous great room. Congratulations! These are exciting times.

    1. The two times we put offers on places for a token few thousand dollars less than the asking price, the seller came back with, “um, no…that’s not the asking price.”

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