Retire in Mexico: Buying Real Estate Tips in Puerto Vallarta and other coastal Mexican Cities

hey what's up everyone today we're going to learn what you need to know in order to buy a home in Mexico I'm Risa Morimoto your host and you watching modern aging well we chat about innovative and holistic ways to care for one another as we age by clicking on the subscribe button and a little bell you'll be sure to be notified whenever new episodes are uploaded and of course you could always sign up onto our email list at this is modern aging calm today I'm going to continue my conversation with my friend Daniel champion if you haven't seen our videos on why you might want to hang your hat and partner by artha or the one about facing your fears and what is holding you back from moving abroad you're definitely going to want to check out those videos Daniel is a super successful real estate broker import the buyout of Mexico he's going to guide us through the process of all the things that you'll need to know and do if you want to buy that incredible retirement spot in Mexico so check it out so today we're gonna talk about buying a house in Mexico I hear you kind of know a little bit about that yeah I pretend on TV that I do well you seem very convincing on TVs I figured I would ask you in person yeah so you've been a realtor for how long I've been in real estate for 13 years but yeah so I think that a lot of people think about dreaming about it buying a home abroad right and I know Mexico is very specific you know other rules apply for other countries yeah but just as a practical step-by-step or a practical guide things that people should be thinking about if they are thinking about purchasing a home in Mexico what are some of the recommendations what are some of the things that you suggest that people should definitely know beforehand okay well in Puerto Vallarta there are a lot of brokerages that are owned by Americans and Canadians and we've kind of elevated the standard of the business so if you're if you're a foreigner from the States or Canada per se you'll probably see some similarities and a purchase sale agreements one of the big differences is that for a foreigner to acquire property along the coastline which is called the restricted zone an article 27 of the 1917 Mexican Constitution it prohibits foreigners owning properties in the restricted zone the restricted zone is 62 miles from the US and Central American border and 31 miles from the coastline Pacific and on the Atlantic side so in these regions the title has to be held than a real estate trust which they established in 1973 the Mexican government figured that they're missing out on some foreign investment opportunities so they established a real-estate trust with a Mexican bank and the trust has a term of 50 years which you could renew where the buyers let's say such as yourself would be the primary beneficiaries of the trust and then you could have your substitute beneficiaries so let's say if you have kids or other other family members or friends you want to add as a substitute so they're gonna inherit the property in a sense as of now there is no inheritance tax in Mexico which is great so for the real estate trust where let's say you and your spouse will become the primary beneficiaries should one pass away the survivor becomes a hundred percent when that person is gone then the substitutes become the primary beneficiaries so there's a fee for the notary to to do the transaction with the bank and then there's no probate to go through which is nice so usually within depending on your trust bank maybe within sixty to ninety days you're substitutes become the primaries and they kind of own the the property so the trust is is that similar to a trust in the u.s. yeah and the u.s. you have a living trust where you can put all your properties and and personal effects in there so it's some what's it kind of works in the similar sense but what's nice is that nobody can come out of the woodwork and say well I'm also who know her her son or daughter and then you have a probate a lawsuit pretty much over you have in there as your substitutes they're gonna get the property and you can designate 20% to this person 10% to this person and 70% to that person you could change the percentages later you can add people remove people so it's very flexible which is great so the so the substitutes when the time comes they just have to provide a notarized and and and apostille death certificate and then the notary in Mexico will start working with your trust bank to recognize them as the new sub primary beneficiaries of the property okay I'm not dead yet so I want the property you'll be around for a while could you not kill me so so if we were to go back so I find a property for you ample right do I have to pay cash 100% can I get it financed - I know yeah she wants attention the majority of the transactions at least in our market here are cash I would say good 85 to 90% of our clients of purchased cash loans are available in Mexico the interest rates are higher than what we're accustomed to in the states and they're also closing costs on the loan itself so and it's gonna be a peso launder but as of right now there aren't any US dollar loans through the Mexican financial institutions for the purchasing of the property and and Mexico so we pay so long on the exchange rate at the time of the closing okay and that's about it but most of our foreign buyers here they either have the cash or they kind of tap into a line of credit back at home take out a like an equity line on their house and they move the money down here and purchase the property yes so how much should people allocate for closing costs for a crash transaction you're looking anywhere with the all your closing costs aren't pesos so when you convert your dollars into pesos that's where you're saving some money there so when the dollar