So, if it is me, Luis Martínez or someone else, please be sure they are with the association, AMPI, (Mexican Association of Professional Realtors) as they know the paper work is done on the property and they can help you over the hurdles of becoming a home owner, also you can relax, you know it is done right.

2) When a property is found, whatever area it is in, there are offers, counter and counter offers, as in the United States. I might mention at this point that the Pacific Coast, borders and Gulf Coasts are considered FORBIDDEN ZONES. These areas can not be purchased and owned by foreigners. This was done to protect the coasts. So you have 50 kilómeters by the oceans to inland and 100k. from borders to inland. Therefore there is what is called a BANK TRUST for 50 years given to the purchaser to acquire property in this “Forbiden Stripe”. This I will explain later on.

3) So, onward!!!! When you find a piece of property you make an offer. Along with a check of 1,000.00 US.dlls for proof of intent. This check usually goes back to the purchaser after it is copied. Once that offer is accepted, there is a normal 10% of the purchase price given in the name of the seller. This check, cashiers, will not be touched by the sellers until the whole process is through. This check can and will be used as credit to the purchase price. Check could be deposited in an ESCROW
ACCOUNT, which will cost you around $500 us dls. and lots of paper work, or it could be just deposited with the Notario Público and held till the closing date.

4) The whole process takes about 45 days to complete. This will involve the NOTARIO PUBLICO. This man is a lawyer but has another title of NOTARIO PUBLICO. He has taken another and higher degree of law. That of properties. He is not only a lawyer, he is a tax collector for the Government and also is responsible for all the transactions that take place with you and the seller also he is an impartial party (JUDGE) in the transaction. He is choosen by the Governor of the State of which you are buying the property. Jalisco is our State and in Vallarta there are only 5 Notario Publico. So you can see they HAVE to do things right. They are considered a very honorable ‘big wig’ and an impartial judge for both parties in all things.

5) When you choose a Notario, and I choose one who speaks English, has been partly schooled in the US and is such a wonderful person to do business with, he will give you a print out of a price you will have to pay in order for you to close your property dealing and the property is in your name. This will include taxes, bank trust, stamps, his service, and everything else that would go along with the closing of such an important transaction. Each figure is broken down for what you are paying for. It is not only in pesos but dollars so you know what your doing and how you are paying and for what. He is responsible for everything involving your property from now on until you decide to sell. He is also responsible for all mistakes, if any. So, rest assured that that is a very important person in your buying lives. His fees, including that which I mentioned above, is around 6% of the accepted offer. Half of that is expected up front in order to start the paper work. The day of the closing, the price may differ for or against the buyer, because of the change of peso that day. So it could be somewhere in the 300 us dollar one way or the other. Usually it is not as much as the 6% but I like the buyer to be prepared just in case.

6) So, after the offer, and then the print out, there is nothing for the buyer to do. I might mention at this time that copies of proof of citizenship, drivers license, birth certificates, beneficiaries and their information, also yours and their type of work, must be given to the Notario to get the paper work done. This is required by the government. The seller of the property is responsible for the 8% plus tax commissions to the realtors. That being his part in all of this. I might point out at this time that the seller needs to come up with his own tax deductions. There are always new rules to the norm on this one. Each year the government comes up with a little something new. So, it is very necessary for you to apply for that status after you purchase a home, or property. I might add here that the rules have relaxed quite a bit. You only need 6 months of an FM2 or 3 in order to avoid any taxes of capital gains. You would be notified by your realtor when you go to sell what the new rules are for that year. That is it. Nothing else. However, as I said, new rules apply every year, but they are getting easier and easier.

7) Next you gather the other 90% or whatever you have to do to make the 100% and come for the date designated for the closing. Now, some people think that there is fianancing here in Vallarta. There is, with a high interest rate. The banks in Mexico do not, at this writing, have any departments that would or could take care of loans. They do not have any interest in doing so, from what I have heard. If one needs or wants to have fianancing, they are encouraged to do it where they live. Cash is how we all started out here and we all want cash to go back to the States with. It is just better for the seller and buyer. You know the old addage...keep Church and State seperated...Mex./ US is the same.

8) Some people can not come down to close. And to close is when at the end of the 45 days or thereabouts, both partys and their representatives (your realtor) and the Notaria meet at his office around a table. Then all the monies are exchanged, papers are signed and bank papers are issued....this is when you get the keys. Everything is done including the other half of the price of the Notarias work. So, when it is not conviente to come, you may designate your spouce or someone you want to sign a POWER OF ATTORNEY. Only a Mexican, other than the Spouce, can be this one time signer. That is only for a one time. I did repeat myself as many people think this is something that would give them power to do other things. No. Just the one time. I usually ask Luis to be the POA for my clients. I trust him, he is always on time, and since we both use the same attorney, it just makes it easier.

9) At the close of the 45 days, or when you choose to close, that is when all monies are transferred. The final 90%, the rest of the Notario fees and the commissions. These monies can be wired transferred so there is no handling, and checks, preferable cashiers checks, will be good. A personal check for the Notaria is or can be used, in his name, that is, if one wishes to do so. The seller is the one who is responsible for the commissions, as I said above, however, he may wish it to come out of the proceeds of his monies given by the buyer. That is done at this time also. So, keys are handed over and bank trusts are signed and all is in order….

10) The Notario is the one who is responsible for all the paper work, as I said, and to make sure there is no liens, or anthing wrong with the trust (Fedicomiso) .

11) Let me tell you about the BANK TRUST. When you buy a piece of property, you, being a foreigner, need to apply for a Bank Trust. This is a permit along with the bank, from the government of Mexico. They have to have you registered. So the bank does this. Your Bank Trust last, at this writting, 50 years, at the end of 50 years, the bank renews your trust for another 50 years, and so on. Until the government does away with bank trusts. This is something that has been talked about for a few years and I guess that it may happen one day...who knows.

12) When you have this trust or Fedicomiso you are given the rights to live, remodel, will, sell or whatever you want to do with it, as tho it were your absolute own. I have had my trust for over the 25 years and feel very safe with it. Actually safer than if I had bought it without it. It is a sure guarentee that the property is yours. Of course, there is a responsibility to having it. Aprox. 450.00US a year is what you pay for having this trust. Now, I look at this as being a deal. First, I am protected in a foreign Country, second, no one can take it away from me. I pay for my home, as I told you, about 150.00 US a year for taxes. Along with the 450.00 or so US for my bank trust....I think about 600.00 is pretty good instead of having big taxes like there is in North America.

This is the beginning of your life here in Vallarta…Then comes the fun! Doing whatever you want for your community. I must warn you, you can become ‘deluged’ in community affairs…it is up to you to how much you would like or could be involved in. Most of it is fun…..

Good Luck
Dottie Thompson
Sales Director