Purchasing real estate in Mexico is far more than just knowing about public notaries and bank trusts. It’s a whole world in of itself, big enough for a whole book, but why bog you down with walls of text when I can give you the reader’s digest version instead? Four key, bullet-point differences to be exact. So let’s get to it!
The Difference between Mexican and North American Licensing for Real Estate Agents and Brokers
Contrary to the US, Mexico has no official or specific government regulation when it comes to the real estate business, nor does it have the need of a licensing requirement (as of time of writing anyway). Becoming a broker or real estate agent in the US takes a long time and plenty of experience, here in Mexico however, it’s a mixed bag with people packed to the brim with qualifications, credentials and experience, and others who, to put it mildly, don’t.
But that’s not to say it’s a bad thing, there is, as mentioned below, a special system in Mexico known as Multi-Listing, which, in tandem with AMPI (The Mexican Association for Real Estate Professionals), helps provide professional aid to its clients, through stricter requirements for its members: minimum education requirements, background checkups and the like.
In short, not everyone makes the cut, only the best of the best.
The Difference between Mexican Realtor Associations and Listings and their North American Counterparts
Mexican realtor associations, while not carbon copies in name, function in much the same way as their American counterparts, and I’m going to show you how.
First off, when it comes to listings both US and Mexico sellers sign an Exclusive Listing Agreement, which is an agreement that obligates them both to pay the agreed commission to the listing broker, regardless of who sells the property.
As for the Multiple Listing Service practices of the US, they translate rather well here in Mexico, being forms filled by agents during the listing of a property. These filled forms are then entered into an online database, which from then onward are fully accessible to the other members of the AMPI/service, as well as anyone interested in the property (such as buyers/general public, for example).
Lastly, when it comes to the showing of a property, Mexican agencies, such as AMPI, don’t handle key-safes. So instead of having a special end-all be-all key for any kind of property, an agent in Mexico must first find a seller, get the keys, and then show the property to the buyer/client.
The Differences between Mexico and North America when it comes to Selling, Buying, and Closing a Real Estate Property Deal
Selling and buying-wise in US and Mexico are pretty much the same. When you’re selling you use the listing system, you get the keys, and you use signs to promote the property, only difference being that, as I’ve mentioned before, there are no key safes and you must come to an agreement with the seller in order to get the keys. When it comes to buying, the only real difference comes from the transactions, which are mostly done through cash or developer financing, that way the payment doesn’t go straight to the seller but is instead transferred over to a bonded, US Escrow account (or a title company).
Now for the “tricky” part: closing the deal. Anything real-estate transaction related must be finalized in the presence of a notario, without exceptions. As you already know, notarios are representatives of the Mexican Government, and as such, they will verify that every aspect of the transaction adheres to Mexican law. Otherwise, you might just kiss your deal goodbye.
As for closing costs, they range anywhere from 4% to 7% and while buyer and seller(s) must meet the notario during the signing process, the transfer does not require the notario itself. The Escrow Company instead pays it out, once the notario approves of the document signing process.
Differences between Mexico and North America when Recording Real Estate Transactions
Though not county offices, Mexico does have an equivalent: the Public Registry Office. This public service registers all transactions that occur within the municipality (and are authorized by the notario). As of note (and as a little tip), you should avoid Master Trusts if implemented, since that does not grant you, as a buyer legal, remedy should the seller default at any time. You should instead wait to buy it off through the right means until the bank trusts and insurance are available. Really, trust me on that one.
So there you have it. Not so daunting once you put it into perspective isn’t it? You just need to follow the rules, and stay sharp. That way your business trip to Mexico will be a fruitful one, and not a complete mess.