is really strong against the peso right now I think the exchange rate is like 19 to 1 so if let's say for a $300,000 purchase you're looking around anywhere from three and a half four four four and a half percent closing costs two of the items in your closing costs you will get back in the form of a credit against capital gains when you sell in the future the transfer tax that you pay which is which I think it's like we are on to to 2.8 percent of the fiscal value and also the notary fees so when you get your itemized closing cost estimate everything is laid out it's all itemized right and you have all your set fees most of them are your set fees and a few of them are percentage of the transaction okay so the transfer tax they call it patrimony tax it's around two to two to put to 2.8 percent of the of the fiscal value now that is deductible when you sell in the future you can get that in the form of a credit as well as a notaries fee so if the notary there legal fees let's say is is thirty thousand pesos which is around like $1,600 right now you'll get that in a form of a credit so in the long run when you sell your property in the future your buyers closing costs has really gone down so if you're if you're spending three and a half to four and half percent closing costs by our closing cost right now in the long run that's gonna be less because you're gonna get some of those itemized costs credited towards capital gains in the future oh wow I didn't know that but you need to get the the invoice the legal invoice from the notary and then once your deed after closing is registered to the public registry which could take anywhere from between two and five months for you to get registered after your close so you can solve it oh absolutely yes so when we close you get like a quick copy of your deed the actual original deed will be sent to the public registry for it to get registered and that takes a few months once it comes out of registry that registered deed your copy will be sent to the notary now the notary is supposed to notify you or your closing attorney but they get busy and sometimes they forget so it's good to put like a little reminder on your calendar to contact your your closing attorney let's see in about three or four months I say hey you know can you check if my deed has been registered and then they'll check with your notary and then if it is registered you could pick it up or you can designate somebody else to pick it up on your behalf and you could just throw that in to safe you don't need it until until until you sell then you hand that over to the notary and when you sell the property in the future yeah I think there's a lot of fear all right buying not only buying in a city that you don't know but it's also in a country that you don't know and people you don't know you know using an agent you don't know and that sort of thing yes are there anything that you kind of are there any tips that you advise people to kind of be aware of like you know people may not even know that they're heading into a scam right mhm I don't know if you run into that kind of situation yeah you know there are scams everywhere for everything just yesterday I got a text message you know from somewhat a total stranger this happened yesterday was bizarre and said oh I found your information on realtor.com website I'm interested in purchasing a property in your country well if you got my information and infecting me you know where I live or where I work and it was just kind of odd and it's too bad it was too vague so it's like you know oh I've got 25 million dollars I'm you know from the island of brunei or something you know [Music] [Laughter] actually the money isn't the beauty that's Ryan Gaul probably so you know just be really cautious of scams in and anywhere right but what I recommend is find an MP a MP either acronym realtor it's it's it's like the National Association of Realtors and in the States so that's associate Association of Realtors in Mexico find an anti agent and I would with them because they have to buy by certain code of ethics and rules and they go through training throughout the year oh I'm so that's very important right as a right now you don't have to be licensed in Mexico I think some states are pushing towards that I think at some point in the near future that will be a requirement but as a right now you don't so you know you in your cab driver can try to sell your real estate so we're really cautious who you're working with make sure they're an ampy agent and maybe you know interview some of their past clients you know I've also seen people asking questions on social media on different blogs you know I'm thinking of purchasing a birth of a artha is anybody you recommend it'll be a whole bunch of lists I mean maybe make a few phone calls and entity a few agents I just ran across a friend of mine who's she and the first agent that she worked with I didn't also send the money deposit to our account well now we use escrows here as well in beata so sending the money directly to the realtor that should be a red flag right then and there you know I thank God she didn't do it but she's a real estate agent back in the States and she's just kind of thought that was kind of fishy so in our purchase sale agreement somebody might not know that I know that no they kind of they just assumed okay that's the way it is and not doing their due diligence and research and and kind of investigating it to find out that that's not how things are done here and that should be a red flag right off the bat you know a lot of the developments pre-construction the money is going to the developer okay because it's a cash transaction and and and they're receiving payments and installments when the foundation is done or at a certain you know time frame you know a certain month of such a such date but if you're doing if you're gonna purchase pre-construction or resale and get an attorney have them review the documents to make sure it's it's a legitimate corporation like the developer okay they've got the money or they have access to the money like they're getting a loan you know as always all the construction money coming from sales so those are things to to to look into and make sure that you're totally comfortable and you make a wise decision moving forward and not just trust anybody just out on the whim and just wire money over so you also do need to hire an attorney it's advisable and we work with a lot of tourney's in my office there are a lot of great law firms and attorneys and they're all fully bilingual so you're not gonna feel like how am I gonna communicate with them right and and they work with a lot of the big notaries in town so that's really important and a notary and I don't know if you know this but a notary in Mexico is not like a notary back in the states where just anybody can be noted into stays next to a gas station you go somewhere they stamp it it's notarized right in Mexico a notary is appointed by the governor of that state so they need their an attorney as a law firm that at least 35 years of age and as worked for notary's office for a minimum of three years oh wow so they kind of had like the authority of a federal judge so whenever you're transferring title it's always done at the notary's office so they they're the ones that do the title search generating all the local state and federal documentation that's required for transactions whether it's real estate or business or civil and so when you get something notarized in Mexico it's a big deal it's not like a simple little stamp next door they're also obligated to keep records of everything and the original documents of everything so it's it's a very there there's probably the biggest piece of a real estate transaction and what we do in Viera is we have closing attorneys that work outside of the notary's office or independent third party law firms and they work with a notary they gathered information all the documentation they help the notary basically and so when they're ready to close you go to the closing and you sign yeah Wow yeah so there's mainly there's no coops here or other it's mainly condos yes doing any co-ops not right now it hasn't been so I mean we have you know timeshare fractional ownership but what I deal with in my office it's mostly full ownership condos or houses right we also sell land and business opportunities and commercial as well is there a big difference between buying a condo and versus buying you know a house a house yeah and what a property taxes like here I'm glad you're sitting so you don't keel over property taxes here it's it's a non-issue so it's around a hundred hundred twenty-five dollars for every hundred thousand fiscal value so for I know for example Mike Mike my property tax for my condo my con is around 2700 square feet my annual property taxes 100th one hundred thirty-five dollars for the year I know what the did you say for half a million dollar property you're looking at around five hundred five hundred fifty dollars a year and property tax now if you pay for the whole you could pay it every two months I think you do that in the States but if you pay for the whole years property tax by the end of February there's a 15% discount oh and then you get a discount discount extra Marty yeah yeah so it's very affordable and then for condominium buildings you have your monthly HOA dues right and all utility bills you know electricity internet water gas some older HOA some older buildings or even some newer buildings this day still might include the water and the gas and the HOA or might be separately metered but water and gas here is it's it's nothing I'm it's 15 20 dollars a month you know so that same is similar same as Silla and then and then the electricity is you know if you leave the AC running on lights on all the time it's the same thing of the states I mean so you have to be smart about conserving and turning things off when you leave or just turn on the AC in your bedroom you know Wow that's it and then in terms of like renting out a condo and so I'm assuming that's kind of big business here yeah I'm the majority of our clients investing in VR didn't get only if you're full-time I would say a good 65 70 percent of them rent out their unit and then the other people they just kind of lock it up you know didn't want somebody else sleeping in their bed or they don't need to generate that rental income to pay for their caring costs whereas other people they do need that income to subsidize the carrying cost of the HOA you know all the utilities and made and everything else so it kind of depends on where you're at right now if you need to rent it out or you don't right right that's awesome any other suggestions or anything else that you feel like people should really know before making a purchase down here well the purchase sale agreement is pretty standard so just like in the state's you know people once the offers agreed upon by both parties with tempers set into escrow the balance 90% gets wired into escrow maybe about four days to a week prior to closing and then typically the buyers closing cost you send a deposit directly to the notary or the closing attorney okay so they can start the closing process and then the balance of the closing costs typically you just wired into s4 along with the ninety percent and then you have how long does that process take so if the seller is a foreigner that has a real estate real estate trust and the buyer is a foreigner who's been in any real estate trust if everybody submit their paperwork and time and and puts down the deposit you're looking anywhere from 45 to 60 days to close okay some trust banks are faster than others and and some aren't so and if the seller has a mortgage on on the property then that kind of adds more to the timeline so you have to but let's say it's a cash transaction foreigner to foreigner you're looking at around 45 to 60 days to close now if the seller is a mexic national and the bar is a foreigner you can sometimes close sooner so you could think it'd be maybe 30 to 45 days yeah because you're not dealing with the seller the seller doesn't have a trust bank yeah the title too right you know yeah so then you have contingencies in the purchase sale agreement they do a home inspection if it's a condominium association you can review the financials or rules and regulations the condo regime the bylaws the entering and photographic inventory which is which I strongly suggest doing a photographic Yemen tour when he says oh everything is included that's not good enough you don't remember what the artwork looks like you know with what kind of chairs that it have and they could swap things out or things can break or it's all of a sudden missing what I suggest is doing a photographic inventory so the listing agents should do that an itemized photographing inventory the seller signs off on it the buyer signs off on it so there's no doubt what's staying in the unit so you don't have any problems down the road right right yeah that's really important as well right and you have inspectors I guess that is that's what the notary does or wouldn't know we have home inspectors usually the the buyer's agent should know probably has a list of home inspectors they have worked with and they'll check with one of them to see if they're available and what they charge a home inspection depending on the size of the unit how many square feet it is it could be anywhere from 200 to 700 dollars you know if it took like a 10 bedroom villa it's gonna cost more versus like a two-bedroom you'd love a hundred square foot condo right right right another interesting thing which is different than and the states is that if the owner has a an employee let's say a mate that they're paying directly they need to liquidate that employee at the labor board because the employee is tied to the property so let's say you have a maid that you're paying you've had this made for three years for example she comes once a week so you hire an accountant or you're an attorney okay to go to the labor board and do the calculation how many years they've worked for for you what's their current salary okay and then they'll do the liquidation okay so all the benefits have accumulated dollar figures peso figures basically okay and then you need to pay off basically their severance in a sense yeah but it has to be done at the labor board that's a very important because then the maid will go to the labor board and your accountant or your property manager or attorney will meet them there they give the money to the labor board employee they count it they gave it to the maid she signs a letter it gets stamped it gets processed so that made it's really to protect the buyer so one that when we close at the closing the buyer will receive that labor letter that she the maids been paid so if that employee comes knocking on the door one day and says you you still owe me money well I don't know your money I didn't hire you you know but remember the maid is tied through the property now if the employee is hired their property management company then then people you haven't had that problem so the property management company will sign a letter saying that the maid works for us not for the owner and we pay them so it's a different scenario there Wow it's called it's called a finicky tow fee Nikita Nikita almost like finito but in a cute way very cute well you have this buying guide yes is available online yes so we have the this buyer's guide people can email me I could send it to them it's Daniel at Timothy real estate group calm and it kind of covers the basics of from our company who we are frequently asked questions the purchasing process you know what to look forward to in a purchase sale agreement the closing costs you know closing costs for buyers closing costs for sellers and you know what the buyer is paying and their closing costs and what the seller is paying so everything is very clear so there's total transparency and that kind of that kind of helps you have a better understanding of what you're getting yourself into and and this kind of might help you all know what that kind of brings up a point you might have some questions that come come to my that you didn't think of before right it's very helpful yeah and it's free that's awesome yeah and what's your website my website is Daniel jeomsun comm ta n IE l CH BM s i am calm awesome so if they have any questions they could just email you could email me sure just visit my website and i'll answer their questions truthfully truthfully yes or else you'll hunt me down we'd love to hear your thoughts so feel free to leave a note in the comment section below if you found the video helpful or you know someone who loves Mexico and is interested in purchasing there send them the video be sure to subscribe so you'll always know when new episodes are uploaded you can always DM me on Instagram or Facebook at this is modern aging but of course the best way to keep in the loop about our latest episodes and other upcoming programs is to sign up on our email list at this is modern aging calm to live your best life tomorrow you need to start today so thank you so much for watching ll see you next time I'm modernity [Music]

Channel: Modern Aging - Holistic Health & Wellness After 50

Views: 226,820

Keywords: Move abroad, Live abroad, Start over, Start a new life, Overcome your fears, Retire, Retirement, Buy a home in mexico, How to buy a house in mexico from usa, How to buy a house in mexico, Home purchase process, Buy real estate in mexico, Buying a house in Puerto Vallarta

Id: L2dgB3Gms0A

Length: 25min 1sec (1501 seconds)

Published: Thu Nov 14 2019